Is GE-led consortium money well spent?
I don’t necessarily have a problem with the state investing $135 million to help create a $500 million power electronics consortium that will be led by General Electric.
Government-funded research and development is nothing new, and sometimes pays off in big ways.
The Internet got its start as a military research program, the first general-purpose computer was built by university researchers contracted by the Army, and Google founders Sergey Brin and Larry Page received early support from the National Science Foundation.
I know I have the benefit of hindsight, but these seem like worthwhile projects with a pretty good return on investment.
Which makes me wonder: Will we one day be able to say the same of the power electronics consortium? Are we at the forefront of the “next big investment” and “an exciting next wave,” as GE CEO Jeff Immelt proclaimed at a press conference last week? Will the consortium create jobs, spur upstate manufacturing growth and elevate the Capital Region to national prominence as a hub of innovation and discovery?
Well, I cannot answer any of those questions, and I’m not sure anybody can.
But I do know this: When I moved to the area, I had never heard the term nanotechnology before. The Tech Valley concept was just getting off the ground, and my friends, acquaintances and colleagues simply did not believe the Capital Region would ever be worthy of such a moniker. Most of the people I spoke with believed the whole thing was a mirage, unlikely to yield tangible adults.
But it has.
I know a number of people who work at the College of Nanoscale Science and Engineering in Albany, where the power electronics consortium will be based, as well as GlobalFoundries in Malta. The college is now a massive complex, and the announcement of the power electronics consortium ensures it will continue to grow.
That said, it’s easy to be cynical about the whole enterprise. Or, at the very least, raise questions.
For instance, must the state invest so much in a project led by General Electric, one of the most successful companies in the history of the world? Private companies will chip in $365 million, with GE contributing over $100 million — not a small amount by any means. But these companies, which include IBM and Lockheed Martin, aren’t exactly struggling startups, either. In other words, we’re a long way from Brin and Page receiving federal funds while studying together at Stanford University.
At the press conference, Immelt suggested the consortium, which will develop silicon carbide technology that can make electronic devices faster and more efficient, will benefit businesses that lack the resources of General Electric.
“This not only helps GE, but it helps hundreds of small and medium businesses that want to innovate here because it gives them a manufacturing location where they can test their innovations,” he said.
Perhaps he’s right. I hope he is.
When the consortium was announced, Gov. Andrew Cuomo, Assembly Speaker Sheldon Silver and state Senate Majority Leader Dean Skelos all made jokes about how little they understand about the technology in which they’re investing. Personally, I think they understand a little more than they let on.
But $135 million is a lot of money, and it’s being spent at a time when the effects of the recession and the long recovery are still being felt. People are right to wonder whether this is the best way to spend public funds.
The consortium is the very definition of a public-private partnership. Which means we — New York residents and taxpayers — should be considered co-investors. And as co-investor, I’d like to see a high rate of return.
Otherwise, it’s not an investment worth making.