IBM”™s decision to invest about $1 billion into its East Fishkill facility in Dutchess County is an immediate boost to the county and region, say economic officials and scholars. But its greatest impact may be the beneficial effects the investment brings as part of a synergy with other projects and private investments in coming years.
“It”™s huge,” said Anne N. Conroy, president and CEO of the Dutchess County Economic Development Corporation. “It further stabilizes and advances the high tech electronic manufacturing sector that we have in Dutchess County and in the Mid-Hudson. It anchors this area as a high technology region that is extremely advanced and continues to provide really the world”™s most advanced technologies.
“We used to think of IBM as just computers,” Conroy added, “But now there are computers in everything.”
The deal between the state and IBM announced July 15 ensures the company will invest roughly $330 million each year for each of the next three years in its silicon chip making facility in Fishkill. By way of comparison, that amount is roughly equivalent to the annual government operating budget of neighboring Ulster County. The deal also ensures no layoffs from the facility in 2008, and promises it will retain at least 1400 employees through 2011. The company has about 11,500 employees in its two Dutchess County facilities.
The state will contribute $65 million in direct cash payment to the company for the East Fishkill facility. IBM plans a statewide investment under the deal of some $1.5 billion, with the state”™s total contribution being $140 million. The bulk of the investment outside of East Fishkill will be for nanotech initiatives around Albany, and to construct a new state-of-the-art semiconductor packaging facility at an upstate location still to be determined.
The funding and agreement are geared toward creating the next generation of nano-chip, which officials hope can be used in applications ranging from video games to medical technology and even such emerging fields as bio-nanotech.
The immediate economic impact of the investment may be relatively modest in terms of spin-off benefits, because of the specialized nature of the equipment involved. IBM spokesman Jeff Couture said, “I don”™t have a lot of specifics,” on how the money would be spent, but said “Most of it will be capital equipment investment. The equipment that is used to make these semiconductor chips is very sophisticated, very expensive and it changes with each generation.”
Although it”™s difficult to quantify the benefits, Couture said, it”™s not difficult to describe them. “It keeps that facility as a leading chip facility in IBM and the industry.”
“The fact they”™re bringing in a major research facility and expanding the plant for this cutting-edge technology will be a win for this region in the long run,” said Christy Caridi of the Marist College Bureau of Economic Research. “It could be the catalyst of starting a really top-notch nanotech cluster here, which would be really perfect for the region.”
She said such a cluster would bring good jobs from high-tech companies and make the HudsonValley a “world-class player” in high-tech industry endeavors.
Conroy said that concrete economic benefits are an obvious benefit of IBM”™s investment, even if they are difficult to quantify precisely. “A whole industry of suppliers and vendors in the southern part of the county is oriented to IBM customers and suppliers and vendors.” She noted that the sort of hi-tech electronic jobs the company requires pay about $90,000 annually and each such employee creates nearly two additional jobs in other private sector business.
And she said merely having the facility receiving investment provides the prospect of more good jobs to the region.
“The spin-off of dollars and jobs and investment is tremendous,” Conroy said. “But this awareness of this area as a center of high tech is also tremendous, because that attracts other high-tech industry. And that brings good jobs.”
