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New test for an old idea: actually making things

Factories of the future, and jobs to go with them, take shape in upstate New York, home to an unusual public-private partnership

May 15, 2011|Don Lee

ALBANY, N.Y. — If there's hope for 51-year-old Brett Miller, then you could say there's hope for the American dream.

When Miller was a boy, upstate New York and the Hudson River Valley embodied the industrial might of the nation and the broad-based prosperity that made middle-class families such as Miller's the envy of the world.

For 40 years, his father earned a good living from the sprawling General Electric Co. complex in Schenectady that built steam turbines for the nation's electric power companies and nuclear engines for its submarines. When he retired, he had a comfortable pension.

No such dependable future awaited the younger Miller. A wave of corporate downsizing in 2009 abruptly ended his career in marketing, and he's been unemployed ever since.

For The Record
Los Angeles Times Thursday, May 19, 2011 Home Edition Main News Part A Page 4 News Desk 1 inches; 33 words Type of Material: Correction
Manufacturing revival: A May 15 article in Section A about the need for new manufacturing in the U.S. to boost the economy misspelled the name of the movie "Forrest Gump" as "Forest Gump."
For The Record
Los Angeles Times Sunday, May 22, 2011 Home Edition Main News Part A Page 4 News Desk 1 inches; 33 words Type of Material: Correction
Manufacturing revival: A May 15 article in Section A about the need for new manufacturing in the U.S. to boost the economy misspelled the name of the movie "Forrest Gump" as "Forest Gump."

"I'm starting over," Miller said.

What gives Miller hope -- and what could point the way for economic revitalization elsewhere in the United States -- is an effort here to test an idea that many gave up on years ago: making things.

For several decades, prominent economists and business leaders argued that so long as Americans came up with the ideas for great new products, it didn't matter where the products were manufactured.

Today there is a growing sense that the nation's lack of production capability is an Achilles' heel. In this view, the country must regenerate its manufacturing base -- not necessarily producing the same things it made in bygone years, but churning out high-value goods that can compete on price and quality in today's global marketplace.

Already, manufacturing has played an unexpectedly strong role in a recovery from the recession. Signs of renewal can be seen in many parts of the country.

In Detroit and Cleveland, the long-moribund auto industry is showing surprising strength. In Boston and Chicago, metal fabrication shops are busy again. And in the Bay Area and Austin, Texas, high-tech manufacturing is on the upswing.

The effort in the Hudson Valley represents something new: an unusual partnership between government and private enterprise. And because it is no mere government bailout of a flagging industry and focuses on high-tech, future-oriented products, this initiative has potentially greater staying power.

If it succeeds, what's happening in upstate New York could help the whole country meet one of its most difficult challenges: re-creating the kinds of secure, long-term middle-class jobs that have long been the foundation of American prosperity.

Unless such a revitalization takes place, most economists agree, millions of people will face a more volatile and less prosperous future. And as consumers' ability to spend erodes, so will the prospects for corporate America.

It also will be extremely difficult for the country to deal with government deficits and the soaring cost of such fundamental programs as Social Security and Medicare.

The origins of the problem are well-known: The decline of once-mighty industries, the offshoring of production and jobs, stagnating incomes and other long-term trends -- many of them aggravated by the Great Recession -- have hollowed out the middle class and left many Americans vulnerable today and anxious about tomorrow.

It used to be that almost anyone willing to work hard could get ahead. Now, that doesn't seem so certain.

"The social contract was ripped in pieces, rendered ineffective by unforeseen forces such as globalization," said former Michigan Gov. Jennifer Granholm, who teaches at UC Berkeley's law and public policy schools.

"It needs to be rewritten for the 21st century."

The catalyst for change in Albany is an unlikely physics-professor-turned-empire-builder named Alain Kaloyeros, who heads the College of Nanoscale Science and Engineering at the University at Albany.

Kaloyeros, 55, is not your ordinary public servant. He drives a black Ferrari F430 Spider, quotes "Forest Gump" and wears bleached jeans with holes in them. Yet the state pays him a salary four times the size of the governor's because Kaloyeros has done more than build his obscure college into a powerhouse for research with applications for electronics, medicine and other industries.

He has also made the school, part of the State University of New York, a magnet for forward-looking industries in across the region.

About 250 companies, including such major high-tech firms as IBM Corp., Samsung Electronics Co. and Applied Materials Inc., have provided $6 billion to the school for equipment, labs, clean rooms and other resources.

Kaloyeros has persuaded New York state to kick in nearly $1 billion more.

At the same time, the promise of what the research center can contribute to developing fresh products and technologies is attracting new manufacturing plants. Next year, Silicon Valley chip maker Advanced Micro Devices Inc. will open a $4.6-billion semiconductor factory in Luther Forest, about 20 miles north of Albany.

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