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High-Tech Hopes For Arizona

The State, its universities and business groups work to make Arizona a high-tech powerhouse.

When the new millennium arrived, high-technology activities in Arizona were on a slide. The industry was unable to keep pace with the job demands of an expanding population or match employment growth in other economic sectors. That was then.

The state’s high-tech picture is much brighter now. Semiconductor, aerospace, defense and optics firms continue to be major forces in Arizona’s tech industry. But there’s also a growing presence of companies specializing in biotechnology, information technology, nanotechnology, renewable energy and other areas that fit under the high-tech umbrella.

A roll call of companies with their headquarters or major divisions based in Arizona is an impressive one. That list includes names you should recognize, such as semiconductor powerhouse Amkor Technology, optical-engineering firm Breault Research Organization, On Semiconductor and the highly diversified Avnet Inc. It also includes a high-tech Who’s Who: Raytheon, Intel Corp., Honeywell International, General Dynamics, Boeing, Motorola, W.L. Gore & Associates and IBM among others. And they have been joined by relatively recent arrivals such as Jobing.com, Ensynch Inc., Google, Monster, Amazon.com and PayPal.

“With Boeing, General Dynamics, Honeywell, Intel and Raytheon, you’ve got some big players here,” says Ron Schott, executive director of the nonprofit Arizona Technology Council.

Also, while the bulk of these companies are spread across Maricopa and Pima counties, Arizona Department of Commerce spokesman David Drennon points to significant aerospace, defense and agricultural technology activity in the Yuma area and the growth of bioscience in Flagstaff.

None of this happened by chance. It took, Schott says, a lot of hard work by a lot of different groups and individuals.

“If you set up a positive business climate, these people are very, very intuitive and they’re intelligent,” Schott says. “And if they see things that are happening, people who are trying to make it a positive business state, they recognize that.”

The steps that led to the current high-tech business climate are numerous and varied.

Gov. Janet Napolitano formed the Council on Innovation and Technology in 2003 to generate new development strategies. Later, the Legislature passed such measures as the Angel Investment Tax Credit Program to entice investors, and the “sales factor” tax bill, which led to Intel committing $3 billion in a new Chandler-based 300mm wafer-fabrication facility.

Other important developments include the formation of Science Foundation Arizona and the Translational Genomics Research Institute, or TGen.

Also vital is the role being played by the University of Arizona, Arizona State University and Northern Arizona University. It’s no coincidence Google took up residence on the ASU campus.

Alaina Levine handles corporate relations for the U of A’s College of Science. She also coordinates the Professional Science Master’s Degree Program, a workforce development program that serves Arizona’s high-tech industry.

“Individual business leaders know that if they’re going to start a company here or if they’re going to bring a company here, clearly they need to know that they’re going to be able to staff it with very talented individuals and that there has to be a critical mass of those individuals,” she says. “Otherwise, it’s not worth the investment of moving or starting the company here.”

Arizona Business Magazine Dec-Jan 2008Likewise, those universities need to be widely respected for their academics and research programs. The highly regarded Eller College of Management at U of A and the Biodesign Institute at ASU are just two examples of the level of academic excellence found in the state.

Arizona’s rapid growth translates to a need for even more high-value jobs in the tech sector. And further industry growth will require the availability of vital business resources outside of the dominant population centers.

“It’s a positive, glass half-full scenario here in the state,” Schott says. “That doesn’t mean we don’t have problems, but we’re trying to work and focus on those problems and improve the environment the best we can.”

Baby Boomer Bust

Baby Boomers Bust

Companies get ready as boomers start leaving the work force

The catchy term many are using to describe the impending exodus of baby boomers from the work force sounds like the title of a science-fiction film: “The Brain Drain.

But there’s nothing fictional about it. The oldest baby boomers, a group that includes more than 78 million Americans born between 1946 and 1964, began qualifying for early Social Security benefits this year. Some may choose to work beyond the traditional retirement age and others could stay on for financial reasons, but the eventual departure of baby boomers will have a serious impact on corporate America.
This might be a particular concern in upper-management ranks, where positions are most likely manned by older, more experienced personnel and a talent pool of capable replacements is thin.

“The issue is simply that our population is getting older and the birth rates aren’t equal to the aging of the population,” says Angelo Kinicki, an Arizona State University management professor, author and consultant. “You’re going to have more people exiting than you will have entering (the work force).”

Despite this demographic shift, recent surveys from Ernst & Young and Monster Worldwide agree that few corporations are properly prepared for the challenges ahead.

“What’s going to happen here is as baby boomers retire, you’re going to have a lot of people who have knowledge that are leaving the work force,” Kinicki adds.

Kinicki says it’s vital to create systems for transferring knowledge from seasoned employees and senior executives down to lower levels through the organization.
“I’d say the more progressive companies are engaging in what we call knowledge-management programs,” Kinicki says.

But, according to a 2007 Monster study titled “Building and Securing an Organizational Brain Trust in an Age of Brain Drain,” few companies have taken such steps.

While trying to determine the level of awareness companies have of the coming brain drain and what they’re doing to prepare for it, Monster found that only 20 percent of firms had a formal strategy in place to manage and preserve organizational knowledge.

Monster concludes that “the absence of such planning leaves a valuable asset exposed to a competitive market. Firms must not only recognize the value of knowledge but actively manage and protect it.”

Kinicki says several companies in Arizona, such as Intel, APS and Honeywell, have taken a proactive approach.

One corporation that has been especially innovative is Avnet Inc., a Phoenix-based Fortune 500 company that is one of the world’s largest distributors of electronic components, computer products and technology services.

Lynn Monkelien, vice president of learning and development, says Avnet is very cognizant of the imminent retirement of baby boomers.

“(We) have started looking at all kinds of ways that we can start to manage this transition period,” she says.

Among those is a multiple-tiered program that uses top-level management to teach classes for those viewed as future leaders.

Consider the Global Organizational Leadership Development, or GOLD, program. It does more than just cover particular subjects. Managers are able to expose students to their own experiences, while studentsget a chance to build relationships with senior leaders, paving the way for future coaching and mentoring.

“I think the real benefit is going to come as we start to replace some of the oldguard with the new guard,” Monkelien says.

The company also places great importance on succession planning, according to Linda Biddle, Avnet’s vice president for talent development. Avnet’s goal is to create a steady flow of people at all levels of the organization ready to take on new roles.

“Avnet is always thinking ahead, trying to predict what things are going to impact our business from a technology standpoint, from a process standpoint and, also, from a people standpoint,” Biddle says. “What we’re trying to do is not be reactionary — we’re trying to be proactive.”

Arizona Business Magazine February 2008