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LI's 'Tech Highway' finally gaining traction, officials say

Steven Lindo says he founded SpringBoard Incubators Inc.

Steven Lindo says he founded SpringBoard Incubators Inc. in Hempstead because he wants to help local youth "be tech creators and not just tech consumers." Credit: Danielle Silverman

Long Island's "Tech Highway," billed as the economy's road to tomorrow, is finally gaining traction.

The decadeslong effort to create a tech ecosystem — and the high-paying jobs that come with it — by connecting researchers, investors, entrepreneurs and corporate executives, has met its share of detours, potholes and missed exits. But regional policy leaders say a payoff is near. 

That case was buttressed in January when the U.S. Department of Energy chose Brookhaven National Laboratory as the site of an electron-ion collider, a 10-year project costing as much as $2.6 billion. The collider, designed to unveil the mysteries of subatomic particles, is expected to secure the future of the roughly 2,500-employee Upton laboratory — an anchor of the Tech Highway — which has faced Washington's budget ax in recent years. 

The tech corridor is nearing maturation, said Kevin Law, chief executive of the Long Island Association business group. "We have the assets. We have the proximity to New York City. We're making investment in [the third track and other LIRR improvements] so we can tap the New York City labor pool and New York City can tap the Long Island labor pool."

Long Island's economic future hinges on generating high-paying jobs at a time when average weekly wages in high-cost Nassau and Suffolk counties -- $1,259 and $1,244 in 2018 — are barely higher than the national average of $1,144 and roughly half of Manhattan's $2,400.

The median annual wage of STEM — science, technology, engineering and math — occupations on Long Island is $79,320, 75% higher than the $45,220 for all workers in the region, according to the state Department of Labor.

Some companies already are in gear:

— Softheon Inc., a Stony Brook University incubator company with about 200 employees, pivoted from software that streamlines corporate workflows to an online platform that funnels Medicare, Medicaid and Obamacare benefits to millions of Americans.

— Codagenix Inc., a nine-person synthetic biology company at the Broad Hollow BioScience Park at Farmingdale State College, uses software to recode the genomes of viruses and has attracted $38 million in venture capital.

—Green Sulfcrete Corp., a six-person startup, licensed technology from the Brookhaven National Laboratory five years ago to market sulfur polymer concrete, said to be twice as strong as traditional concrete and impervious to acids, salts and chemicals.

—The Kobi Co., whose chief executive Andrew Ewen occupies space at the LIU Post incubator in Brookville, builds autonomous operating features into machines such as the Mean Green Mower, a self-driving, battery-powered commercial lawnmower, scheduled for beta testing this year.

Long Island's successes are modest compared to Silicon Valley, spawning ground of tech giants like Google parent Alphabet Inc. and "unicorn" startups valued at north of a billion dollars, like Airbnb Inc.

Long Island's strategy, however, is to create acorns, not unicorns, said Peter Donnelly, managing director of Accelerate Long Island, a Melville nonprofit which aims to provide seed money and commercial or research connections for promising startups.

"We're focused more on a workmanlike approach," said Donnelly, who also is Stony Brook's associate vice president for technology partnerships. "Getting a lot of them started. The failure rate is going to be high. A very tiny portion will hit modern unicorn status."

A new twist to Accelerate Long Island's mission is that it no longer focuses exclusively on Long Island, but considers startups in New York City and the Hudson Valley for funding as well. Ten Long Island companies received early-stage support from its original $1 million fund backed by private venture capital and a New York State grant.

More than 20 companies from around the metropolitan area are backed by the new Accelerate New York fund, including Qunnect LLC. That Stony Brook University incubator company is developing secured communications systems based on the university's quantum computing research. The new fund will be backed with $3 million in state investments and $25 million from private investors and venture capitalists.

"We have to take down municipal boundaries and look at this research corridor going all the way to Manhattan," said Law, who also serves as chairman of Accelerate Long Island. Law said the Long Island Rail Road's projects to add a third track to its main line and open East Side access to Grand Central Terminal will expand opportunities for reverse commuters to work on Long Island. 

The more expansive economic view of policymakers has stretched their vision for the Tech Highway itself. Law now sees the corridor running through Long Island's Brookhaven National Laboratory, Stony Brook University, Cold Spring Harbor Laboratory, Hofstra University, Northwell Health and into Manhattan, with its vast academic, research and financial resources.

Long Island's efforts to reverse-engineer the Silicon Valley formula have stretched back decades.

State Sen Kenneth LaValle (R-Port Jefferson), chairman of the Higher Education Committee and a longtime Tech Highway advocate, issued a paper in 1982 titled "High Technology Parks: A Marriage of Higher Education and Industry."

Long Island venture capitalist Leo Guthart said he became involved about a decade after Northrop Corp.'s 1994 acquisition of Bethpage aerospace manufacturer Grumman Corp., a cornerstone of the region's economy.

 Looking to replace the aerospace jobs gutted by the Northrop deal, "a small group of us decided to commercialize research," Guthart said. That group also included James Simons -- now the richest Long Islander, worth an estimated $21.6 billion --  and founder of East Setauket hedge fund Renaissance Technologies LLC, which pioneered computerized quantitative investing; and Walter Kissinger, former chief executive of infrastructure developer The Allen Group and brother of former Secretary of State Henry Kissinger.

They formed the Long Island Venture Fund, which evolved into Roslyn Heights-based Topspin Partners LP.

Meanwhile, Stony Brook University was mapping expansion plans, including a Research and Development Park that could nurture startups and inject academic research into the marketplace.

That plan hit a snag in 2006 when St. James-based Gyrodyne Corp. balked at the state's eminent domain payment of $26.3 million for 245.5 acres for the park and sued for fair compensation. Six years later, the state paid $187.5 million, including interest, for the land where the research park sits.

In 2011, regional leaders formed Accelerate Long Island with a goal of commercializing research from Brookhaven National Lab, Cold Spring Harbor Laboratory, Northwell Health (then known as North Shore-LIJ Health System), Hofstra and Stony Brook universities and other institutions.

Guthart, whose Topspin Partners is a partner in the Accelerate Long Island and Accelerate New York funds, said he and Simons soon found that translating research innovations to marketable products is no small feat.

"We went to Brookhaven National Laboratory. We went to Cold Spring Harbor. We tried to find out what they were doing," Guthart said. "It's not so easy. The thought that good technology turns into commercial success doesn't necessarily happen. Researchers are not the kind of people who create businesses."

And even when a company is headed toward success, that doesn't mean it will stay planted on Long Island. Guthart said the CEO of one promising battery developer with technology from Brookhaven National Laboratory simply moved the company, now called Sion Power, to Tucson, Arizona.

The technology is about to come to fruition, he said, but "it didn't help the Long Island economy." 

A 2011 report by the Long Island Regional Economic Development Council put a spotlight on a fundamental problem in the economy: The number of jobs in the biotechnology and information technology sectors fell far short of replacing the high-paying defense industry jobs lost after the collapse of the Soviet Union and the acquisition of Grumman.

In the years since, more Long Island technology and life sciences companies moved, downsized or were acquired.

Some of the big ones that got away: 

— OSI Pharmaceuticals, seen as a Long Island biotech cornerstone, was acquired by Astellas Pharma Inc. in 2010 and closed its Farmingdale facilities in 2013, laying off 115 employees.

— Enterprise software maker CA Technologies, which had 2,600 employees at its Islandia headquarters in 2000, was acquired in November 2018 by Broadcom Inc., which shuttered that facility.

— Filtration company Pall Corp., based in Port Washington, was acquired by Washington D.C.-based Danaher Corp. in 2015. Pall, with about 700 Long Island employees as of 2012, cut a deal with the Nassau County Industrial Development Agency in 2017 to preserve 225 jobs at its former headquarters.  

"The high-paying defense jobs were replaced primarily by lower-paying service jobs," the 2011 report said, noting that the average pay per Long Island employee had reached a 10-year low.

To be sure, in the post-World War II era, Long Island had successes in originating or attracting businesses, but companies can move in response to tax or workforce issues, economic incentives from other regions or the whim of executives.

Arrow Electronics Inc., once the region's largest public company, came to Long Island from Manhattan before migrating to Englewood, Colorado in 2011. CA Technologies migrated from Queens.

Simons' Renaissance Technologies LLC was incubated at Stony Brook before becoming one of the most successful hedge funds in history. 

But Donnelly said that Renaissance was driven by Simons' singular vision, which could not be duplicated.

"They broke every rule and every record for financial success," he said. "There's no getting around ... that talent and what he and he alone saw and built."

Some Long Island research, if successful, would seem to have commercial promise.

Bioelectronic devices are being developed at Feinstein Institutes for Medical Research in Manhasset to fight lupus, rheumatoid arthritis and other maladies. Feinstein is a part of Northwell Health, which also has an investment and venture capital arm.

Some projects, meanwhile, hinge on cross-pollination.

For instance, in 2015, Cold Spring Harbor Laboratory sealed an alliance that lets it bring its pre-clinical cancer research to select Northwell Health patients at an earlier stage.

Esther Sans Takeuchi is working on fast-charging batteries for electric cars at the Advanced Energy Research and Technology Center in Stony Brook's research park. Takeuchi, a professor of chemistry and materials science at Stony Brook, also holds a senior role at Brookhaven National Laboratory's energy sciences unit.

Eugene Sayan, founder and chief executive of Softheon, said the company's location at two of Stony Brook University's incubators gives the medical software provider a big advantage in recruiting graduates for hard-to-fill software engineering slots.

"The Stony Brook partnership is critical to us," he said. .

Sayan received a master's degree from New York Institute of Technology and led a previous Stony Brook startup.

Guthart said technology corridors like Silicon Valley, with Stanford and the University of California, Berkeley, have the magnetism to keep startups in their orbit.

"They go to school there and they stay there," he said. "That's the fundamental basis in my mind."

Biotech firm Codagenix sprang from research at Stony Brook University and now occupies about 2,500 square feet at the Broad Hollow BioScience Park at Farmingdale State College. 

Earlier this month, the company raised $20 million in venture capital to further develop an influenza vaccine and a modified virus for treating solid tumors, said Chief Executive J. Robert Coleman.

"All of our talent has come through Stony Brook in some way," he said. "We're commercializing a SUNY technology. We like the research and development space on Long Island."

In Hempstead, Hofstra University is offering business students a major in entrepreneurship and requiring that every business student take an entrepreneurship class.

Hofstra also has about a half dozen companies at its ideaHUb, a collaborative workspace for students and startups located prominently near the entrance to the business school.

"It's to reorient the mindset of students," said Hofstra provost Herman Berliner.

Not far from Hofstra's campus, Steven Lindo, a computer science professor at the university, has opened his SpringBoard Incubators Inc. space where he runs computer coding "hackathons" and entrepreneurship bootcamps.

"I'm hoping to bridge the digital divide, which I see as a knowledge divide," he said. "I want [the youth of Hempstead] to be tech creators and not just tech consumers."

Babak Beheshti, dean of the College of Engineering and Computing Sciences at New York Institute of Technology, said the 8,000-square-foot incubator space there is differentiated by its prototyping services, including 3D printing, which are available even to companies that are not in the incubator. 

"We're positioning ourself to be a prototyping center," he said. "Many [students] are coming in with businesses. They come in already generating revenue because of their skill sets."

After more than 15 years spent kicking the tires of companies that could blaze a trail down the Tech Highway, Guthart still believes in the thesis.

"We'll create a tech corridor, but it takes time." 

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