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MOHAWK VALLEY

NEXTGEN A special edition of The Mohawk Valley Business Journal

INSIDE:

 NANOTECHNOLOGY:

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MAY 23, 2016 I MOHAWK VALLEY BUSINESS JOURNAL I MOHAWK VALLEY NEXTGEN

CNYBJ.COM

The Mohawk Valley builds high-tech bridge to the new economy BY NORMAN POLTENSON npoltenson@cnybj.com

History

Flash back to the first decade of the 19th century. Upstate New York west of Albany was a vast wilderness comprised of forests, swamps, and dense underbrush. Shipping goods between the Buffalo settlement and Albany was costly: There were no railroads, and the trip by stagecoach took two weeks. Some dreamed of connecting Albany and Buffalo via a canal that would reduce both the time and cost to transport people and goods. A project to build a 363-mile canal that was 40 feet wide and 4 feet deep was proposed to President Thomas Jefferson, who admired the audacity of the concept but refused to underwrite the idea with federal funds because of the cost, lack of trained engineers, and the unforgiving terrain. Undeterred, DeWitt Clinton, mayor of New York City, started a canal fund and enlisted the support of both friends and adversaries. In April 1817, then Gov. Clinton convinced the New York Legislature to authorize $7 million for the construction. Officials broke ground on July 4 at a spot between Utica and Rome. Teams of oxen plowed the ground, and laborers, mostly Irish, dug the canal with picks and shovels. Paid $10 a month and encouraged with barrels of whiskey placed strategically along the route, the construction proceeded for eight years in an easterly and westerly direction from the original starting point in the Mohawk Valley. On Oct. 26, 1825, Gov. Clinton officiated at the opening of the Erie Canal by riding a canal boat — the Seneca Chief — from Buffalo to New York City. The impact of the canal was both immediate and dramatic. Settlers poured into Western New York and beyond to the Midwest. The cost of shipping between Buffalo and Albany dropped 90 percent and transportation time was halved. Farm produce and raw materials traveled east while manufactured goods and supplies flowed west. The canal turned a profit in its first year of operation, and the collected tolls paid back the construction cost in just nine years. Despite later competition from railroads, the tonnage on the canal increased steadily until 1872, when it peaked. In 1825, the Erie Canal was America’s symbol of the innovativeness of the fledgling country.

Economic decline

Clinton’s vision and persistence launched the Industrial Revolution in America, which attracted people and manufacturing to Upstate and set in motion 125 years of prosperity for the Empire State. Upstate’s economic de-

cline didn’t begin until the post-World War II period, when major manufacturers began to exit the region, seeking lower costs and flexibility in their operations available in the South. As global trade accelerated in the 1990s, others moved to Mexico and offshore, seeking both lower costs and proximity to new customers. The Mohawk Valley wasn’t spared the decline of manufacturing and, in 1995, endured yet another big blow when Griffiss Air Force Base in Rome officially closed. “It was a shock when the flag came down [at the base] on Oct. 1,” recalls Steve DiMeo, president of Mohawk Valley EDGE (Economic Development Growth Enterprises Corp.). DiMeo EDGE is an economicdevelopment organization designed to help businesses to locate and grow primarily in Oneida and Herkimer counties. It links the area’s various economic-development agencies in order to streamline projects and assist with finance packages. DiMeo started with the Oneida County Industrial Development Corp. in 1993, which later became EDGE when he assumed the title of president in 1997. “Actually it was a double shock, because the base not only closed, but the Air Force was also intent on moving the Air Force Research Lab (AFRL), which was one of the country’s premier research facilities. Retaining AFRL was the core of our re-use plan to redevelop the base into a business and technology park. We mobilized all of our energy to convince the Air Force and Department of Defense (DoD) that we needed AFRL to be our anchor tenant if we were to have any chance of redevelopment. In the 1990s, the mood in the Valley was best described as doom and gloom,” DiMeo notes. Two decades later, the Griffiss Business and Technology Park is humming. “Griffiss is one of several bright spots in the Valley,” says DiMeo. “The Park now includes more than 70 companies with a balanced mix between military and commercial activity. These companies employ 5,800 people who are drawn from 26 counties. AFRL continues to be our anchor tenant with more than 1,000 employees and an annual budget in excess of $1 billion. And with all this success, we still have room in the Park to expand.”

Clusters

EDGE’s economic-growth plan is focused on expanding industrial clusters SEE BRIDGE, PAGE 19

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fter nearly a halfcentury of economic upheaval that has seen the exodus of jobs, population and wealth from the region, the Mohawk Valley is at the threshold of an economic transformation. Though many view the past fifty years as proof that the Mohawk Valley is doomed to a future of economic stagnation, rising poverty rates and the continued decay of our cities and Main Streets, we completely reject that notion. We have decided to define our future and put in motion key strategies that led to Governor Cuomo’s August 20 game - changing announcement of a $4 billion investment with 2,500 new jobs at SUNY Poly’s Utica campus by ams and GE. We have the will and the ability to turn our decisions into reality. Recent announcements such as the ams investment do not automatically ensure economic success. We need to and will focus on other key economic drivers and enabling investments that will ensure that our transformation is broad-based, regional, sustainable and, more important, focused on providing opportunities for segments of our community traditionally disenfranchised or trapped by barriers that preclude their ability to achieve economic success. Developers are looking to build, for example, downtown lofts and market rate rental housing to support what they see as a looming economic growth spurt sparked by the investments in nanotechnology at SUNY Poly. That level of interest has been sorely lacking for decades but developers investing

across the region are starting to see opportunities in a region, poised for dynamic growth. Downtown Utica is receiving major interest as buildings are being reclaimed and repurposed for mixed-use loft apartments and commercial uses. The Utica Auditorium has breathed new life into the region as a major entertainment venue with the Utica Comets and professional hockey bringing immense civic pride back to the area. Utica is not stopping there, plans are underway to reclaim a key part of Utica’s downtown to transform it as a major innovation district, given its proximity to the newly revitalized Landmarc building, Bagg’s Square, the Utica Auditorium, Harbor Point, and serve as a nexus between Utica’s downtown and SUNY Poly. The existing potential for nearly $750 million in public and private investment in downtown Utica and nearby Harbor Point over the next ten years would shape Utica’s downtown as a desired place to live, work, play and learn. Rome is also poised for success. Griffiss continues to be a critical regional employment center and has major convergence opportunities with SUNY Poly in bringing nano, cyber, and UAS together. The city has embarked on creating new housing opportunities to capture a share of the tech workforce that will emerge with Griffiss and nearby SUNY Poly. Opportunities also abound with repurposing of key buildings and sites that are seeking new economic uses as the region transitions from manufacturing to a tech economy.

The Mohawk Valley is at the threshold of an economic transformation.


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MOHAWK VALLEY NEXTGEN I MOHAWK VALLEY BUSINESS JOURNAL I MAY 23, 2016

CNYBJ.COM

FOCUS: NANOTECHNOLOGY

NORMAN POLTENSON/BUSINESS JOURNAL NEWS NETWORK

Mohawk Valley region becomes a nano hub BY NORMAN POLTENSON npoltenson@cnybj.com

Angels

How many angels can dance on the head of a pin? The theological question occupied medieval scholars, including Thomas Aquinas. The issue was how to calculate the maximum density of angels in a small volume. Quantum physics has wrestled with the same question and concluded that the head of a pin is not infinitely divisible, assuming angels have mass. (As a side note, physicists also conclude that if the angels dance quickly and in the same direction, the pin can accommodate more dancing angels than if they were stationary.) So what do we mean when we use the word “small?” Scientists call it “nano,” which comes from the Greek meaning “little old man” or “dwarf.” In today’s parlance, it translates as extremely small, even microscopic. When the prefix “nano” is attached to a measuring tool, the distances are called nanometers, of which there are 1 billion in a meter. Too small to picture it? How about 25.4 million parts to an inch? You’re not into numbers? Okay, then visualize one sugar molecule or look at a human hair, which is 50,000 to 100,000 nanometers in width. Still having difficulty grasping one nanometer? Try this: If a marble were one nanometer, then one meter would be the size of planet earth. Bottom line: we’re thinking really small. What is nanotechnology, and who measures things in nanometers? Nanotechnology is the science of manipulating materials on an atomic or molecular scale, primarily to build microscopic devices. Scientists and engineers are making materials on a nanoscale level to take advantage of properties such as higher strength, lighter weight, control of the light spectrum, and greater chemical reactivity. No sector has garnered more attention working on a nanoscale level than the semiconductor industry, which has spent the last half century manufacturing products that are smaller, faster, and cheaper. The value of semiconductors is their use in miniaturizing electronic components, such as transistors, by embedding integrated circuits into semiconducting material, usually silicon or germanium. The result is a series of integrated circuits we call a microchip, which may contain millions of electronic components.

On April 20, hundreds of Mohawk Valley celebrants attend a reception at the Munson-Williams-Proctor Museum following a groundbreaking ceremony by the Austrian manufacturer ams, A.G. The company has started construction on a new, 60,000-square-foot, computer-chip fabricating plant in the Marcy Nanocenter. Corporate officials project that operations will begin in the first quarter of 2018.

From toilets to tombstones

Today, everything we do is dependent on microchips. Would you like cash from an ATM, want to check in at the airport kiosk, need to make a call on your cell phone? They all contain embedded chips. So do your pacemaker, your car, and your computer. Now switch from high-tech to low-tech. Running shoes that feed data on pace, distance traveled, and calories burned; fishing reels and lures that control a cast or replicate the electrical discharge of a wounded fish; and writing pens containing a camera and audio recorder all contain chips. Do you need a computerized commode to shut off the flow of water if the unit springs a leak or overflows or perhaps to analyze your urine to send to a physician? How about a gravestone marker that tells the deceased’s story in text, photos, and videos? The bereaved need only point a cell phone at the marker to retrieve the information. Afraid your family pet will wander off? Millions of dogs and cats are now walking around with a chip the size of a grain of rice that contains the owner’s contact information. One British company even manufactures the SureFlap cat door that only opens for pets whose microchip it recognizes.

Economic impact

Chip makers are now manufacturing intelligent devices that are programmable, and they are learning how to package the chips to fill volumes smaller than a pin head. Not surprisingly, semiconductor manufacturing is big business. The U.S. semiconductor industry today is the third largest manufacturer, behind petroleum refining and pharmaceutical preparation, and is growing at the fastest rate of any other major U.S. industry. U.S. chipmakers generate more than $170 billion in annual sales and employ more than 250,000 workers. Indirectly, the industry supports an additional 1 million jobs. Most fab plants employ

between 1,000 and 1,500 people and pay salaries, on average, of more than $70,000 annually. For every fab job created, another 1.9 jobs are generated in the region, and in New York State 2.2 additional jobs are created. One fab facility is estimated to produce a $2.8 billion economic impact on the local economy over a five-year period. In 1997, New York State recognized the long-term potential of the semiconductor industry and the beneficial impact on communities where fab plants were sited. The state requested that its communities that are considered potential sites for chip fabrication respond. With Mohawk Valley EDGE taking the lead, the Marcy Nanocenter site was designated in 1998 as one of 13 candidates across the state. In 2006, Hector Ruiz, CEO of Advanced Micro Devices (AMD), called the Marcy option a “world-class site for nanoelectronics manufacturing.” In 2012, Global Foundries (spun off from AMD in 2009) opened its first New York fab plant at Malta in Saratoga County. The economic impact has been substantial. Global Foundries has invested $8 billion in its “Fab-8” facility and New York has invested more than $1 billion. Fab-8 employs more than 3,000 people with an average annual salary of more than $91,000. The staff comes from 40 countries with 50 percent of the hires hailing from New York State and 70 percent of the staff living in Saratoga County. The workforce profile includes technicians (40 percent), engineers and scientists (50 percent), and business support (10 percent).

Manufacturing

The success in Malta spurred EDGE to complete its site preparations. Today, the Marcy site comprises 428 acres, offers an excess of 28 million gallons of water per day, has no background noise or vibrations, is located in close proximity to major highways, boasts both road and sewer infrastructure, contains fiber-optics, and is shovel-ready. In July 2015, Austria

Mikro Systeme, A.G., (ams) a chip fabricator, contracted to be the first tenant at the Marcy site to build a 200/300-mm wafer plant. (Wafer is the name for a thin slice of substrate that contains integrated circuits.) The plant will be publicly owned and leased to ams, which will assume operating costs and most of the capital investment. The total investment over the first 20 years is estimated at more than $2 billion, and the plant will employ more than 700 people. The Austrian manufacturer is planning to begin construction this summer on a 600,000-square-foot fab plant and expects to be in operation by the second quarter of 2018. According to Otilia Ayats-Mas, a senior marketing communications manager at ams, “[The company] … was attracted to the Marcy site because of the highly skilled workforce; the proximity to higher education and research institutions … [conducting] research in photonics, nanotechnology, and bio sensing; along with a favorable business environment.” “This is just the beginning,” says Steve DiMeo, president of Mohawk Valley EDGE. “Marcy Nanocenter is uniquely positioned to attract other semiconductor firms looking for added capacity. The site is designed to accommodate 8.5 million square feet of manufacturing space. Located on the SUNY Poly Utica campus, Marcy is in the heart of New York’s growing nanoelectronics manufacturing and R&D cluster. Collaboration among academia, government, and industry has built a vibrant nanotechnology ecosystem. SUNY Polytech Institute (The union of SUNYIT in Utica and the Colleges of Nanoscale Science and Engineering in Albany) is now creating an Innovation Accelerator Center and Advanced Manufacturing Performance Center AMP) in Utica to ensure the supplychain growth. AMP will focus initially on the semiconductor industry, but later expand into photovoltaics, power electronics, LED SEE NANOTECHNOLOGY, PAGE 19

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MAY 23, 2016 I MOHAWK VALLEY BUSINESS JOURNAL I MOHAWK VALLEY NEXTGEN

FOCUS: NANOTECHNOLOGY

Indium Corp.’s NanoFoil product brings the heat

CNYBJ.COM

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BY ERIC REINHARDT ereinhardt@cnybj.com CLINTON — Indium Corp. manufactures a product called NanoFoil, which a company spokesman describes as an “energydelivery product.” NanoFoil is a reactive, multi-layer foil that provides instantaneous heat for applications in industries that include the semiconductor, aerospace, automobile, electronics, biomedical, and defense markets, according to the Indium website. Most of the firm’s work in nanotechnology centers around the NanoFoil product, which Indium started producing in 2009, says Short Rick Short, Indium’s director of marketing communications. That’s been the primary focus for the firm’s work in that area, he adds. However, Indium, headquartered in Clinton, has been working in the nanotechnology field for about a decade, according to Short. “We are the first nanotechnology manufacturer in all of upstate New York. We’ve been manufacturing nanomaterials for many years,” he notes. He spoke with The Business Journal on April 26. Nanotechnology, as Short describes it, “just means very small.” “It’s just a way of saying working with materials and processes on a very small scale. It could be a nanomachine. It could be a nanomaterial,” says Short. Indium develops and manufactures materials used primarily in the electronics-assembly industry, according to its website. The firm is a materials supplier to the global electronics, semiconductor, thin film, thermal management, and solar markets.

About the product

As Short explains it, NanoFoil is approximately as thick as a piece of paper, but about one thousand layers of NanoFoil comprise that thickness. When assembled the proper way, NanoFoil builds in “a lot of energy.” The product can release that energy in a “very controlled and focused” manner. “What NanoFoil does is it basically

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INDIUM CORPORATION 34 Robinson Road Clinton, NY 13323 (315) 853-4900/indium.com n Year Established: 1934 n No. of CNY Employees: 400 n No. of Total Employees: 700 n Products Made Locally: Materials manufacturer and supplier to the global electronics, semiconductor, thermal management, thin-film, and solar markets n Certifications: ISO 9001 n Markets Served: Electronics assembly, semiconductor fabrication & packaging, solar assembly, thin film, & thermal management n President & CEO: Gregory P. Evans n VP SM: Ross Berntson n CFO: Mike McKenna n VP Technology: Ning-Cheng Lee Source: Manufacturing Directory 4/11/16 Central New York Business Journal

heats things up in a very controlled manner very quickly [with] high temperature and relatively low power,” he says. One application for NanoFoil is aiding the bonding process of two pieces of metal without any warping involved, according to Short. When heat is involved in the process, the materials can warp. When the materials are bonded using a sheet of NanoFoil in between, it provides the heat to generate the proper bonding at a very high temperature. However, it’s such a “small amount of overall energy” that the base metals don’t expand and contract. “It just heats the microsurfaces, bonding them together, and doesn’t produce the warping, so you don’t distort the materials during the bonding process,” says Short. The use of NanoFoil becomes “very valuable” in the assembly and manufacture of sputtering targets, he adds. Sputtering targets are used in the semiconductor and solar industries. The process is called NanoBonding, according to the Indium website. Short declined to name customers for Indium’s NanoFoil product, citing company policy, The Business Journal also asked if Indium has any plans for investment in its nanotechnology product line, and if so, if the company has any plans for additional hiring. “I have no information at this time, but we certainly are very connected to the marketplace and we’ll react according to what the market will allow,” says Short. Indium operates 12 facilities, worldwide, including in the U.S, United Kingdom, China, Malaysia, Singapore, n and South Korea.


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MOHAWK VALLEY NEXTGEN I MOHAWK VALLEY BUSINESS JOURNAL I MAY 23, 2016

CNYBJ.COM

FOCUS: NANOTECHNOLOGY

BY ERIC REINHARDT ereinhardt@cnybj.com MARCY — SUNY Polytechnic Institute (SUNY Poly) has broken ground on its new computer-chip fabrication facility at the Marcy Nanocenter. The 360,000-square-foot site will be home to Austria–based ams AG’s advanced-sensor manufacturing, the office of Gov. Andrew Cuomo said in a recent news release. The computer-chip fab is generating more than $2 billion in initial private investment and more than 1,000 new jobs in the Mohawk Valley. The April 20 groundbreaking marks a “major milestone” in Cuomo’s Nano Utica initiative, which is now projected to create at least 4,000 jobs over the next decade. It includes research and development at the computer chip commercialization center (QUAD C) in partnership with General Electric. The recently enacted state budget allocates money to the Mohawk Valley, including $585 million to support Nano

Utica and the fab’s phase I construction. Crews are building the wafer-fab facility in partnership with New York, SUNY Poly CNSE, Fort Schuyler Management, and Mohawk Valley EDGE, according to Cuomo’s office. Building this new wafer fab enables ams to “achieve its plans for growth” and to meet the “increasing demand” for sensor products made at advanced-manufacturing nodes, Alexander Everke, ams CEO said in the governor’s news release. “Our decision to locate the facility in New York was motivated by the availability of a highly skilled workforce; the proximity to prestigious educational and research institutions; and the favorable business environment, backed by public and private partners. What we will create together in Utica will be the most productive ‘More than Moore’ fab worldwide,” said Everke. AMS AG will staff and operate the wafer-fabrication facility to support the company’s “high performance,” analogsemiconductor operations. Its products have a “global” marketplace

PHOTO CREDIT: GOV. ANDREW CUOMO’S FLICKR ACCOUNT

SUNY Poly breaks ground on computer-chip fabrication facility at Marcy Nanocenter

New York Lt. Gov. Kathy Hochul delivers remarks during the April 20 groundbreaking of SUNY Polytechnic Institute’s upcoming computer-chip fabrication facility at the Marcy Nanocenter. The 360,000-square-foot site will be home to Austria–based ams AG’s advanced-sensor manufacturing.

in products ranging from smartphones, tablets, and other communications devices; and those produced by automakers, audio and medical-equipment manufacturers and others. “Hundreds of millions” of devices use ams sensors to recognize light, color, gestures, images, motion, position, and environmental and medical parameters. The region should “take pride in what is happening here,” Alain Kaloyeros, president and CEO of SUNY Poly, said in Cuomo’s release. “… through the governor’s Nano Utica initiative, New York will not only manu-

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facture the finest sensor products in the world, but also lead in advanced research and development with our industry partners on even more cutting edge sensor and computer-chip technologies,” said Kaloyeros. “This is yet another example of Gov. Cuomo’s laser focus on economic development in upstate New York,” Lt. Gov. Kathy Hochul said in the release. “Advanced manufacturing and the progressive investment strategies behind it have been key to the revitalization of our state and are now shaping its future success.” 


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MAY 23, 2016 I MOHAWK VALLEY BUSINESS JOURNAL I MOHAWK VALLEY NEXTGEN

FOCUS: NANOTECHNOLOGY

MVCC’s NanoDays event offers students hands-on learning opportunities

BY JOURNAL STAFF news@cnybj.com UTICA — With “Nano Utica” and the Quad-C project promising to create more than 1,000 high-tech jobs in the Mohawk Valley, people in the region have been hearing a lot about nanotechnology. That includes the ways it is revolutionizing research and development in medicine, computing, new materials, food, energy, and other areas of everyday life, the Mohawk Valley Community College (MVCC) says. On Saturday, April 11, from 9 a.m. to 1 p.m., MVCC brought such concepts to life at NanoDays, part of a nationwide festival of educational programs organized by the Nanoscale Informal Science Education Network (NISE Net), and sponsored by MVCC, the college said in a news release.

MVCC’s Information Technology Building on the Utica Campus was transformed, for this event, into a showcase of everything nano — giving both children and adults a “unique, hands-on opportunity to explore the world of atoms, molecules, and nanoscale forces,” the college said. A variety of exhibits demonstrated the “special and unexpected properties found at the nano scale, examined tools used by nanoscientists, and invited discussion of technology and society.” Participants investigated new nano products and materials. Hands-on activities invited visitors to explore polarized light, see how scientists use special tools to study tiny things, and imagine how nanotechnology could change how we eat, the release stated. Other activities included experimenting with heat transfer and completing an electrical circuit using the world’s thinnest material. NISE Net is a national community of researchers and informal science educators dedicated to increasing public awareness, engagement, and understanding of nanoscale science, engineering, and technology. The NISE Network community in the United States is led by 14 organizations, and includes hundreds of museums and universities nationwide. NISE Net was launched in 2005 with funding from the National Science Foundation, and received a five-year renewal in 2010. Through events like NanoDays, the NISE Network says it is building partnerships between science museums and research centers to boost their capacity to engage the public in learning about nanoscale science and engineering, according to the release. MVCC’s Center for Science, Technology, Engineering and Mathematics (STEM Center) says it prepares students in these

fields whether they seek a one-year certificate, an associate degree, or want to transfer to a four-year college. Engineering and physical sciences programs are the gateway to four-year degrees and give students hands-on experience in Comm chemistry, physCOB_Oneonta Lenders_FORBES_Mohawk Valley Business Journal_Jr Page_7.5x9.875_4c ics, engineering, and chemical technology.

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MOHAWK VALLEY NEXTGEN I MOHAWK VALLEY BUSINESS JOURNAL I MAY 23, 2016

FOCUS: UAS

NORMAN POLTENSON/BUSINESS JOURNAL NEWS NETWORK

CNYBJ.COM

Larry Brinker, executive director and general counsel of the NUAIR Alliance, heads the 501 (c)(4) nonprofit corporation comprised of more than 100 partners. NUAIR manages the Griffiss test site, one of only six, designated, unmanned-aircraft systems (UAS) test sites in the country.

Griffiss UAS test site positions the Mohawk Valley for market leadership BY NORMAN POLTENSON npoltenson@cnybj.com

History of unmanned aerial vehicles

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It’s Aug. 22, 1849. The Austrians are attacking the city of Venice with the first recorded use of unmanned-aerial vehicles (UAV) — namely, balloons loaded with explosives but no people. Once the balloons were (hopefully) over the city, an operator activated a long wire that released the bombs. The Austrians enjoyed some success with this new device, but some of the balloons blew back over the Austrian lines. In 1883, the first aerial photo was snapped using a kite, a camera, and a very long string. The new technology was used in the Spanish–American War of 1898 for aerial reconnaissance. The first pilotless aircraft was flown in 1916, designed as an aerial bomb, much like today’s cruise missiles. The British, in 1935, introduced an advanced version of the pilotless aircraft which they dubbed “Queen Bee.” This designation may be the source of why we often call unmanned systems “drones.” That same year, a British ex-pat named Reginald Denny demonstrated a low-cost prototype drone designed for target practice. In 1938, his aviation business — Radioplane Company, located in Van Nuys, California — opened up the drone market for non-military purposes by selling radioplanes to hobbyists. (Note: Norma Jeane Dougherty was a technician at Radioplane when an army photographer took her picture, which appeared in Yank magazine in 1945. Dougherty later changed her name to Marilyn Monroe.) For the next seven decades, drone development was pursued largely by the military.

Interest in commercial drones soars

The increased level of interest in the commercial use of drones is new. As recently as 2011, venture capitalists limited their investments in drone companies to a meager $7.9 million, according to Dow Jones VentureSource. Last year, the number topped out at $855.3 million. What

changed in the commercial market? “The main inhibitor to the commercial growth of UAS, [what we now call unmanned-aircraft systems, formerly unmanned-aerial vehicles], has been the lack of a regulatory structure,” says Lawrence H. Brinker, executive director and general counsel of the NUAIR Alliance (Northeast UAS Airspace Integration Research), a 501(c) (4) nonprofit corporation comprised of more than 100 partners, including both public and private entities and academic institutions. NUAIR is the organization that manages the Griffiss International Airport UAS test site in Rome, one of only six UAS test sites in the U.S. authorized by an Act of Congress to develop sense-and-avoid technologies. “UAS will be transformative,” continues Brinker. “Many of today’s drones use offthe-shelf technology, which makes them less expensive to build, operate, and maintain. They can fly for longer periods and are deployed in a number of different terrains … Many aren’t dependent on prepared runways. [Now] … combine the features of the UAS with its wide variety of uses, including mapping, agricultural monitoring, disaster management, power-line surveys, law enforcement, telecommunications, weather monitoring, news reporting, oiland-gas exploration, and transportation, just to name some markets that will be impacted. [Unfortunately], the FAA (Federal Aviation Administration) stiffed-armed private industry for 10 years by dragging its feet. This put the U.S. behind development in other industrialized countries. It wasn’t until 2012, when Congress passed the Modernization and Reform Act which mandated that the FAA figure out how to integrate UAS into our national air space, that interest in commercial applications really spiked. The Act also directed the creation of federal test ranges for drones and gave the FAA the authority to issue exemptions from current aviation regulations under Section 333. This is how companies have begun commercial operations.” The Association of Unmanned Vehicle Systems International SEE GRIFFISS, PAGE 21


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MAY 23, 2016 I MOHAWK VALLEY BUSINESS JOURNAL I MOHAWK VALLEY NEXTGEN

CNYBJ.COM

PHOTO CREDIT: NUAIRALLIANCE.ORG

FOCUS: UAS

Pro Drones USA, LLC on display at the 2015 NUAIR UAS Industry Days at the Turning Stone Resort Casino in Verona on Sept. 23, 2015.

Rome office expands Pro Drones’ footprint into the U.S. BY ERIC REINHARDT ereinhardt@cnybj.com

PHOTO CREDIT: WWW.MICRODRONES.COM

ROME — Pro Drones USA, LLC, the U.S. expansion of Pro Drones Canada that operates in Rome, is working to sell, market, and distribute drones, or unmannedaerial vehicles (UAVs). Pro Drones is the “parent-company name” of the entity that’s marketing its drone products as Microdrones, says Mike Dziok, marketing director for Pro Drones USA, LLC. He spoke with The Business Journal on April 26. The company previously marketed its products in Canada as Avyon. Avyon in 2014 acquired the exclusive rights to manufacture, distribute, and develop products for the German firm Microdrones GmbH in North America, according to the Avyon website. Dziok described Avyon as an “alliance partner” of Microdrones. Avyon took that step knowing the U.S. government was permitting test flights for commercial applications of drones. Microdrones GMBH had launched in Germany in 2006, according to the Avyon website. Dziok told The Business Journal in a follow up email message on April 26 that the company’s drone products were rebranding from Avyon to Microdrones. Those in the UAV industry are “very familiar” with the Microdrones brand and reputation, Vivien HeriardDubreuil, president of the newly-expanded company, said in an email that Dziok forwarded. “Avyon built its North American business on the engineering capabilities of

the Microdrones facility in Germany, implementing successful solutions and services by Avyon in North America. These companies are a natural and complementary fit, and we’ll be going to market as one company moving forward: Microdrones.” “We have the most reliable product in the commercial UAV industry and have had great success to date selling it in Europe. The opening of markets in the U.S. last year presented us with a tremendous opportunity for growth; I’m thrilled about joining forces and excited for what the future will bring,” Sven Juerss, CEO of Microdrones GmbH in Germany, said in the same email.

Rome office

The U.S. operations of Pro Drones USA (Microdrones) launched as Avyon last fall with a facility at 1101 Floyd Ave. in Rome, according to Dziok. It currently operates in a temporary office trailer on the Rome campus of Mohawk Valley Community College (MVCC). The college sponsors the company in New York’s START-UP NY program. START-UP NY is Gov. Andrew Cuomo’s program offering new or expanding companies and business ventures to operate completely tax-free for 10 years in areas on or connected to campuses of the State University of New York. The parent company and Canadian operations are headquartered in Vaudreuil-Dorion, Quebec, according to the Avyon website. Besides Microdrones, the parent company also has a services business that it SEE PRO DRONES, PAGE 22

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FOCUS: UAS

Griffiss Airport UAS test site participates in intricate test ROME — The NUAIR Alliance said it participated in the largest test of NASA’s unmanned-aircraft systems (UAS) trafficmanagement research platform on April 19. The test involved 22 drones flying simultaneously at six different Federal Aviation Administration UAS test-site locations around the nation, including the New York UAS Test Site at Griffiss International Airport, according to a posting on the NUAIR Alliance website. The NUAIR Alliance contended in the web post that it “continues to be at the cutting edge of research and development, including this type of data collection for NASA.” The NUAIR Alliance is a not-for-profit coalition of more than 90 private and public entities and academic institutions working together to operate and oversee UAS

PHOTO CREDIT: NUAIRALLIANCE.ORG

BY JOURNAL STAFF news@cnybj.com

test ranges in New York, Massachusetts, and Michigan. Headquartered at Griffiss International Airport, in Rome, NUAIR says it manages one of just six FAA-designated UAS test sites in the U.S. It seeks to lead research and deployment technologies that establish the case for safe UAS operations in U.S. commercial airspace. NUAIR is led by CenterState CEO and Mohawk Valley EDGE in New York. 

Drones fly in the largest test of NASA’s unmannedaircraft systems (UAS) traffic-management research platform on April 19. The New York UAS Test Site at Griffiss International Airport in Rome participated in the test.

© 2016 Indium Corporation


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MAY 23, 2016 I MOHAWK VALLEY BUSINESS JOURNAL I MOHAWK VALLEY NEXTGEN

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FOCUS: CYBERSECURITY

Mohawk Valley is the epicenter in the cybersecurity industry BY NORMAN POLTENSON npoltenson@cnybj.com

Cyber etymology

The early Greeks called it “kubernetes,” meaning a “steersman.” The idea of steering in cyberspace first appeared in the 1940s when a group of specialists representing the fields of biology, engineering, and the social sciences coined the term “cybernetics.” The new descriptor was shorthand for the study of communication and control systems in living beings and machines. The noun soon turned into an adjective — cybernetic — with a decidedly futuristic gloss and was quickly shortened to “cyber.” Starting in the 1960s, cyber was attached to everything: cybercubicle, cyberfriend, cyberlover, cybersnob, and cyborg, a combination of cybernetics and organisms. Cyborg described a machine made by man that had the capability of selfadapting to new environments. In 1982, William Gibson coined the term “cyberspace” in his novella “Burning Chrome.” Gibson’s creation has come to mean a space of virtual reality in which electronic communications occurs. With the explosion of the Internet, cyber seems to have taken on a negative connotation. We see it affixed most often to words such as “cyberwar,” “cyberattack,” “cybercrime,” “cyberterrorism,” and even “cyberbullying.” Perhaps its negative usage parallels the meteoric rise of nefarious digital activity which has be-

come a major concern around the globe.

Cybercrime concerns (military)

“The next Pearl Harbor could very well be a cyberattack that cripples our government, our security, and financial systems,” said Leon Panetta, the former CIA director. Panetta was reacting to the growing number of security breaches suffered by the U.S. military. In 2008, a flash drive with malicious code was plugged into a military laptop computer located in the Middle East. The code invaded the network at U.S. Central Command and extracted data that could be transferred to servers under foreign control. The next year, insurgents in Iraq and Afghanistan used a $26 commercialsoftware device to intercept live feeds transmitted by U.S. predator drones. In 2009-2010, Pfc. Bradley Manning passed sensitive data, including airstrike videos, war documents, and 250,000 diplomatic cables, to WikiLeaks, the international nonprofit that publishes secret, classified, and leaked information. In 2011, hackers breached the computer systems of major defense contractors, including Lockheed Martin, stealing terabytes of data on the F-35 fighter-jet program. And two years ago, Edward Snowden walked off with a trove of military documents that have embarrassed the federal government and exposed our national military plans.

Cybercrime concerns (commercial)

“Many executives are declaring cyber

as the risk that will define our generation,” said Dennis Chesley, global-riskconsulting leader for PwC, in a 2016 report titled “Turnaround and Transformation in Cybersecurity.” Chesley Chesley bases his conclusion on the rash of high-profile, hacking attacks on U.S. companies, such as retailers Home Depot and Target and health-care giants Anthem and Premera. The government also has suffered serious breaches, including the 4 million records of current and former government employees hacked at the Office of Personnel Management, the 3.65 million records stolen from the U.S. Postal Service, and the 21 million records stolen from the Social Security Administration. The PwC report goes on to say “… the increased use of data analytics, the digitization of business functions, and a blending of service offerings across industries have expanded the use of technologies and data that is creating more risk than ever before.” Corporate America’s vulnerability is perhaps best illustrated by noting that the country’s five largest financial institutions hold assets that total 56 percent of U.S. annual GDP. Compounding everybody’s concerns is the Internet of Things (IoT). The combination of Internet-connected devices, operational tools, and facilities — IoT — is

currently estimated at 13 billion devices. By 2020, estimates put the IoT at 30 billion to 50 billion connected devices. While most recognize the tremendous advantages of this rapid expansion, they also acknowledge the increased risk to both data security and privacy. The numerical basis of cyber-risk concern is spelled out clearly in the PwC report. The average number of security incidents rose 38 percent just between 2014 and 2015. While employees remain the most cited source of data compromise, cyber incidents attributed to “business partners” (vendors) climbed 22 percent over the same period. The theft of “hard” intellectual property rose 56 percent in 2015 compared to 2014. A 2014 IBM report identifies human error as a contributing factor in 95 percent of data breaches.

Cyber insurance

The recent rash of hacking attacks on U.S. companies has motivated insurers to substantially raise cyber premiums, cap payouts, and increase deductibles on those companies considered to be at high risk. The insurance industry’s reaction is another sign of the growing concern about cybercrime. Health-care companies that suffered a breach are facing premium increases that are triple the current rate. The average retailer that suffered a breach in the first half of 2015 saw a 32-percent increase in cyber premiums. SEE CYBERSECURITY, PAGE 17

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SUNY Poly professors win NSF funding for data analysis and encryption research BY ERIC REINHARDT ereinhardt@cnybj.com MARCY — The National Science Foundation (NSF) has awarded two professors at SUNY Polytechnic Institute (SUNY Poly) in Marcy funding totaling $371,000 for their ongoing research. Firas Khasawneh, assistant professor of mechanical engineering, will use $196,000 for research on finding ways to use “high-level” mathematics to make data analysis “more reliable,” SUNY Poly said in a news release issued April 25. The NSF also awarded Roopa Vishwanathan, assistant professor of computer science, a grant of $175,000 for research on automating proof construction and verification techniques for a new family of cryptosystems called “attribute-based cryptosystems.” Cryptosystems are comprised of “attribute-based encryption and signatures” that are useful in situations where a computer user must have the right credentials and “anonymity is required” to protect privacy, according to the school. “We are honored that the work of Drs. Vishwanathan and Khasawneh is being recognized for its potential to advance current understanding in the areas of mechanical engineering and computer science,” Alain Kaloyeros, president and CEO of SUNY Polytechnic Institute, said.

Khasawneh project

Khasawneh will use the grant for his project, “Collaborative Research: A Unified Framework for the Investigation of Time Series Using Topological Data Analysis.” Under his direction, the research aims to advance data analysis in three fields. The fields include time-series analysis, which involves using several methods to analyze data over time in order to obtain valuable information for use in predicting future outcomes. Another field is dynamical systems, or mathematical models that can explain physical movement, according to SUNY Poly. The third field is applied topology, which is a branch of mathematics that

investigates the shape of data. The findings of Khasawneh’s research will “lay the foundation” for improving current analytical tools and “advance understanding” in a number of applications related to both science and engineering, SUNY Poly said. “I am excited about the opportunity presented by this National Science Foundation award which will not only enable a greater ability to analyze complex data, but also empower graduate and undergraduate students who will take part in this critical research and pursue careers in the exciting, STEM-centered fields,” Khasawneh said in the SUNY Poly release. “Currently, intensive user expertise and input are essential for analyzing the data of dynamical systems. This makes the process of data analysis more of an art than a science and, consequently, more prone to errors. This proposal will help us investigate how to leverage high-level mathematics to make the process of data analysis more systematic and reliable.” STEM is short for science, technology, engineering, and mathematics.

Vishwanathan project

Vishwanathan will use the $175,000 NSF grant for her project, “CRII: SaTC: Automated Proof Construction and Verification for Attribute-based Cryptography.” It will lead to the design and development of a framework that can extend the current protocols utilized by computers around the world to maintain security for a variety of critical systems, such as for encrypted communications. By advancing this area of attributebased cryptography, Vishwanathan and her team want to take existing encryption tools “to the next level,” and will also explore cryptographic protocols in “high-level” languages such as C or Java, SUNY Poly said. Additionally, this research will support educational opportunities for SUNY Poly students who can work on advanced areas of cryptography to develop “indemand” industry skills, the school said.

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FOCUS: CYBERSECURITY

Quanterion Solutions ramps up its growth BY ADAM ROMBEL arombel@cnybj.com MARCY — Quanterion Solutions, Inc., a 16-year-old technology company based at Kunsela Hall on the SUNY Poly campus in Marcy, is on a roll. The firm is growing its contract business across several technical areas and planning for further growth where opportunities arise. “We’re having a good year. We have about 75 people [total] now. We picked up 13 [employees] in the last year — the bulk of them in the Utica–Rome area,” says Preston MacDiarmid, company president and founder. The firm employs 50 in the Mohawk Valley now. Quanterion — which serves the defense, commercial, health care, energy, and homeland-defense markets — is expecting to generate 15 percent revenue growth in 2016, he says. One of the company’s big sources of growth has been its contract to operate the Cyber Security and Information Systems Information Analysis Center (CSIAC) — a Department of Defense (DoD) center of excellence addressing cybersecurity,

software engineering, modeling and simulation, and knowledge management. “That’s led to hiring a lot of people in cybersecurity for the DoD contract,” says MacDiarmid. The firm is also generating work in research and development programs at the Air Force Research Laboratory (AFRL) in Rome under different contracts, says MacDiarmid.

The company president adds that Quanterion is “doing a lot of work” in the unmanned aircraft systems (UAS) field. “We are a partner with the NUAIR Alliance in a number of efforts, some funded by AFRL,” he notes. More growth could be on the way for Quanterion Solutions, as the firm has submitted several proposals for funding through the DoD’s Rapid Innovation Funds (RIF) program, providing funding for “innovative small businesses.” If successful, Quanterion could win

$3 million to $5 million per year in contracts, MacDiarmid says. The firm will probably find out in the fall if it has won the contracts, he adds. Quanterion Solutions is also ramping up its growth plans vis-a-vis its facilities. “One thing we’re looking forward to with SUNY Poly is to move into a new building just off the campus. It’s in the planning stages now. They refer to it as the Innovation Center I believe,” says MacDiarmid. Quanterion currently has about 6,000 square feet of space at its headquarters at Kunsela Hall and about 35 employees working there. “We’re kind of cramped here,” the company president notes. The firm will probably have about 10,000 square feet at the new SUNY Poly facility, which will take about 18 months or so to build. “We’ll have more space to have more laboratory facilities,” says MacDiarmid. In addition to its HQ at SUNY Poly, Quanterion also leases about 1,500 square feet of space at the Griffiss Institute in Rome, and has five employees working

Company Profile:

QUANTERION SOLUTIONS, INC. 100 Seymour Road Utica, NY 13502 (315) 732-0097/quanterion.com n  Year founded: 2000 n  Total Employees: 75 n  Mohawk Valley Employees: 50 n  Top Executive: Preston MacDiarmid, president and founder n  Certifications: ISO 9001 n  Markets Served: Defense, commercial, health care, transportation, energy, and homeland security markets n  Products & Services: Cybersecurity and information assurance, homeland defense and critical infrastructure protection, materials engineering, software development/engineering, IT, consulting on nanotechnology and unmanned aircraft systems.

on location at AFRL in Rome. The company has additional employees working at the Center for Advanced Systems and Engineering (CASE) on the Syracuse University campus and at sites in the Washington, D.C. area; North Carolina; and Albuquerque, New Mexico. Quanterion has about 20 employees in the latter location. n

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FOCUS: CYBERSECURITY

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Three Mohawk Valley–area highschool teams win prizes during AFRL Challenge Competition It was the 8th annual edition of this competitive STEM initiative BY JOURNAL STAFF news@cnybj.com ROME — The Air Force Research Laborator y (AFRL) Information Directorate, in partnership with the Griffiss Institute, recently hosted the 8th Annual Challenge Competition. The competition is an annual competitive STEM (Science, Technology, Engineering and Mathematics) initiative for local high-school students. The contest seeks to provide a more realistic view into the types of high-tech problems the nation is facing today, and how engineers and researchers go about solving them. The competition can perhaps be best described as “mental marathon,” according

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to a news release posted on the Griffiss Institute website. The contest was held during students’ school break, April 2529, at Griffiss Institute in Rome. Eight area high schools participated. The three winners of the 8th Annual 2016 AFRL Challenge Competition are: 1st Place: Anthony Salvati and Dakota Turk, Central Valley Academy 2nd Place: Stephen Cosco and Matthew Calogero, Westmoreland High School 3rd Place: Margaret Cummings and Kevin Lohr, Holy Cross Academy The winning teams were able to choose from available paid summer internships at AFRL, Griffiss Institute, and two iPad Pros. Salvati and Turk will be interning at AFRL this summer, while Cosco and Calogero will intern at Griffiss Institute. Cummings and Lohr received the new iPad Pros as their prize. This year’s challenge was developed by the Information Exploitation & Operations Division of AFRL. The eight teams received the challenge problem upon arrival at Griffiss Institute the first morning of the contest, and worked for four full days to solve it. AFRL engineers and scientists were on hand to answer questions about the challenge problem throughout the week, according to the news release. Many of the participating students found that it was the “first time they had ever had a problem to solve that encompasses what they learn in every academic area in school, from politics, to English, to math and science,” the release stated. “It gave many of the participants a new perspective on the field

of engineering and they got to learn a more about the work that takes place at the Air Force Research Laboratory Information Directorate, and Griffiss Institute.” On the final day of the competition week, the judges made their decisions, followed by a poster session, luncheon, and awards ceremony — with parents, friends, local dignitaries, and staff from local tech companies in attendance. The other five Mohawk Valley–area high schools that had teams participating in the competition were: Brookfield Central School, Frankfort-Schuyler Central School, New York Mills School, Oriskany Central School, and Thomas R. Proctor High School, according to the release. The judges for this year’s competition were:  Kevin Hanna, regional director of external affairs at event sponsor AT&T (also the keynote speaker at the awards luncheon)  Don Hanson, retired, former director at AFRL  Regan Johnson, director of operations at Griffiss Institute  Jeremy Tobias, software engineer at BAE Systems The Griffiss Institute says it was established in 2002, by New York State, as an independent 501(c)(3) corporation governed by a board of directors. The Griffiss Institute’s main role is to advocate and facilitate the cooperation of private industry, academia and government in “developing solutions to critical cyber security problems.” It also seeks to build upon technologies under development at the Air Force Research Lab to further strengthen U.S. security. 

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BY NORMAN POLTENSON npoltenson@cnybj.com ROME — “Make your lives extraordinary … be individuals,” John Keating, played by Robin Williams, says to his high-school students in the 1989 movie “Dead Poets Society.” “Carpe Diem,” he continues: “Seize the day.” Williams’ character inspired his students through unorthodox teaching methods: standing on a desk to look at life differently, ripping out the introduction to a poetry book which rated poetry by means of a mathematical formula, and even inviting students to create their own style of walking. Motivating U.S. students to understand and explore the power of their potential is a national priority. Last year, President Obama announced a $240 million initiative underwritten by the private sector to encourage youngsters to pursue STEM (science, technology, engineering, and math) fields. The initiative included a national competition to create media that inspires young people, a promise by 120 universities to train more than 20,000 engineers, and a CEO commitment to expand effective STEM programs to another 1.5 million students within the year. The president previously inaugurated a program

NORMAN POLTENSON/BUSINESS JOURNAL NEWS NETWORK

Project Fibonacci converts STEM into STEAM to prepare 100,000 STEM teachers over a decade. To date, his “Educate to Innovate” campaign has generated more than $1 billion in financial and in-kind support for STEM programs.

STEAM

“STEM is very important, but we need to tie science and the arts together,” asserts Andrew (Andy) Drozd, president and chief scientist at ANDRO Computational Solutions, LLC. “Everyone is focused on innovation to transform our economy in the 21st century. To accomplish this, we need to add an ‘A’ to STEM for art, creating the … [acronym] STEAM. I think back on what is the first great period of scientific discovery — the Renaissance (13001600). Da Vinci was a painter, scientist, and inventor; Michelangelo was a sculptor, painter, and architect; and Copernicus was a mathematician, astronomer, physician, economist, and jurist, just to name a few. These men all blended science with art and design. Their example is my motivation for launching Project Fibonacci.” Project Fibonacci STEAM Youth Conference, conceived by Drozd, is scheduled from July 31 to Aug. 6 at the Beeches Professional Campus in Rome. Drozd has hired Daniel Kostelec as

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Andy Drozd, center, and Dan Kostelec, second from left, lead a team at ANDRO Computational Solutions, which created the first Mohawk Valley Youth STEAM Conference, called Project Fibonacci, to inspire students to find their passion in blending the arts and science. The weeklong conference kicks off July 31 at The Beeches with an anticipated attendance of 250-300 students.

the STEAM outreach coordinator. “This is a first-of-its-kind event in the Mohawk Valley,” says Kostelec. “We’re reaching out to high schools, colleges, universities, government, and business to create a unique opportunity for students to discover their passion, explore a career, and realize their

dreams. The program includes a wide variety of topics: the cosmos, neuroscience, the human body, art, graphics, photography, music, math, engineering, and science.” Kostelec’s goal is to show the students SEE FIBONACCI, PAGE 24

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MOHAWK VALLEY NEXTGEN I MOHAWK VALLEY BUSINESS JOURNAL I MAY 23, 2016

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Air Force Research Lab in Rome awards PAR Government $3.4 million cyber-defense contract BY JOURNAL STAFF news@cnybj.com

We are a forum for the exchange of ideas, solutions, and technology for managing the risk of cybercrime, economic crime, and fraud. • Cutting-edge academic programs in criminal justice, economic crime management, and cyber security • Development of best-in-class education, research, and future leaders • Resource for innovative solutions for corporate, private, government, and law enforcement organizations

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ROME — Rome Lab recently awarded PAR Government Systems Corp. a multiyear, $3.4 million contract for cyber-defense work. Rome Lab is known officially as the Air Force Research Laboratory (AFRL) Information Directorate. PAR Government is a subsidiary of PAR Technology Corp. (NYSE: PAR). Headquartered in Rome, PAR Government provides intelligence, surveillance, and reconnaissance services to the U.S. Department of Defense, U.S. government agencies, and private industry.

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PAR Technology, based in New Hartford, also provides technology products for restaurants and retailers. The three-and-a-half year AFRL contract focuses on an “Integrated Information Management System Cyber Technology Maturation Framework,” PAR Government said in a news release issued March 1. Under the contract, PAR Government seeks to develop and sustain a cybersystems “testbed.” The company said it will employ, test,

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evaluate, and transition new cyber-defense operating concepts and AFRL Information Directorate-developed cyber technology and products. PAR Government’s intelligence, surveillance, and reconnaissance (ISR) sector will perform the work. “PAR Government will draw upon our staff’s in-depth experience and reputation in integrated information management and assurance to assist AFRL with their mission,” Matt Cicchinelli, president of PAR Government, said in the release. “We look forward to our continuing and expanding partnership with the Air Force Research Laboratory in support of this important program.” 

he Mohawk Valley Community College (MVCC) announced that it is offering a free course this summer for rising juniors and seniors in Oneida and Madison county high schools that will “accelerate their entry into the cybersecurity and information technology fields.” The five-week Cyber Accelerator Bridge Program is scheduled for 9 a.m. to noon on Tuesdays through Thursdays, July 5-Aug. 4. It will cover basic networking, the assessment and handling of security risks, hardware components, and basic computer troubleshooting, according to an MVCC news

release. The course is geared toward high-school students who have basic computing skills and are seeking broader knowledge in the field. Upon successfully completing the course, students will receive three college credits and have the knowledge to achieve the CompTIA Strata IT Fundamentals professional certification, the release stated. The Strata exam is a “stepping stone” to the CompTIA Network+ and Security+ professional certification exams that validate the necessary skills for employment in the cybersecurity field. The college said it is accepting applications for the course until June 24. Those seeking more information can contact Jean Leandre at MVCC at (315) 792-5424.

SOLUTIONS START HERE Quanterion operates the following technical centers of excellence: Defense Threat Reduction Information Analysis Center

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MAY 23, 2016 I MOHAWK VALLEY BUSINESS JOURNAL I MOHAWK VALLEY NEXTGEN

Planning for prosperity in the Mohawk Valley BY NORMAN POLTENSON npoltenson@cnybj.com

Optimism

There is a feeling of optimism in the Mohawk Valley. After decades of watching manufacturers close their doors and move out of the area, residents now see the beginnings of a new economy as corporations relocate to the area to be close to the new high-tech economy that is emerging. They also see local companies and institutions expanding here to take advantage of the opportunities. “Nanotechnology,” “UAS,” and “cybersecurity” are three buzzwords that pop up in every conversation about the high-tech sectors driving this new economy in the Mohawk Valley. It may seem serendipitous that these three growth sectors have converged, but the reality is they are the result of community leadership crafting a vision of the future and then developing and implementing a plan. Utica College saw a need in 1988 and created a first-in-the-nation cybercrime program. Nearly 20 years ago, Mohawk Valley EDGE took the lead in responding to an inquiry from New York State about future sites for computer-chip fabrication. The NUAIR Alliance was formed to position the region as an innovation corridor for the development of unmanned-aircraft systems, leading to a new designation as one of only six test-sites in the country for unmanned aircraft systems (UAS).

The role of New York State

The Mohawk Valley’s efforts have been supported by New York State, which began to focus two decades ago on building a thriving economy based on high-tech industries. In his “2015 Opportunity Agenda,” Gov. Andrew Cuomo updated the state’s plan to restore economic opportunity by offering challenge grants to SUNY and CUNY to strengthen their academic programs while spurring economic growth. He doubled the state’s venture-capital fund and directed New York’s community colleges to better align their academic programs with the Regional Economic Development Councils he established in 2011. The governor also focused on Upstate to stimulate the economy. In the latest round of consolidatedfunding applications, the Mohawk Valley was awarded a “Top Performer” grant of $100.3 million to fund 92 projects. Creating the vision for the new economy is the role of dreamers who can picture what the future could be. The vision is then converted to a statistical analysis that assigns values to designated areas. This process reminds me of my 53 years in business watching merger-and-acquisition deals (M&A) where everything always looks good on paper and then often falls apart during implementation. The most difficult part about M&A is understanding different corporate cultures and values that motivate employees to support change, and being sure to involve all of the stakeholders in the process. Failure to do so is the main reason why so many deals fail. The same is true with communities faced with a major change. Trying to integrate disparate groups within the community, each with its own agenda, to join together for the commonweal is like herding cats. (On second thought, cats are easier to herd.)

Demographics

The first task in devising a plan for

the new economy was to understand the demographics of the immediate region. Herkimer and Oneida counties are strategically located in the Northeast within a day’s drive of 100 million people. The region contains about 300,000 residents living in 117,222 households. The median home cost is just under $92,000, compared to a national average of $192,400. The median income of $42,780 is 18 percent below the national average. The cost of living in the Mohawk Valley is also lower than the national average. According to the EPA, the area’s water quality is 160 percent above the national average. The largest business, with 4,500 employees, is in the hospitality industry — Oneida Nation Enterprises and its Turning Stone Resort Casino. The percentage of MV–area jobs measured by the number of employees per industry is: education and health services, 18.5 percent; financial and insurance, 5.9; government, 25.0; information technology, 2.6; leisure and hospitality, 6.5; manufacturing, 9.7; natural resources, mining, and construction, 2.4; professional services 7.0; retail and other, 4.9; and trade, transportation, and utilities, 17.4 percent. The region’s gender makeup is 52 percent male and 48 percent female. Over 90 percent of the population is white, with Native Americans, Asians, blacks, Latinos, and others comprising the other nearly 10 percent. In the area of education, 36 percent have high-school diplomas while another 32 percent have some college education. The demographics by age reflect the following: 23 percent is under 18; 9 percent

is 18-24; 26 percent is 25-44; 26 percent is 45-64; and 15 percent is over 65. When compared to other upstate cities, Utica has a foreign-born population that comprises 17.6 percent of the population compared with an average of 11.1 percent for the other cities. The region suffers from a high poverty level coupled with a limited availability of jobs and limited public transportation. According to Anthony Colon, founder and president of Techno-Logic Solutions, Inc. located in Utica, “[t]his is a very diverse community. [For example, t]he Utica–city school district has 46 different languages spoken, and in 25 percent of the Utica homes English is spoken as a second language.”

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Vision 2020

Aware of the tremendous growth potential and ever mindful of the region’s demographics, Anthony Picente, Jr., the Oneida County executive, reached out to the community in 2013 with a plan to ensure that the growth of the new economy would be sustained. He called the plan a bridge to the future and shared his blueprint to create a world-class workforce, enhanced housing, and accessible job opportunities for all. “We have the resources for building that bridge — our people, our institutions, our environment, and our character,” Picente said. He called the plan “Vision 2020” and charged three committees to create the strategies to bring positive change. (The county executive’s plan was focused on Oneida County, SEE PROSPERITY, PAGE 16

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PROSPERITY: The need to respond to the coming demand for a broad range of skilled workers was the first priority

but he sees expanding it region-wide.) More than 50 volunteers responded to Picente’s challenge and joined the committees to create the strategies that would align the resources with the needs. The county executive proposed in Oct. 2014 adding $5 million over five years to future Oneida County budgets to support the needed incentives, infrastructure improvements, education, and quality of life outlined in the Vision 2020 plan. The county legislature unanimously approved the measure. Picente To ensure community involvement, he reached out to all of the area’s K-12 schools, its institutions of higher education, business and industry, government agencies, workforce systems partners, economic-development agencies, and community groups to join in a unified collaboration to push the plan forward.

The three committees Education and Workforce

The need to respond to the coming demand for a broad range of skilled workers trained to address the needs of the new high-tech sectors was the first priority. The education and workforce committee focused on leveraging the strengths of the local schools and institutions of higher learning to create a cradle-to-career approach. Randy VanWagoner, president of Mohawk Valley Community College (MVCC) and a co-chair of the Vision 2020 initiative, explained the challenge. The world is changing faster than any of us can comprehend,” he said. “… [T]he future is here. Our role … is to get ahead of the future and plan a curriculum that meets our mission … In an increasingly competitive world, America’s economic strength depends on the education and skills of its workforce. In … [fewer than] five years from now, 35 percent of job openings will require at least a bachelor’s degree and another 30 percent will require an associate’s degree, … [because the pace of new] jobs requiring an associate’s degree are projected to grow almost twice as fast as those requiring no college education. That means that America’s 1,100 community colleges, which currently enroll more than 6 million students, will need to accommodate another 5 million.” VanWagoner says that while the curriculum has expanded dramatically since the college was founded in 1946, one thing hasn’t changed. “The college works closely

with area businesses on worksite-education programs that build essential skills. We design training that is relevant to the local market, including machine shops, the aviation industry, and the health-care community, [industries] that will likely lead to employment and careers [for our graduates]. We are also designing and implementing courses for emerging industries: nanotechnology, which fits into our electronics and semiconductor curriculum; unmanned-aircraft systems (UAS), which is an extension of our aviation-maintenance curriculum; and cybersecurity, an area where MVCC collaborates with Utica College and SUNY Polytechnic Institute (SUNY Poly).” MVCC currently enrolls more than 7,000 students, most of whom commute to the campuses in Utica and Rome and of whom 80 percent works while attending school. The college’s latest project is to develop an advanced-manufacturing institute on the Utica Campus, which will include a cleanroom for nanotechnology programs and a lab for mechatronics, a multidisciplinary field of engineering. The institute would expand the college’s capacity in semiconductor manufacturing, HVAC (nanotechnology focus), robotics, 3D fabrication, and more. Howard Mettelman, district superintendent of BOCES for Oneida, Herkimer, and Madison Counties (OHM BOCES) is the chair of the education and training committee. His committee is charged with ensuring that 100 percent of the 34,000 primary- and secondary-students in Oneida County are ready for the world of work. That means working with K-12 students and area businesses as well as coordinating with the local colleges to strengthen opportunities for college and career development. Examples of the committee action plan include recommendations to create more internships, increase dual-credit offerings, update program-transfer agreements, and eliminate barriers to post-secondary programs. Additional recommendations are identifying the jobs that need to be filled, the types of jobs, earning potentials, the number of positions projected to be available, and the education/training requirements. The ultimate goal is to create a single source to collect and disseminate this information. To guarantee an opportunity for everyone, OHM BOCES has instituted a novel educational path called “Pathways in Technology Early College High School” (P-TECH). The program, set in an experiential-learning environment, offers at-risk students the opportunity to earn a high-school diploma and an associate’s degree at no

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cost to the student or his/her family. Upon completion, the students are given priority consideration for employment from area corporations that partner with P-TECH. “This program is an example of really thinking out of the box,” states Mettleman, “where we are ready to change traditional patterns of student enrollment, staffing, and scheduling. The [Mohawk] Valley is experiencing a renaissance of high-tech manufacturing, and our job is to align the resources to meet the needs of the students and to provide skilled workers for the new industries.” The curriculum was developed through the combined efforts of educators and local businesses, including Indium, ConMed, Trenton Technology, Cryo Pure Corp., Rome Lab, and JH Rhodes Company, Inc. P-TECH is intended to be an incubator for innovation that is scalable. “[This is] … a model program, which the area school districts can adopt,” the superintendent continues. “A key strength of this program is it reliance on public-private partnerships. The model is built on the concept of the stability of a three-legged stool: the school district, the college, and employers. The employers are in high-growth industries and bring their skills and real-world experience to the program. This is a major commitment for our company [partners].” New York State granted $2.8 million over five years to support the local P-TECH program.

Housing

The housing committee conducted a thorough assessment of the existing realestate market, labor force, and other related data before developing the housing strategy. The members also studied data gathered from other communities that have seen a significant increase in their workforce as a result of chip manufacturing. They concluded that Oneida County would benefit from the development of contemporary, rental/lease properties, such as singlefamily/attached and zero-lot-line housing; townhouses; condominiums; traditional apartments; and urban-loft apartments. The committee recommended that local governments modify their local, land-use ordinances to accommodate non-traditional, housing units and modify tax levies on non-residential properties that are converted to a mix of residential and commercial uses. Another recommendation was aimed at the Oneida County IDA to create a standard policy that provided payment-in-lieu-of-tax agreements along with sales-tax exemptions and mortgage-recording-tax exemptions. The committee’s final recommendation was to work

Continued from page 15

with the state and other financing entities to identify creative financing methods that would encourage private-sector developers to respond to the changing needs of the new workforce.

Access and opportunities

The access-and-opportunity committee, charged with assuring that everyone in the community would have equal access to the forthcoming economic opportunities, first wrestled with defining “diversity.” The committee concluded that diversity would mean “underrepresented populations,” defined by ethnicity, linguistics, socio-economic status, religion, disability, age, or educational level. To enhance their overall success, these underrepresented groups needed access to education, jobs, health care, and housing, to name some key opportunities. The committee recommended creating a team of jobopportunity mentors, who would increase awareness of the emerging employment opportunities and help area residents connect with workforce-development services. They also recommended establishing a hub of three to five organizations to serve as centers to provide information referral services both for existing and startup companies. Another recommendation was to promote the benefits of being registered as a minority/woman-business enterprise or a disability enterprise. A key tactic to support the committee’s goals was the creation of a central database of available opportunities and information that was both user-friendly and translated into multiple languages. While the committee wanted to ensure access for those who were not conversant in English by listing all interpreter resources, the members encouraged more availability of English-as-a-Second Language courses.

SUNY Polytechnic Institute

The SUNY Institute of Technology (SUNYIT) was established in 1966 as an upper-division college at Herkimer/Utica/ Rome. In 1987, the school occupied its Marcy campus just north of Utica. SUNYIT joined in 2014 with the College of Nanoscale Science and Engineering, formerly a component of the University at Albany, to form SUNY Polytechnic Institute, a public-research university. The merger created five colleges within SUNY Poly, including the College of Arts & Sciences, the College of Engineering, the College of Nanoscale Engineering, and the College of Nanoscale Science. The Marcy Campus currently enrolls approximately 3,000 students. The SEE PROSPERITY, PAGE 22


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CYBERSECURITY: Today the Mohawk Valley is America’s epicenter for thwarting cyberattacks In a filing, Target stated that it expected to recover just $90 million of the $264 million spent on its 2013 breach. Home Depot reported that it expected to recover $100 million toward $232 million in expenses from its 2014 breach. Because of the spate of cyber breaches and corporate concern, according to PwC, the cyber-insurance market is projected to grow to $7.5 billion by 2020, three times its current size.

Cybercrime countermeasures

Motivated by the rising number of cyberattacks, the corporate, military, and governmental focus is on prevention and detection methods. PwC’s Chesley says that “[A]s a result, businesses are taking an enterprise-wide, business-oriented view of this important risk area.” Business leaders are rethinking their cybersecurity practices and focusing on innovative technologies to reduce risk and improve business performance, by linking cloud-based cybersecurity tools, big-data analytics, and advanced authentication. (International Data Corp. projects that spending on cloud computing will reach $70 billion this year.) One sure sign of how seriously cyberattacks are viewed by business is the 24 percent average increase in 2015 information-security budgets, according to the PwC report. The military and government are also increasing their investments in cybersecurity and joining corporations in collaborating between the public and private sectors. This year, President Barack Obama signed an executive order encouraging such collaboration in order to share information, intelligence, and specific threats. Other countermeasures include focusing on personnel education to encourage compliance with established procedures and hiring a top-information security officer with expertise not only in cybersecurity but also in risk-management, corporate governance, and overall business objectives. The chief-security information officer should be a C-level executive, who regularly delivers updates to a corporate board of directors.

Top cybersecurity threats in 2016

Hacker techniques seem to be bolder and more sophisticated each year. One growing cybercrime trend in 2016 is extortion. Ever since Sony Corp. was hacked in 2014, high-tech extortionists have increased their activity. The digital shakedown has usually involved locking access to the victim’s computers until a ransom is paid. In the Sony case, the cyber attackers threatened to release proprietary infor-

mation to the public, thus embarrassing the company. In 2015, Ashley Madison, a web site designed to arrange affairs between married individuals, was hacked, resulting in 32 million members of the site seeing their personal information posted online. Ashley Madison’s parent company subsequently offered $500,000 for information leading to the capture of the culprit. Extortionist hackers also penetrated InvestBank in the United Arab Emirates, resulting in the exposure of account information. Of greater concern is the trend to change or manipulate computer data. James Clapper, director of national intelligence, recently told Congress his greatest nightmare was not deleted or the release of stolen data; rather, he feared the consequences of not being able to believe the stored data. Mike Rogers, head of the NSA and U.S. Cyber Command agrees. “… [w] hat happens if someone gets in the system and starts manipulating and changing data, to the point where now as an operator, you no longer believe what you are seeing in your system? Compounding this concern is that data sabotage is very difficult to detect. One need only picture hackers manipulating the data of stocktrading systems, banks and other financial institutions, or the integrity of weapons systems to comprehend the implications of data manipulation. Other cybersecurity threats in 2016 include attacks on credit-card chip-andpin innovations and the rise of the IoT “zombie army” known as botnets. The explosive growth of IoT has concomitantly attracted hackers to penetrate connected devices including connected cars, medical devices, and even skateboards and Barbie dolls. Hackers are increasingly targeting IoT devices to infect them with malicious software, thus creating a controlled group without the owner’s knowledge that can transmit the hacked data to other digital devices on the Internet. Botnets are most often used to produce spam or DDoS, the distributed denial of service. Botnets-forhire are readily available from various sources and a full-service attack can cost as little as $5 per hour or $38 for a monthly plan. And finally, there is the current push to create a backdoor to encryption, which governments at all levels want to use for surveillance. The fundamental question is how do you control who goes through a backdoor? The battle between the FBI and Apple is only the beginning. How this plays out will have a major impact on

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Mohawk Valley cyber profile

Today the Mohawk Valley is America’s epicenter for thwarting cyberattacks. It all began in 1942 when the U.S. Air Force opened the Rome Air Depot to build Norden bombsights and test and rebuild large airplane engines. The Depot was renamed the Griffiss Air Force Base in 1948, and two years later the Air Force established the Air Force Electronics Center on the base. The Rome Air Development Center (RADC) officially opened in 1951as the U.S. Air Force’s applied-research, development, and test center for electronic air-ground systems in detection, control, identification and countermeasures, navigation, communications, data-transmission systems, associated components, and related automatic-flight equipment.

AFRL

RADC was re-designated the Rome Laboratory in 1990, and in 1997 the Lab became part of the Air Force Research Laboratory (AFRL). Its mission was and continues to be exploring, prototyping, and demonstrating high-impact, game-changing technologies that enable the Air Force and the nation to maintain its superior technical edge. The role of AFRL, designated in the Mohawk Valley as the Air Force Research Laboratory/Rome Research Site, is to lead the Air Force in the areas of com-

Continued from page 9

mand, control, communications, computers, and intelligence, plus the areas of cyber science, technology, research, and development. AFRL/Rome must be capable of processing mountains of raw data and intelligence into actionable information. To achieve this, the directorate has effected strategic collaborations by concluding educational partnership agreements with more than 150 universities and cooperative research-and-development agreements with more than 70 firms, creating in the process a critical mass of both national and locally grown defense contractors. AFRL/Rome also embeds some of its researchers at customer sites to understand the issues. Most importantly, AFRL/Rome has attracted a team of world-class experts located in a state-of-the-art research facility and supported by an annual budget that exceeds $1 billion.

Griffiss Institute

In 2002, the New York State created the Griffiss Institute (GI) as an independent 501 (c)(3) not-for-profit corporation. The purpose was to advocate and facilitate the cooperation of private industry, academia, and government in developing solutions to critical cybersecurity problems. GI also had a parallel role: provide an environment that supported the growth of technology and new business opportunities in the private sector. The institute, through partnership SEE CYBERSECURITY, PAGE 23

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THE LIST

MOHAWK VALLEY CHAMBERS OF COMMERCE Ranked by No. of Members Rank

Name Address Phone/Website

No. of Board Members Members Paid Staff

Sample of Membership Benefits

Executive Director or Top Executive

Year Estab.

1.

Greater Utica Chamber of Commerce 520 Seneca St. Utica, NY 13502 (315) 724-3151/ greateruticachamber.org

708

19 4

informational seminars, energy/cost-reduction program, Michael B. Morrill, Chairman of the health/dental ins. products, advertising & promotional Board of Directors services, referrals for members, networking opportunities, Meghan Fraser McGrogan, business advocacy Executive Director

1896

2.

Rome Area Chamber of Commerce 139 W. Dominick St. Rome, NY 13440 (315) 337-1700/ RomeChamber.com

600

26 3

marketing & business promotions, workforce development in schools, professional development in the workplace, legislative action, medical & dental insurance plans

1912

3.

Herkimer County Chamber of Commerce 420 E. German St. Herkimer, NY 13350 (315) 866-7820/ herkimercountychamber.com

450

21 2

member referral, web listing, networking and advertising John J. Scarano, Executive Director opportunities, voice of business, seminars, business recognition, phone app, networking events, monthly newsletter, weekly eblast,

1968

4.

Boonville Area Chamber of Commerce 122 Main St. Boonville, NY 13309 (315) 942-5112/ boonvillechamber.com

155

7 1

"Best of Boonville" promotion, Fall Arts Festival, village Christmas program, gift certificates, website advertising, business promotion, tourist information

Deniese Haskins, President

1956

5.

Greater Oneida Chamber of Commerce 136 Lenox Ave. Oneida, NY 13421 (315) 363-4300/ oneidachamberny.org

154

15 1

advertising, networking, website, annual events, high school scholarship, insurance referrals, newsletter, member-to-member benefits

Royale Scuderi, Executive Director

1893

6.

Clinton Chamber of Commerce 21 West Park Row Clinton, NY 13323 (315) 853-1735/ clintonnychamber.org

140

13 1

health insurance, farmers market, clean-up Clinton, Shopper Stroll, youth scholarships, art & music festival, Summer Stroll, ART Rocks

Jackie Walters, Executive Director

1950

7.

Trenton Area Chamber of Commerce P.O. Box 311 Barneveld, NY 13304 trentonchamber.com

130

10 0

annual endowment award, yearly member brochure, website with member listing/links, affiliated with Adirondack Foothills Visitor Information Center, healthinsurance option

Debby Leiker, President

1991

8.

Camden Area Chamber of Commerce 90 Main St. Camden, NY 13316 (315) 245-5000/ camdennychamber.com

120

14 2

annual member business directory, website, promotion of community events, calendar of events, networking, scholarships, gift certificate program

Barbara Crist, President

1957

9.

New Hartford Chamber of Commerce P.O. Box 372 New Hartford, NY 13413 (315) 735-1974/ newhartfordchamber.com

108

6 0

fostering economic vitality and quality of life in New Hartford

Mark Turnbull, President

1974

Kuyahoora Valley Chamber of Commerce P.O. Box 5 Newport, NY 13416 (315) 826-7390/ kuyahooravalley.net

65

10.

Bill Guglielmo, President

Research by Vance Marriner vmarriner@cnybj.com (315) 579-3911 Twitter: @cnybjresearch

ABOUT THE LIST

Information was provided by representatives of listed organizations and their websites. Other groups may have been eligible but did not respond to our requests for information. Organizations had to complete the survey by the deadline to be included on the list. While The Business Journal strives to print accurate information, it is not possible to independently verify all data submitted. We reserve the right to edit entries or delete categories for space considerations. This list includes organizations in Herkimer, Madison, and Oneida counties.

NEED A COPY OF A LIST? Electronic versions of all of our lists, with additional fields of information and survey contacts, are available for purchase at our website: cnybj.com/ListsResearch.aspx

WANT TO BE ON THE LIST? 4 0

tourism, support local business, creatively build new economic opportunities, encourage new business, monthly meetings, membership guide

Melissa McCredie, President

2006

If your company would like to be considered for next year’s list, or another list, please email topranks@cnybj.com


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MAY 23, 2016 I MOHAWK VALLEY BUSINESS JOURNAL I MOHAWK VALLEY NEXTGEN

BRIDGE: DiMeo points out that the Mohawk Valley offers an array of features that are attractive to any business where it already has density. “The Valley has particular strengths in industrial sectors such as aviation/aerospace, finance/ insurance, advanced manufacturing, IT/ cybersecurity, electro/micro-electric manufacturing, and biosciences,” notes the EDGE president. “We want to build on our long history of technology development and innovation. Currently, there are three high-tech areas that are growing very rapidly and will have a dramatic impact on our economic development: nanotechnology, unmanned-aerial systems (UAS), and cybersecurity. “In nanotechnology, New York is today a global leader by forging relationships whereby the state makes a large capital investment in infrastructure and research and corporations invest in tools, workforce, and intellectual property,” notes DiMeo. “In effect, the government takes on the role of enabler. A decade of success at the Malta nano site [in Saratoga County] is now leveraged at our own Marcy Nanocenter site where ams, A.G. of Austria [has broken ground] on the first semiconductor fab[rication] plant. Locating the 300 mm facility at Marcy will attract similar semiconductor firms looking to add capacity with projected growth in memory, flash, and sensors. It’s just natural that industries love cluster.” UAS is another high-tech area that is receiving a lot of attention. “The FAA designated Griffiss as a test site, one of only six nationwide, to develop a sense-

and-avoid system to permit drone flight,” continues DiMeo. “Because of the FAA designation of Griffiss, some companies have already moved to Griffiss, and local companies are investing here to capitalize on a technology that will be utilized in a number of areas, starting with agriculture and public safety. The region has a long history of developing sensors, including companies such as Syracuse Research Corp. (SRC), Saab Sensis, Lockheed, and, of course, AFRL. The third high-tech growth industry — cybersecurity — “… has been a focus in the Valley since the 1980s, when AFRL did groundbreaking work and Utica College inaugurated its first course in the subject,” notes DiMeo. “Initially, the focus was strictly on DoD and military concerns about national security. In the last decade, the private sector has taken notice of the numerous security breaches of corporate data and now spends billions to protect its systems. The demand for improved [cyber]security is endless, because as soon as organizations put up a new defense, hackers figure out how to penetrate it.”

Mohawk Valley features

DiMeo points out that the Mohawk Valley offers an array of features that are attractive to any business. “We’re strategically located in the Northeast,” he emphasizes, “within a one-day drive of nearly half of the U.S. population. Site se-

lection is … [enhanced] with zoned sites and buildings that have immediate development potential. Both the public and private sectors offer financial incentives to assist businesses, and our region is noted for its collaboration among industry, the educational system, and government. The infrastructure here is top-notch, including high-speed telecommunications delivery and world-class research facilities. Aligning our educational resources with industry needs guarantees a trained workforce capable of supporting high-tech industries. The Valley also … [boasts] a labor force which has a strong work ethic and a lifestyle second to none.” EDGE’s primary geography covers 2,670 square miles with a population of about 300,000 people. The 117,000 households have a median income of $43,000; the high-tech sectors typically generate a higher income. The workforce includes about 240,000 individuals where 86 percent have at least a highschool degree. EDGE is located in a single office at the Griffiss Business & Technology Park. The not-for-profit company was incorporated in 1997 as a 501(c)(3) and operates currently with a staff of 15. The annual operating budget is approximately $2 million. The original development company — Oneida County Industrial Development Corp. — was founded in 1963. While EDGE serves Oneida and Herkimer counties, nothing prohibits the agency from helping other

NANOTECHNOLOGY: The future of nano is bright. lighting, MEMS (micro-electrical-mechanical systems), bio/medical, IT, and big data.”

Quad C

A half-mile from the Marcy manufacturing site stands the Computer Chip Commercialization Center (Quad C), constructed as a research lab to study chip production and packaging. “Phase I of the complex, which opened in 2015, is a 253,000 square-foot structure that will provide leading-edge R&D to facilitate the commercialization of nanotechnology and nanoelectronics innovation, especially 3D packaging,” declares Robert E. Geer, senior VP and COO of SUNY Poly. “This packaging requires multi-level, wafer-stacking of computer chips to reduce power consumption and improve bandwidth. The process demands specialized design and machinery to line up the dies and attach them, all of which has to be done in a cleanroom.”

Quad C’s first tenant is The New York Power Electronics Manufacturing Consortium led by GE. The consortium has announced a $500-million research investment over five years in silicon-carbide, a breakthrough material expected to set new standards of chip efficiency and performance. “Quad C cost $125 million to construct the first of three phases and is projected to employ 300 people,” continues Geer. “The facility includes a 56,000-square-foot cleanroom and has an annual operating budget of $500 million. When fully built out, the Center will employ 1,500 with an annual payroll of $136 million. [In summary,] the benefits of Nano Utica will be widespread. SUNY Poly has an international reputation for its degreegranting in nanoscience, nanoengineering, nano bioscience, and nano economics … Mohawk Valley Community College should see more demand for its two-year degree in semiconductor manufacturing

Continued from page 1

counties.

The future

“After half a century of economic upheaval that has seen the exodus of jobs, people, and wealth from the region,” stresses DiMeo, “the Mohawk Valley is now on the threshold of an economic Renaissance that will transform the region for decades to come. We’re creating a vibrant future by promoting a diverse, integrated, and dynamic economy that capitalizes on technology and innovation. Competing in a global economy demands substantial capital investments in research, machinery, infrastructure, and facilities, but it also requires investing in and fostering an educated workforce … [imbued] with an entrepreneurial spirit. The elements are in place for an economic transformation that will bring regional prosperity for all, resuscitate our urban centers, and preserve our quality of life. I keep pinching myself to remind me that change is really happening and that our best days lie ahead.” The same spirit of innovation and persistence that drove New Yorkers in the early 19th century is now driving the residents of the Mohawk Valley. Building the Erie Canal transformed the region into an economic powerhouse. Building a hightech economy will be no less transformative. The Valley’s leadership has built a solid bridge to the new economy; now it’s time to cross it.  Continued from page 2

technology. I expect the job market will expand substantially, creating 5,000 jobs at the Marcy Center and another 15,000 indirect jobs in support.”

Nano’s future

The future of nano is bright. The “Internet of Things” market expects that 50 billion devices will be connected to the Internet by 2020. The global demand for more semiconductors is clearly driving manufacturers to expand. Chip fabricators are plowing more than 20 percent of their revenue into research in order to guarantee continuous productivity. Not resting on its laurels, New York is also taking the lead by creating a consortium with the Israelis to develop and produce standard-calibration wafers for use with 300-mm and the forthcoming 450-mm metrology and process tools. Since Gordon Moore proclaimed his eponymous law in 1965, that the number of transistors

The next generation of technology meets the next generation of communications.

M A R K E T I N G / P U B L I C R E L AT I O N S / S TA K E H O L D E R E N G A G E M E N T paigegroup.com 315.733.2313 info@paigegroup.com

CNYBJ.COM

per-square-inch doubles every 12 to 18 months while the price halves, semiconductor productivity has risen at an annual compounded rate of 20 to 25 percent. The Mohawk Valley is well-positioned to leverage the SUNY Poly global brand in education and R&D with its world-class manufacturing site at Marcy. The Mohawk Valley has figured out how many angels can dance on the head of a pin. It’s no longer millions; it’s billions. The introduction of the new 450mm wafer standard followed by the move to its production should ensure that the number of dancing angels will continue to increase well into the future, even if the nano scientists have to instruct the angels to dance quickly and in the same direction. The Mohawk Valley is now a nano hub, and its new unit of measure is the nanometer, whether measuring chips or the Valley’s forthcoming prosperity. 


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MOHAWK VALLEY NEXTGEN I MOHAWK VALLEY BUSINESS JOURNAL I MAY 23, 2016

CNYBJ.COM

THE LIST

MOHAWK VALLEY TECHNOLOGY-BASED COMPANIES Ranked by No. of MV Employees Name Address Phone/Website

Rank

% Services MV % Hardware Employees % Sofware

Products and Services

Top Local Executive

Year Estab.

420

0% 100% 0%

communication fiber-optic connectors, cable and test equipment; safety relays, injection molded plastic components, CNC machining, sheet metal fabrication

Frank Giotto, President, CEO Kirk Donley, SVP of Sales Susan Grabinski, SVP of Accounting & CFO Mark Cushman, VP Marketing

1985

Indium Corporation 34 Robinson Road Clinton, NY 13323 (315) 853-4900/indium.com

300

100% 0% 0%

materials manufacturer and supplier to the global electronics, semiconductor, thermal management, thinfilm, and solar markets

Gregory P. Evans, President & CEO Mike McKenna, CFO Ross Berntson, VP SM Ning-Cheng Lee, VP Technology

1934

3.

Quanterion Solutions Incorporated 100 Seymour Road Utica, NY 13502 (315) 732-0097/http://quanterion.com

50

80% 0% 20%

R&D for government and industry, including cyber security, software engineering, modeling & simulation engineering and reliability/maintainability/quality. Consulting and applications include nano, UAV/UAS, Technical Centers of Excellence and Affordability/Asset Management.

Preston MacDiarmid, President

2000

4.

CCNY TECH 11206 Cosby Manor Road Utica, NY 13502 (315) 724-2209/ccnytech.com

25

20% 60% 20%

products include Cisco Systems, Dell, Hewlett Packard, Microsoft, Sonic Wall, and more. Services include new & refurbished technology hardware consulting, document management, IT staffing support, data recovery, network support, electronic waste recycling

Scott Fluty, CEO & President

1988

5.

Capraro Technologies, Inc. 401 Herkimer Road Utica, NY 13502 (315) 733-0854/caprarotechnologies.com

13

65% 20% 15%

business IT, software development, hosting & colocation services, disaster-recovery planning & implementation, Information Assurance/Cybercrime Prevention, IS Risk Analysis

Gerard T. Capraro, President James D. DeLude, COO

1993

6.

Covey Computer Software 2520 Genesee St. Utica, NY 13502 (315) 738-6016/coveycs.com

8

100% 0% 0%

custom software development, SharePoint development, web-application development, software package integration, software requirements consulting, custom reports, generation services, database development

Jason A Covey, President

2011

7.

Mohawk Valley GIS 114 Genesee St., 3rd floor Utica, NY 13502 (315) 624-9545/mohawkvalleygis.com

3

55% 0% 45%

website design, mobile apps, interactive web maps, GIS services including data creation, analysis, mapping, and training

Linda Rockwood, Owner

2003

1.

Fiber Instrument Sales, Inc. (Giotto

2.

Enterprises) 161 Clear Road Oriskany, NY 13424 (315) 736-2206/fiberinstrumentsales.com

CORPORATE PROFILE: Company Name: Mohawk Valley EDGE Address: 584 Phoenix Drive, Rome, NY 13441 Phone: 315-338-0393 Website: www.mvedge.org

COMPANY INFORMATION: n What does your business do? EDGE promotes the Mohawk Valley’s people, work force, quality of life, infrastructure, sites, and everything else the region has to offer businesses, site selection specialists and industrial developers. EDGE links the area’s economic development organizations to streamline projects. We customize financing and assistance packages to help companies interested in locating or expanding their operations and job base in Oneida and Herkimer Counties. A private, not-for-profit corporation, EDGE is an integral part of the long-term effort by the public and private sectors to strengthen opportunities and open the door for new businesses and indus-

tries to locate and grow within the region. n History of the company: EDGE was formed in 1997 to facilitate the economic growth of the Mohawk Valley. n What industries do you work with? These locally concentrated industry groups have historically proven to fuel one another’s growth and success in the Mohawk Valley. Such business networks lead to competitive advantages for existing companies and start-ups alike. EDGE has made a concentrated effort to seek out these clusters and provide an environment to foster their growth.The Mohawk Valley has current strengths and growth potential in several industry clusters, particularly: • Finance • Insurance • Aviation • Aerospace • Distribution • Logistics • IT • Cybersecurity • Advanced Manufacturing • Agribusiness • Entrepreneurship n What is your geographical reach? Oneida and Herkimer County n What products/services (practice areas) do you provide? EDGE links the area’s economic development organizations to streamline projects. We customize financing and assistance

Research by Vance Marriner vmarriner@cnybj.com (315) 579-3911 Twitter: @cnybjresearch

ABOUT THE LIST

Information was provided by representatives of listed organizations and their websites. Other groups may have been eligible but did not respond to our requests for information. Organizations had to complete the survey by the deadline to be included on the list. While The Business Journal strives to print accurate information, it is not possible to independently verify all data submitted. We reserve the right to edit entries or delete categories for space considerations. This list includes organizations in Herkimer and Oneida counties.

NEED A COPY OF A LIST? Electronic versions of all of our lists, with additional fields of information and survey contacts, are available for purchase at our website: cnybj.com/ListsResearch.aspx

WANT TO BE ON THE LIST? If your company would like to be considered for next year’s list, or another list, please email topranks@cnybj.com

packages to help companies interested in locating or expanding their operations and job base in Oneida and Herkimer Counties. EDGE can help your company find a suitable building or shovel-ready site to construct a new facility for manufacturing, R&D, distribution, office or any other industrial endeavor. n EDGE Services: • New Business Attraction • Strategic Site Development • Business Outreach • Capital Projects • Loans & Project Financing • Global Marketing • Grants & Grant Administration • Brownfield Development • Real Estate Management • Public Advocacy • Community Outreach • Staff Services/Administrative Support • Management of Subsidiary Corporations As part of the coordinated economic development effort of Mohawk Valley EDGE we provide services to: • Griffiss Institute • Griffiss Local Development Corporation • Griffiss Park Land Owners Association • Oneida County Industrial Development Agency • Oneida County Local Development Corporation • Rome Industrial Development Corporation • Utica Industrial Development Corporation

CEO PROFILE: STEVEN DiMEO Education, Experience and Board Involvement: Steven DiMeo is President of Mohawk Valley EDGE. Mohawk Valley EDGE is a not-for-profit corporation which creates public–private sector economic development partnerships. EDGE also staffs the Oneida County Industrial Development Agency (OCIDA), Griffiss Local Development Corporation (GLDC), and provides staff services to nine other organizations that are part of the EDGE umbrella. Steve also serves on the Governor’s Regional Economic Development Council for the Mohawk Valley Region. EDGE has a staff of 15 full-time professionals who coordinate economic development activities in Oneida and Herkimer Counties. As staff to GLDC, Steve oversees development of Griffiss Business and Technology Park, transforming it from an Air Force Base into a vibrant Park with over 70 businesses and 5,800 employees. EDGE is also responsible for the marketing and development of Marcy Nanocenter at SUNYIT, a 450+acre greenfield site zoned for the semiconductor industry. Prior to this appointment, Steve served as Executive Director of the Griffiss Local Development Corporation. During this period, Steve helped direct the development of a base reuse strategy for Griffiss, interacted with Air Force officials and other federal, state and local agencies on issues affecting the realignment of Griffiss and the ability of the community to move forward with the base recovery program. Prior to this position, he was Commissioner for the City of Utica Department of Urban and Economic Development. Steve is a graduate of SUNY at Albany and has a master’s degree from Georgia State University. Steve, his wife Dianne, and their three children reside in Utica.


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MAY 23, 2016 I MOHAWK VALLEY BUSINESS JOURNAL I MOHAWK VALLEY NEXTGEN

GRIFFISS: The NUAIR executive director notes good progress in the Alliance’s efforts (AUVSI) estimates that the U.S. economy loses $10 billion annually because of the delay of UAS integration. Another confirmation of the increased interest in UAS by commercial markets is the 4,200 organizations already granted permits by the FAA to fly drones, a number that has doubled in just the past six months. The introduction of insurance products to protect owners from damages is yet another indicator of a growing sector. AIG, a large international carrier, now offers business coverage for “broad physical damage” and for “third-party liability coverage, plus coverage of drone operators and on-ground crew members. Additional coverage for hijacking, unlawful seizure, and hacking is also available. In addition, AIG also offers policies for government agencies charged with firefighting, search-and-rescue missions, and detecting explosives. AIG and State Farm Insurance have both been granted drone permits to test the use of UAS to assess damage during the insurance-claims process and to respond to natural disasters.

Economic impact

A “Global UAV Market” research report projects that the military, commercial, and civil UAV market worldwide will generate nearly $115 billion annually within the decade. Preliminary estimates by Hickey & Associates, LLC., published in an AUVSI report on the UAS-integration impact on the U.S. economy, project the creation of more than 70,000 jobs by 2018 and a $13.7 billion marketplace. By 2025, the numbers increase to 103,776 jobs and an $82 billion market. “In the U.S., I see a $90 billion market by 2025 and a global market of a $1 trillion,” notes Brinker. Last December, the FAA told Congress that final regulations for the business use of drones would be completed by mid-summer 2016. The announcement has helped to spur the rush of applications for drone permitting, even though no one knows how the FAA will ultimately regulate the industry. “This is like the gold-rush days,” quips Brinker. “Everyone is scrambling to develop the model to ensure safe flight and the security of the system. It’s all very complicated. Picture 5,000 big, commercial aircraft flying in U.S. airspace at any one time and monitored by air-traffic control. Now add thousands or even hundreds of thousands of UAS vehicles flying in the same space at lower altitudes. Injecting capital into research and development is the key to building a successful model. Trust me; the government isn’t going to come up with the solution; only private-enterprise will.” Matthew Bieschke, president of UAS Americas Fund and a managing partner of Nexa Capital Partners, LLC, agrees. In a quote from Bloomberg.com, he says: “Regardless of the solution, it’s very unlikely that the FAA or Congress are (sic) going to fund a multi-billion [dollar] infrastructure program for unmanned aircraft.”

Capital investment

In 2015, venture-backed drone companies, located in the U.S., China, Europe, and Israel, received nearly 10 times as much capital investment as they attracted in 2014. Most of the funds went to drone manufacturers, with a growing slice going to those firms that are tailoring their drones to serve specific industries. The remainder went to companies developing software. UAS Americas Fund is set to provide $2.2 billion of financing, not for drone production but for building the integration system. Startup drone makers, as well as large

players, are attracting record amounts of funding as venture capitalists prowl for the next breakthrough technology. This market has attracted major players such as Kleiner Perkins Caufield & Byers, Lightspeed Venture Partners, and ff Venture Capital. Other heavy hitters include major corporations: General Electric Co. (GE); Google (Alphabet, Inc.); and Qualcomm, Inc. Lest the reader think that all drone manufacturers are startups; DJI, a Chinese company, has an estimated market capitalization of $10 billion, and more than 100 startups now have capitalizations topping $1 billion. While most investors are enamored of drone manufacturing and the software needed to run it, a few see a different business model. Rather than derive income from the sale and servicing of products, some investors are investing for access to data analytics. The drones collect the data, which can then be shared with multiple customers; in other words, collect the data once and sell the same data many times either to customers within the same industry, different industries, or both. These investors see this as a more profitable model. Andy Drozd, president and chief scientist at ANDRO Computational Solutions, LLC., headquartered in Rome, has committed to investing $1 million to create two new laboratories and to hire new employees to service the “Internet of Things” marketplace, which includes UAS and other autonomous systems. “Our service provides simulation tools to analyze co-site and spectrum co-existence issues,” he says. “This gives our customers the ability to perform interactive-computer modeling, simulation, and analysis to ensure that co-located communications systems don’t interfere with each other. We also provide test and measurement services for the purpose of performing spectrum surveys in support of site evaluations in order to mitigate electromagnetic interference and spectrum contention. Wherever there are multiple transmitters and receivers co-located on a common platform such as a UAV, we guarantee that all systems operate as intended.” Drozd has created a new corporation — Spectrum Fusion, Inc. — to focus on the UAS market. ANDRO has grown from 15 to 40 employees just in the past two-and-a-half years and expects to add another 10 people over the next 18 months.

NUAIR’s expanded mission

“The FAA originally mandated that NUAIR create sense-and-avoid technologies to deploy state-of-the-art range instrumentation to track UAS in the air and to provide the first-of-its-kind testing capability,” Brinker stresses. “The Alliance has also addressed cyber issues in order to protect UAS and autonomous systems from being hacked, and … [thus] preserve control of the UAS platform. This is still our primary mission, but the mission has expanded and become more complex. Working alongside NASA, the Alliance has added a goal to develop and demonstrate the future unmanned-traffic-management system that will safely allow drones to operate nationwide in low-altitude airspace. Even while we focus on how to keep the Domino’s pizzadelivery drone from ramming the Amazon delivery drone, NUAIR still has to complete development of its sense-and-avoid system so it is operational by mid-summer. “And we also took on a third responsibility — public-policy and education,” continues Brinker. “It became clear to us that unless the public understood and approved of what we were doing, UAS integration wouldn’t be successful. ‘Killer’ drones still

carry the stigma attached to their military uses, and Americans are concerned about their privacy — two issues we need to address. NUAIR and the other [five] sites need to get the word out. That’s why I spend about a third of my time speaking to groups and the media about the benefits of UAS and about our efforts to make it safe as well as functional.”

Progress

The NUAIR executive director notes good progress in the Alliance’s efforts. “We made history in Central New York when Aurora Flight Sciences conducted multiple, unmanned flights of its Centaur back in September 2015,” recalls Brinker. “This was the first time any large-scale, fixed-wing aircraft had flown at any of the six FAA sites. The Centaur flights proved that a large UAS could operate under even adverse conditions and exhibit endurance. Our progress at the test site has attracted a number of companies to the area to test their unmanned systems, and now we are seeing companies setting up operations in the region. Originally, we thought that two sectors — agriculture and public safety — would be most interested in using Griffiss but, to date, motion pictures, videography, and the news media have taken the lead in utilizing our facilities. This is real progress, and much of it is owed to the expertise of our more than 100 partners, which include corporations, universities, laboratories, institutes, and government agencies. And the list of partners is snowballing: interested parties keep contacting us.”

NUAIR

The NUAIR Alliance established its headquarters in 2014 at 115 W. Fayette St. in downtown Syracuse. The Alliance also has four additional locations: Griffiss International Airport, MassDevelopment in Boston, NUAIR Alliance Operations in Rome, and the Massachusetts UAS Test Center on Cape Cod. The staff includes 13 employees, of whom 12 are part-time. “We are an operational partner with CenterState CEO,” explains Brinker. “We co-located in CenterState’s headquarters and signed a support-services contract for back-office support. This helps to keep our costs down. NUAIR is fully independent with its own board of directors.” Its 2016 budget is $1.2 million, of which two-thirds of the income is generated by state grants, and the remainder by industry and user fees. Brinker notes that user fees have been rising rapidly. NUAIR’s executive director is an experienced pilot and aviation attorney. He retired in 1997 from the U.S. Air Force with the rank of Lt. Colonel after spending 25 years in both active and reserve service. Brinker graduated from the Citadel with a bachelor’s degree in political science and earned an MBA from Southern Illinois University and a J.D. degree from Atlanta Law School. Over the last two decades, he has held positions in government as counsel and in the private sector as president and consultant.

UAS innovation corridor

“NUAIR is the leading edge of an economic revitalization,” says Robert Simpson, president of CenterState CEO. “The Alliance has positioned the region stretching from Syracuse to Utica as a global center for the [burgeoning] UAS industry. This high-tech, innovation corridor has tremendous capabilities in sensing-technology and autonomous decision-making, which we call ‘data-to-decisions.’ The UAS R&D test site puts us in a leadership position in larger, unmanned systems and cross-connected platforms.

CNYBJ.COM Continued from page 6

While Brinker projects that the UAS sector’s growth in the U.S. will reach $90 billion over the next decade, the Mohawk Valley innovation corridor is positioned to capitalize on a much larger market — the Internet of Things (IoT), which is projected to reach $10 trillion by 2025. The IoT is a cross-platform, market opportunity that includes the industrial Internet of Things, smart cities, smart buildings and energy, smart grid, connected vehicles, UAS, and smart health care. “IoT creates a perfect storm: broadband Internet is widely available, more devices are created with Wi-Fi capabilities and embedded sensors, technology costs continue to decline, and smart-phone sales are skyrocketing,” Simpson says. “In another five years, there will be anywhere from 25 to 50 billion devices connected. Our goal is to build a network and supply-chain of businesses, institutions, and technologists that establish the innovation corridor as a global leader. This opportunity for economic growth is so important that our recent application to New York State’s ‘Upstate Revitalization Initiative’ contained a request for $250 million, half of the application total, to accelerate our lead in UAS and ensure our market dominance. We have received grant confirmation, which also positions us for larger, unmanned systems and cross-connected platforms. “Initially the $250 million grant will be used to accelerate the integration of UAS into the national-airspace system,” asserts Simpson. “Over five years, NUAIR will complete the first, low-altitude UAS traffic-management system for use beyond the visual line-of-sight. Another key component of the grant is to enable NUAIR to perform airworthiness and cybersecurity certification testing. Any UAS provider that wants to fly its vehicle will come here for certification testing. This should attract not just companies but entire industries to locate near the test site. And it’s not just UAS customers who will be attracted; NUAIR will provide certification testing for a number of industries. We plan to build a lab that will focus on testing, certification, design, and remediation services for IoT. The core activity of the lab will be the testing and certification of IoT devices to comply with standards of security, privacy, and availability. The lab will need to participate in setting national standards and in establishing protocols for its own use.

The future

“This region is investing in a drone-innovation zone to attract, seed, and accelerate the growth of UAS-focused businesses,” concludes Brinker. “We’re also establishing a law-and-policy institute with Syracuse University dedicated to developing UAS regulation and policy. Finally, our investments will also include creating an ‘autonomy school’ to initially conduct research, test, and deploy autonomous aviation systems before expanding to include autonomous marine and ground systems.” UAS started 167 years ago with balloons and bombs. For the first 163 years, drones were only of interest to the military and some hobbyists. Four years ago, Congress kicked the FAA into action to jumpstart the commercial sector, and just last year Jeff Bezos, the CEO of Amazon, woke up the public to the potential of unmanned package delivery. The UAS innovation corridor, with NUAIR acting as the catalyst, will be, in the not-too distant future, a hotbed of commercial activity designed to propel the region into a marketplace whose size will rival the annual U.S. GDP. Larry Brinker calls UAS “transformative.” That may be an understatement. n


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MOHAWK VALLEY NEXTGEN I MOHAWK VALLEY BUSINESS JOURNAL I MAY 23, 2016

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PRO DRONES: The parent company Pro Drones plans to invest $1M in the Rome operation over the next three years

calls Flyterra, according to Dziok. Flyterra provides the services that a drone would offer without a customer having to purchase a drone system, according to Dziok. “Think of Flyterra as [providing] services and [Microdrones, the drone products],” says Dziok. Pro Drones USA has three employees in Rome, including Dziok. The workers also include a sales director and an office manager, who was the first employee back in the fall. The company may hire a fourth employee, a UAS pilot/technician, “within the next month or two.” As a startup company, it’s a “little difficult” to put specific numbers on its plans for growth, he says. “It really depends on what kind of de-

mand we can generate,” says Dziok. Pro Drones in Canada has 30 employees about two years after its launch, and Dziok would “feel good” if the Rome office can reach the same level in the same time period. The parent company Pro Drones plans to invest $1 million in the Rome operation over the next three years, he adds.

Expansion

Pro Drones has been building its business and customer list in Canada for the past two years, according to Dziok. It decided to expand into the U.S. once the Federal Aviation Administration (FAA) in 2014 opened the regulations to allow commercial use of drones. “The opportunity is 10-fold in the U.S., looking at the population here, relative to

Canada,” says Dziok. The company chose to expand in Rome for several reasons. The FAA in August 2014 authorized the NUAIR Alliance and Griffiss International Airport in Rome to conduct testing of drones, or unmanned-aircraft systems (UAS). NUAIR Alliance is short for Northeast UAS Airspace Integration Research Alliance. The application approval for the certificate of authorization clears the way for testing under the FAA-designated Griffiss International Airport UAS test site. Pro Drones USA in Rome is a member of the NUAIR Alliance because its goals and that of NUAIR “are the same,” says Dziok. Both want the federal government to approve commercial-flight activity for

PROSPERITY: The Mohawk Valley is implementing Vision 2020 through bifocals. west campus at Marcy, containing more than 300 acres, has been reserved for the development of the Marcy Nanocenter. The growth of SUNY Poly at the Marcy campus has served as a catalyst to vault the region into cutting-edge technologies. Last year, the Computer Chip Commercialization Center (Quad C) opened on the campus. The 253,000-square-foot facility provides R&D to facilitate the commercialization of nanotechnology and nanoelectronics, especially in the area of 3D packaging. Quad C is supported by a $500 million annual budget and has secured its first tenant, the New York Power Electronics Manufacturing Consortium led by GE. When fully built out, the research facility will encompass more than 600,000 square feet. Just a half mile from Quad C is the Marcy Nanocenter, a site dedicated to wafer fabrication. It took nearly two decades to prepare the site for chipfabrication. On April 20, ams, A.G. of Austria, the first tenant at the Nanocenter, broke ground on a proposed 600,000-square-foot manufacturing plant to produce 200-mm and 300-mm wafers. The Marcy Nanocenter has a capacity to house 8.3 million square-feet of fabrication. As part of the Round V Regional Economic Development Council Awards, the Mohawk Valley has received funding to construct a 100,000 square-foot nano-cyber Innovation Accelerator Center near the SUNY Poly campus in Marcy. The facility will be used as an education-and-training center for advanced manufacturing in semiconductor, MEMS (microelectronicmechanical systems), mixed-signal IT, photovoltaics, and power electronics.

MV

Improving business decisions, operations, and performance

Private-sector involvement

High-tech companies in the Mohawk Valley are eager to fill the growing pipeline of new jobs. Indium Corp. is one of many area companies taking a proactive position to encourage students as young as middle-school age to engage in experiential learning. “Our goal is to excite students about science and technology careers, educate their parents and the community about the opportunities …, and ultimately recruit future employees,” says Dawn Roller, Indium’s director of human resources. “Everybody at this company talks STEM (science, technology, engineering, math), regardless of their role … [We have worked] with OHM BOCES in the SABA (School and Business Alliance) program … [Indium also] offers tours and shadowing opportunities to area students 12 to 18 years of age, addresses groups of teachers to educate them on STEM careers available locally and the skills needed to qualify …, and supports National Manufacturing Day by offering tours of our facility so people can see how an advanced manufacturer operates … [The company] hosts about 200 students and about 30 teachers annually [and] … offers paid internships to college students … Since the program began, between 50 and 75 of our employees have volunteered to work one-onone with the students. Originally, management saw this as a way to give back to the community, but now recognizes it’s a critical program to ensure that a qualified workforce keeps up with our growth.” Robert Geer, senior VP and COO of SUNY Poly, concurs with Roller about

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The horizon

drones. In addition, MVCC is sponsoring the company as part of the START-UP NY program. “MVCC has been instrumental in partnering with us … from being on their campus to … stewarding us through the program,” says Dziok. Dziok says Microdrones’ products target three “core areas,” including surveying and mapping, agriculture, and aerial inspection. For surveying and mapping, Dziok contends customers will find “a huge advantage to using an unmanned aerial vehicle, in terms of time, efficiency, cost.” But he also notes that Pro Drones USA is a startup and “not even ready to sell in the U.S.” as the firm is still working to get “so many things” in place. n

the importance of business partnerships. “Partnerships with companies such as Indium are critical to our success in cultivating students to STEM,” he notes. “This gives us the opportunity to showcase a local technology company with global, advancedtechnology customers. Kids as young as … [middle-schoolers] can see the impact of technology and … [begin to see] a career path.” Indium supplies materials to the global, electronic-assembly, semiconductorfabrication and packaging, solar-voltaic, thin film, and thermal-management industries. The company, with headquarters in Clinton, has 11 locations in the U.S., Europe, and Asia and holds more than 50 patents. Indium employs 800 people, of whom 450 work in the Mohawk Valley. As an undergraduate in college, I always anticipated history lectures given by Prof. Andreas Dorpalen. Each time he entered the classroom, Dr. Dorpalen preceded his presentation by saying “Hold on to your seats; we have a lot of exciting material to cover.” Good advice for the Mohawk Valley. After two decades of crafting and implementing a dream to make the Mohawk Valley a dynamic hub for high-tech research and manufacturing, the results of a truly audacious plan are already apparent. The same spirit of entrepreneurship that inspired the groundbreaking of the Erie Canal, which started in the Mohawk Valley, is alive and well today. The leadership here in The Valley may have traded oxen and hand-labor for automated technology that works in billionths

Continued from page 7

Continued from page 16

of a meter, but the idea is the same. Change is already visible on the horizon, but as my former professor used to say: “Hold on to your seats.” This is just the beginning of an economic renaissance that is sweeping the region. Tony Picente’s bridge to the future is still under construction, but the direction is clear, best summed up by Steve DiMeo, president of Mohawk Valley EDGE. “The elements are in place for an economic transformation that will bring regional prosperity for all, resuscitate our urban centers, and preserve our quality of life. I keep pinching myself to remind me that change is really happening and that our best days lie ahead.” The Mohawk Valley is implementing Vision 2020 through bifocals. Leaders such as DiMeo, Picente, Mettelman, Van Wagoner, Colon, Geer, and the high-tech area companies such as Indium with the strong commitment of the state’s governor, focus on the day-to-day through the close-up lens in order to keep the plan on track. At the same time, they view the horizon through the distance lens in order to stay on course. The name of the Vision 2020 plan serves as a double entendre: It sets a date for enacting the vision, and it gives an ophthalmological reference to excellent visual acuity. Clinton’s Ditch was the inspiration that launched 125 years of prosperity in the Mohawk Valley. High-tech innovation is the new inspiration that is not only bringing economic prosperity to this generation, but has also set the stage to bring even more prosperity to the next generation. To paraphrase Prof. Dorpalen: Hold on to your seats; there are a lot of exciting things yet to come. n


I 23

MAY 23, 2016 I MOHAWK VALLEY BUSINESS JOURNAL I MOHAWK VALLEY NEXTGEN

CYBERSECURITY: “Today, cybersecurity is involved in most crimes,” notes Philo intermediary agreements, helps to identify AFRL technologies that can be commercialized and assists in licensing the technology transfers. The goal is to get these technologies, developed at taxpayer expense, into the hands of the private sector as quickly as possible. As part of its mission, GI operates the Griffiss Institute Business Incubator, puts on innovation-discover workshops, sponsors the Commercialization Academy, supports area STEM (science, technology, engineering, math) activities, attends career and science fairs, encourages lab tours of AFRL/Rome, and promotes teacher-training workshops. GI has become the lead facilitator for private industry, academia, and the AFRL/Rome in spinning off technology commercialization.

Cyber Research Institute

In 2012, New York State established, by an act of the legislature and the governor’s signature, the Cyber Research Institute (CRI) as a subsidiary of GI. CRI, which was incorporated in 2013, was tasked with addressing the transfer, prototyping, and research for commercial applications of cyber technology developed by AFRL/ Rome. The goal was to improve the science and technology output of publicly funded research organizations and strengthen the private sector’s competiveness in defense research programs. CRI facilitates team creation and strategic-research initiatives between its industrial and academic members while also providing services directly to the military and other government laboratories and agencies. CRI also collaborates with Utica College, a national leader in cybersecurity education.

Cyber NY Alliance

The Central New York Defense Alliance, incorporated in 2011, is a 501(c) (6) not-forprofit corporation doing business as Cyber NY Alliance. The Alliance is a collaborative effort that includes New York businesses, academic institutions, government agencies, and community leaders. Its role is to promote, advocate, strengthen, and expand the area’s cyber eco-system by assisting AFRL at the Rome site. With more than 75 members, this coalition wants to create a super lab by leveraging the current cybersecurity cluster. The Alliance is developing the Cyber New York brand and a marketing campaign to encourage other organizations to join in the effort and to promote the region as a recognized center of excellence in cyber and information technology.

Private industry

The efforts of AFRL/Rome, GI, CRI,

and Cyber NY Alliance are complemented by a number of private area businesses that specialize in cybersecurity and information technology. ANDRO, AIS, Quanterion Solutions, and Capraro Technologies are just some of the companies specializing in this sector. “AIS is on the cutting-edge of cybersecurity technology,” says Charles K. Green, company president and CEO. “The company can address a wide spectrum of potential vulnerability points and assess and eliminate them, as well as protecting against emerging threats. Whether the concern is a secure operating environment for remote access, advanced debugging, reverse engineering, host protection, access to multiple security domains, automated encryption or decryption, analysis of network packetcapture files, wireless security, or forensic services, AIS’s advanced engineering and computer-science departments have the ability to address and overcome technical challenges.” AIS was founded in 2001 and currently leases a 46,000-square-foot building at the Griffiss Business and Technology Park. The company currently employs 170 people in 11 states, of whom 128 work in Central New York. Barry McKinney, the company’s VP and director of corporate development, notes that AIS is successful because “what really distinguishes us from the competition is our research … We’re not just capable of solving today’s problems; we’re thinking about generation-after-next concepts and capabilities.”

Utica College

“Utica College positioned itself early to be a national player in the digital revolution,” says James Norrie, dean of the School of Business and Justice Studies at the college. “We live in an age of [proliferating] digital services that open us up to the entire world. The digital Norrie revolution gives societies a tool that facilitates information and acts as a catalyst to make connections. [Like fire and atomic power,] … it has the capacity to do good things. In the wrong hands, it has a … [dark] side.” The college’s curriculum focuses on the burgeoning problem of cyberthreats. “The Internet provides unprecedented scalability of action,” continues the dean. “Even a single individual can attack millions of computers [and devices], because the Internet protocol is designed to function globally. [Unfortunately,] … not all users are trustworthy.” Utica College focused on cyberthreats as early as 1988 when it established the Economic Crime Institute (ECI), formed to support an economic-crime investiga-

CNYBJ.COM

tion major, the first undergraduate program of its kind in the country. (The program has recently changed its name to FFCI — fraud and financial-compliance investigation.) ECI morphed into the Economic Crime & Cybersecurity Institute (ECCI) now headed by Prof. Raymond Philo. “Today, cybersecurity is involved in most crimes,” notes Philo. “Both the public and private sectors [now] realize just how big the problem is … ECCI serves as a think tank that supports leading-edge thinking on economic-crime issues … We continue to be a forum for the exchange of ideas, innovation, and technology that manages the risk of economic crime and serves as a resource for the investigation and prevention of cybercrime.” Complementing ECCI is the Northeast Cybersecurity and Forensics Center (NCFC), headed by its director — Prof. Anthony Martino. “We are a partnership of academic, government and privatesector resources,” he explains. “NCFC provides digital-forensic services as well as the operation of a state-of-the-art computer-crime lab. The forensics lab has been a resource to law-enforcement agencies, including those in Oneida County, the FBI, Homeland Security, the Secret Service, and other state and local agencies.” The original academic program in cybercrime has grown substantially. The college has just received approval for six new, online certification programs in advanced-computer forensics, cyber operations, cybercrime and fraud investigation, cybersecurity technologies, cybernetwork defense, and advanced-cyber policy. The new programs were created to respond to current industry needs, in particular, those of the financial-services industry, which is dealing with increasing regulation and growing cybersecurity threats. The new certification programs are in addition to a suite of online and campusbased undergraduate and graduate-level programs including bachelor’s and master’s degrees. Utica College is in the planning stages of creating a doctoral program in cybersecurity. The college has been recognized by the National Security Agency and the Department of Homeland Security as a National Center of Academic Excellence in Cyber Defense Education. Utica College’s reputation for producing graduates in the field of cybersecurity ranks with the best in the world, according to Norrie. “Our school is the first dualaccredited institution of higher learning in the country. These designations [of excellence] represent the gold standard for institutions of higher education.”

Economic impact

The economic impact of the innovation corridor on the Mohawk Valley is

Continued from page 17

huge. Last fiscal year, AFRL/Rome alone pumped $312.6 million into the five contiguous counties (Herkimer, Madison, Oneida, Onondaga, Oswego) surrounding the facility, starting with a $134 million payroll (the sum of gross wages, payroll taxes, and fringe benefits). The facility’s 2015 budget topped $1 billion, a 25-percent increase over 2010 and a reflection that the Air Force considers it the premier research organization for command, control, communications, computers, and intelligence. The lab’s workforce also increased by 58 to a new total of 789 civilian and military employees. AFRL/Rome also hosts 430 onsite contractors, which brings total employment at the facility to 1,219. The AFRL employees, in turn, create 1,434 indirect jobs and another $60 million-plus in payroll. In addition to creating direct and indirect employment, the lab has a tertiary impact on the local economy by attracting high-tech companies to locate in proximity to the facility. AFRL has 126 active contracts with New York state companies, nonprofits, and academia totaling more than $246 million. Half of the contracts are with small businesses. Utica College’s economic impact is also substantial. The School of Business and Justice studies registered 1,560 undergraduate and graduate students for the fall semester of 2015. Dean Norrie says that nearly half of all international matriculating students at the college coming from more than 40 countries are enrolled in cybersecurity programs. The dean also notes that 93 percent of his graduates found employment after graduation. The other 7 percent continued with graduate courses. The national cybersecurity industry currently has a 1 percent unemployment rate.

The future

The cybersecurity market, currently at about $110 billion, is expected to sustain a compounded, annual growth rate of 10 percent — reaching $170 billion by 2020. The total annual cost of cybercrimes is estimated to exceed $400 billion, a figure that surpasses the value of global drug trafficking. It looms as a major threat to the national economy and to our national security. The Ponemon Institute reports that it takes about 45 days to resolve a cyberattack at an average cost of $35,647 (2014 data). With the proliferation of mobile devices and the growth of IoT, cybersecurity represents a major growth industry in the arms race between those pursuing malfeasance and those defending against it. The epicenter of cybersecurity is right here in the Mohawk Valley, where the economic and military security of the nation will be determined. There is no doubt that it will be a key driver in the future prosperity of the region. n


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STEAM: The STEAM conference is just the first step in Drozd’s dream to create a theme campus at The Beeches that “Science without art lacks imagination; art without science has no form.” Project Fibonacci’s specific goals include broad community involvement; motivating and enlightening the next generation; creating scholars, musicians, artists, and engineers; making the Mohawk Valley an entrepreneurial hub, and helping to attract local tourism. “We have established several benchmarks for grading the success of the program. First, will we draw the 250 to 300 attendees projected? Second, how many will return in 2017? Third, did the program generate a [financial] surplus to aid subsequent programs? Fourth, how many local internships were created? Fifth, what was the level of interest from private industry? And sixth, did the program have a positive impact on local college enrollment?” says Kostelec. For this year’s conference, Drozd and Kostelec are planning on 75 percent of the attendees being 11th and 12th graders, with the other 25 percent college students. “The tuition for the conference is $1,500,” says Kostelec, “It covers food, lodging, internationally recognized keynote speakers, transportation for offsite tours, and incidentals. The program is not accredited this year, but we are planning on affiliating with a local college in the future to grant credits. Also, this year there is no designated scholarship fund, but any surplus earned this year will go to seed next year’s event, which will include scholarships. I am happy to say that in lieu of a designated 2016 scholarship fund, a number of local school districts and companies have voluntarily provided scholarship assistance.”

Fibonacci

When this reporter asks why the project is named Fibonacci, Drozd smiles. “Leonardo Fibonacci (the son of Bonacci, 1170-1250) was a medieval mathematician who discovered a branch of mathematics that neatly describes emergent patterns in the realms of science, engineering, nature, art, and music,” explains Drozd. “He introduced the decimal system and the use of Arabic numerals into Europe and wrote extensively on business problems, such as how to calculate profit, how to price goods, and how to convert currencies. He is best known for the Fibonacci sequence (each succeeding number is the sum of the two preceding numbers), which appears in many different

areas of mathematics and science.” Fibonacci was recognized all across Europe for his innovations, and his hometown of Pisa gave him a salary in recognition of his advising on matters of accounting and teaching the citizens of Pisa. Drozd’s inspiration to create Project Fibonacci came from personal experience. While in high school, his son attended two Envision programs sponsored by George Mason University in Virginia. The experience had a profound effect on him. “I saw the impact the program had on my son,” notes Drozd. “Students face real challenges in understanding the opportunities available to them and a vision of how to go forward. Academic success is not enough today. In addition to knowledge, they need passion, innovation, and a plan to reach their goals. The Envision program seeks students with high academic achievement, leadership potential, a desire to build a focused career plan, and the maturity and confidence to meet the challenges of the program. The students are nominated by their teachers or are selected by an admissions board. It’s a great model that has worked for decades.” Project Fibonacci is proceeding apace. “Registration doesn’t formally begin until April,” Kostelec says in a March interview, “but we have already received over 200 nominations just from emails, word-of-mouth, and town-hall events. Most of the nominations have come from the area, but we have received some from Long Island, Rochester, New York City, and even the states of Washington and California. We purposely made the nomination form a simple, one-page document that just asks for basic information and a summary of why the nominee should be considered. To be eligible, an applicant must at least be entering the junior year of high school and have demonstrated or shown the potential for leadership skills and an aptitude or interest in STEAM fields.” Project Fibonacci is operating on a $500,000 budget this year. While tuition is expected to cover the majority of the cost, the conference has also garnered underwriting support from 22 sponsors (as of April 1). “We already have commitments of more than $100,000, and ANDRO is committed to add at least another $50,000,” stresses Kostelec. “The funds have come from school districts, the Rome [Area] Chamber [of

Commerce], area foundations, business, the Oneida County Executive’s Office, colleges, and the Air Force Research Lab/ Griffiss Institute. We’re thrilled at the outpouring of the community to support the conference.” SUNY Polytechnic Institute has also stepped up to the plate by acting as the “conference banker” and by extending its 501(c)(3) designation to contributors. Its role is to receive income and to pay the bills. It bears no fiduciary obligation for the success of the program; that honor goes to Andy Drozd and to ANDRO. The staff at Project Fibonacci includes Kostelec and 10 employees at ANDRO who are offering support. The outreach coordinator says he also has 25 volunteers to help, but he will need another 75 by the time the conference begins.

STEAM campus

The STEAM conference is just the first step in Drozd’s dream to create a theme campus at The Beeches. “Orrie [Destito] (a principal at The Beeches), and I have discussed creating a STEAM campus to attract kids from kindergarten to college,” declares Drozd. “The campus would follow the MURI (multidisciplinary university research initiatives) concept which involves teams of researchers investigating topics and opportunities that intersect more than one technical discipline. I see Syracuse University, Mohawk Valley Community College, Onondaga Community College, Utica College, and other institutions collaborating with the STEAM students and issuing scholastic credits. Also, local businesses play a key role by creating internships and real-world opportunities for the students. This is how we get our kids back on track to be competitive in the global economy and not stuck in the 34th position in international rankings in math and science. In addition to the theme campus, Drozd and Kostelec are also looking at the opportunity to make the Fibonacci program available in different locations around the country and to create a version for younger children.

Drozd

Drozd founded ANDRO in 1994 as a niche-oriented R&D company that did groundbreaking work in electromagnetic effects. The company now specializes in providing simulation tools to analyze co-site and spectrum co-existence issues, offering its customers the ability to

perform interactive computer modeling, simulation, and analysis to ensure that co-located communications don’t interfere with each other. ANDRO leases 25,000 square feet of office space on the 55-acre Beeches campus and also has offices in Dayton, Ohio and at the CASE Center in Syracuse. Drozd is considering opening a fourth office in the Washington, D.C. area. ANDRO currently employs 40 people and is in the process of hiring 10 more in order to focus on developing more private-sector business, specifically in the growing unmanned-aerial-systems sector. The company has grown 400 percent in the past four years and posted sales of about $7.5 million in 2015. Drozd is the sole shareholder. Drozd was born in Belgium and immigrated to America at the age of 1. He attended high

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school in Rome and graduated from Syracuse University, where he received a bachelor’s degree in physics and math and, in 1982, a master’s degree in electrical engineering. His career included stints at the Rome Air Development Center, IIT Research Institute, General Electric, and Kaman Sciences Corp. Drozd also has taught physics at Utica College. Drozd is committed to inspiring students and to helping them find their passion. It’s unclear whether he ever stood on his desk or created his own style of walking, but he has adopted an “unorthodox” method of teaching how to marry science and art. Leonardo Fibonacci is remembered for teaching the citizens of Pisa; Andy Drozd will be remembered for teaching the citizens of Rome, New York. 

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