Citizen Carrie (at Carrie's Nation) has yet another interesting post about the state of Michigan wanting to give a massive tax break to a silicon manufacturer to get them to build an expansion to their facility. It's a fairly typical corporate welfare story, the kind where the big company threatens to take its ball and go home if it isn't given, well, anything it wants. Once it gets the tax break, the jobs will flow into the community (interesting how the magic multiplier is always invoked when jobs are brought to a community, never when they're taken away - wouldn't you once like to see an honest headline like, "XYZ Corp to layoff 3,000; 15,000 in local businesses expected to lose jobs").
But Carrie deals with that issue just fine. What caught my eye was this:
We were going to build on the two government labs, Argonne National Laboratory and Fermilab, which would generate spin-off companies. Furthermore, there was a major presence by the pre-eminent private research company, AT&T Bell Laboratories.
And how well has this worked? Let's take a look at the Wikipedia page for the Illinois Technology and Research Corridor, and see how it's doing. First, the two labs: Fermilab is in serious financial trouble, as Congress has refused to fund it at a maintenance level, much less making it into a crown jewel of the U.S. R&D system. It's no different for Argonne; their funding has been cut (story here).
Wikipedia cites three educational institutions, Illinois Institute of Technology, DeVry University, and Northern Illinois University. IIT is a fine school, but it has never been the source of new technology the way a Stanford or an MIT has been. DeVry is essentially a vocational school for computer programming. And NIU, which has produced a lot of fine teachers and accountants, has never been known as a research institution. (Wikipedia does omit several schools that have a presence in the corridor, but none offers any game changers in technology.)
So we're left with the companies. There is a degree of hand-waving on the Wikipedia page, as several companies nowhere close to the nominal corridor are included on their list (Abbott Labs, Motorola, TDS, Exelon). Others have no significant technical presence; Boeing may have moved their headquarters to Chicago, bringing a few hundred executive positions, but they don't do significant technical work here. Microsoft is on the list, but they're not developing products here.
And the other companies are in decline, reducing their presence in the Chicago area. Alcatel-Lucent is the current owner of what is left of Bell Laboratories, but they have mostly-empty buildings amid continual rumors that they will pull out of the area altogether. Tellabs has laid off 2/3 of its workforce since the end of the Internet bubble, and is promising to get rid of still more. (The one exception may be BP, which operates a large research facility along I-88, but it has never really established itself as a leader among technical companies in the area.)
That's it. The vaunted Illinois Technology and Research Corridor has failed, not bringing Silicon Valley to the Heartland (what some have called Silicon Prairie). There is no tech boom, no mass migration of the best and brightest to Chicago, just a lot of empty buildings and wasted tax incentives (Tellabs was given millions to move its corporate headquarters 5 miles - no huge bounty for the city of Naperville there).
There's the lesson for our friends in Michigan, and anywhere else that thinks that erecting highway signs and providing tax incentives will transform that irritating farmland into high-tech business parks. It doesn't work. There are a host of reasons, most particularly a lack of critical mass of brains and innovation, but Chicago is not a high-tech center, and it's highly unlikely that Saginaw, Michigan will fare any better.
But the companies that get these incentives, that are, in effect, being paid to make profits, they'll likely do just fine. And the politicians who cut the ribbons and talk up their contribution to the "great people of our state" will do just fine. Why their health should be a matter of public policy is beyond me.
But Carrie deals with that issue just fine. What caught my eye was this:
This is all part of a master plan to turn the Michigan into a high-tech nirvana, where a few hundred jobs here and there will supposedly make up the shortfall created by the thousands of manufacturing jobs that have already left the state.Michigan may be a little late to that party, but, here in Illinois, we've already had a taste of becoming the next Silicon Valley, and we spit it out. Some years ago, we created the Illinois Technology and Research Corridor, which essentially was Interstate 88 as it ran from Oak Brook to Aurora (roughly spanning DuPage County). The state put brown signs up on the highway touting this miracle area, and there were high hopes that we would see a wealth of innovation that would flow into the community and create a new center of accomplishment. This was going to put Chicago on the high-tech map.
We were going to build on the two government labs, Argonne National Laboratory and Fermilab, which would generate spin-off companies. Furthermore, there was a major presence by the pre-eminent private research company, AT&T Bell Laboratories.
And how well has this worked? Let's take a look at the Wikipedia page for the Illinois Technology and Research Corridor, and see how it's doing. First, the two labs: Fermilab is in serious financial trouble, as Congress has refused to fund it at a maintenance level, much less making it into a crown jewel of the U.S. R&D system. It's no different for Argonne; their funding has been cut (story here).
Wikipedia cites three educational institutions, Illinois Institute of Technology, DeVry University, and Northern Illinois University. IIT is a fine school, but it has never been the source of new technology the way a Stanford or an MIT has been. DeVry is essentially a vocational school for computer programming. And NIU, which has produced a lot of fine teachers and accountants, has never been known as a research institution. (Wikipedia does omit several schools that have a presence in the corridor, but none offers any game changers in technology.)
So we're left with the companies. There is a degree of hand-waving on the Wikipedia page, as several companies nowhere close to the nominal corridor are included on their list (Abbott Labs, Motorola, TDS, Exelon). Others have no significant technical presence; Boeing may have moved their headquarters to Chicago, bringing a few hundred executive positions, but they don't do significant technical work here. Microsoft is on the list, but they're not developing products here.
And the other companies are in decline, reducing their presence in the Chicago area. Alcatel-Lucent is the current owner of what is left of Bell Laboratories, but they have mostly-empty buildings amid continual rumors that they will pull out of the area altogether. Tellabs has laid off 2/3 of its workforce since the end of the Internet bubble, and is promising to get rid of still more. (The one exception may be BP, which operates a large research facility along I-88, but it has never really established itself as a leader among technical companies in the area.)
That's it. The vaunted Illinois Technology and Research Corridor has failed, not bringing Silicon Valley to the Heartland (what some have called Silicon Prairie). There is no tech boom, no mass migration of the best and brightest to Chicago, just a lot of empty buildings and wasted tax incentives (Tellabs was given millions to move its corporate headquarters 5 miles - no huge bounty for the city of Naperville there).
There's the lesson for our friends in Michigan, and anywhere else that thinks that erecting highway signs and providing tax incentives will transform that irritating farmland into high-tech business parks. It doesn't work. There are a host of reasons, most particularly a lack of critical mass of brains and innovation, but Chicago is not a high-tech center, and it's highly unlikely that Saginaw, Michigan will fare any better.
But the companies that get these incentives, that are, in effect, being paid to make profits, they'll likely do just fine. And the politicians who cut the ribbons and talk up their contribution to the "great people of our state" will do just fine. Why their health should be a matter of public policy is beyond me.
1 comment:
Good post, Androcass. It's terrible that Argonne and Fermilab can't get the funding they deserve. I guess it's all about putting the expected results in your funding proposal, which is impossible when you're dealing with pure research as opposed to applied research.
Unless I'm mistaken, it seems (just be passing through) that West Virginia has a pretty successful high tech corridor.
I wish I knew a little bit more about the Hemlock Semiconductor workforce. Do they all have to be highly skilled? Or can an average Joe or Jane off the street be trained to perform the work after a minimal training/education period? Dow Chemical is headquartered in nearby Midland and has traditionally attracted many highly skilled workers to the area. Midland is a company town with an excellent school system, so the kids there are raised with the expectation that they will go off to college and get high-paying jobs once they graduate.
My relatives have retired from Dow a long time ago, so I don't really know what's going on there anymore. But I do know that Dow is still top dog and is still the main employer, although we've heard more about layoffs over the last several years than hiring binges. Like with the auto industry, I don't think the people of Midland think in terms of their children automatically working for Dow once they graduate from college.
I know that Dow has some sort of ownership of Hemlock Semiconductor. I don't know if Dow routinely sends some of their workforce in the direction of Hemlock or not. It seems there would be a lot of overlap of skills between employees of the two companies. I don't know if there is an excess workforce available to start working for Hemlock once they expand or not. I would think that if a highly skilled worker gets laid off from Dow, they would leave the state pretty quickly rather than wait for new opportunities to arise in the area. Also, I don't think a college graduate would necessarily move to Midland and bus tables for a while waiting for a position to open at Hemlock. I would think at some point they'd have to recruit people to come in from out of state. But, at this point, this is all guesswork, since we don't even know if Hemlock will be staying.
Post a Comment