That’s why – in addition to supporting the Federal Government’s efforts to reinvest aggressively in American semiconductor companies (see my previous blog on the Chips and Science Act of 2022) offering substantial strategic incentives to U.S.-based chip makers like Intel, QualComm, Broadcom, and Micron – I am vigorously supporting enactment of a 2% R&D tax credit here in the state of Oregon.

This modest incentive, an investment in Oregon’s future, will go far toward encouraging innovation among the thousands of Oregon’s small- and mid-sized tech companies who enable and support silicon companies. (The ripple effect of that investment goes without saying.) It will also help ensure that tech jobs associated with the resulting innovation stay here in the U.S., just as the Federal “Chips Act” is intended to promote rebuilding state-side chip manufacturing infrastructure.

Happily, I was afforded an opportunity to elaborate on this perspective directly to Oregon legislators and the lawmakers on the Joint Semiconductor Committee in a public hearing held on Friday, May 5. Here’s a summary of my testimony:

“While acknowledging and applauding the significant steps Oregon has recently made in the semiconductor investment arena – i.e. the $210 million Oregon CHIPS Act that emerged from the forward-thinking work done by the Joint Committee on Semiconductors and signed into law by Governor Kotek in April — I encourage our legislators to now broaden their perspective and investment beyond silicon chip manufacturing to spur similar, much-needed investment, momentum, and growth among Oregon’s equally vital small- and mid-size technology manufacturers, software companies, and other service providers whose contribution enable innovation at the big chip companies.

More specifically, the R&D tax credit is critical for such companies, as we strive to keep pace with the innovation occurring at the large companies – as well as achieve breakthroughs of our own in materials science, manufacturing, quality assurance, and many other aspects of our businesses.

In fact, innovation in silicon cannot be achieved without innovation across the whole technology sector – which includes PCBAs, box assemblies, system design, testing, and development of the very software stacks critical at the heart of emerging technologies like quantum computing, AI, advances in cloud computing. My own company, Cascade Systems Technology, is one among many examples the committee can consider: At CST, we assemble circuit boards and full box assemblies for a customer here in Oregon that is deploying them in a fabrication facility for semiconductor companies. So, in this case, CST’s technology is in use on both sides of the semiconductor supply cycle – pre-production (through building solutions needed in silicon fabrication) and also in post- production (where we’re helping to make the silicon functional in an advanced and complex circuit board.

Finally, given current geo-political realities and the hard-earned supply-chain lessons of the pandemic, it’s now well understood that we must nurture that ecosystem in the US to continue to be a global superpower: The U.S. cannot be reliant on foreign entities to “assemble” all the parts to make those advanced semiconductors functional. And if those competencies are to return to America, as well they should, why should we not ensure Oregon leads the way? In my view, Oregon has a tremendous opportunity if we pull this together with a holistic approach and design a legislative effort with the entire semiconductor solution stack – and not just the chip – in mind.”

Of course and importantly, I am but one member in the chorus that’s encouraging adoption of the 2% R&D tax credit in our great state. Here’s Duncan Wyse, President of the Oregon Business Council (OBC), writing to Senator Janeen Sollman and Representative Janelle Bynum — both members of the Joint Committee on Semiconductors (JSEMI) — on the need for the credit:

“Oregon is one of only 12 states without an R&D Tax Credit, while nearly every state competing against us for investment has one. Expert and stakeholder testimony to JSEMI has made clear the importance of these programs and how they work. EcoNorthwest has produced data for the committee demonstrating that these types of investments, when used to generate recruitment or expansion of semiconductor and advanced manufacturing firms, produce net returns to the state very quickly. Furthermore, guidance from the Department of Commerce has made clear that states and localities must show clear incentives for firms in those locations to receive funding under CHIPS. The continued absence of these incentives will cast doubt on CHIPS Act applications seeking to invest in Oregon by putting local employers at a significant disadvantage compared to peers in other states.”

And here is my good friend and colleague Skip Newberry, CEO of the Technology Association of Oregon (TAO), recently touching on the topic at hand:

“I am optimistic about the progress we are making with legislation in strengthening economic incentives for sectors such as semiconductors and advanced manufacturing firms that are critical to Oregon’s economy. The Oregon Chips Act is one exceptional example. Having just spent a bunch of time in Eugene, another example is the investment that’s taking place on the Knight Campus at the University of Oregon. And I remain hopeful that our legislators will shortly be advancing and adopting the proposed R&D tax credit, which will accrue significant benefits to the hundreds of Oregon tech firms who surround and enable our chip-makers with value and innovation they need to excel.”  

Interested in joining me, Duncan, Skip, and others in our sector who are advocating for the R&D tax credit in Oregon?

I strongly urge you to write to your legislators in support of the notion or reach out to the advocacy teams at the OBC and/or TAO to avail yourself and get involved. Just as a 2% tax credit for R&D activities can have a huge ripple effect on the economy, outlook, and competitive stance of Oregon – and our nation, as a whole — adding your support and story can help turn the tide on this possible legislation… Raising ALL our boats in the process!

–  Shantanu R. Gupta,
President & CEO, Cascade Systems Technology

Not by coincidence, and happily, the event also echoed developments and news on this same front arising from the tech sector (here’s an example on the semiconductor front from Intel) and from Washington, DC, including massive Federal investments in re-onshoring semiconductor capabilities; strategic efforts to curtail access by China and Russia to our most advanced, U.S.-borne chip technology that pose serious risks to national security here at home and among fragile democracies globally; and billions of dollars recently made available to companies developing battery, fuel cell, and adjacent technologies that will both help power future EV fleets and help America meet its aggressive emissions and global-warming mitigation goals.

Tailgating at the TAO event at UO (Go Ducks!)

Highlights of the event included a tour of UO’s new Phil and Penny Knight Campus for Accelerating Scientific Impact, a happy hour co-sponsored by Onward Eugene and Oregon Bioscience Association, and a terrific tailgate party ahead of a Ducks-Stanford football game (Go Ducks!). For me sporting event at hand served as a fitting metaphor: In the technology field – as on the gridiron — it will take a winning strategy, profound talent, and just the sort of investment UO is making in technology if we are to be “ahead of the game” worldwide. (BTW, the Ducks prevailed in the game: 45 to 27!)

So, what exactly is UO up to on these fronts and, as such, walking the talk of needed tech investment?

According to Sally Bell, “UO’s recent investments are foundational in knitting together the innovation silos across the state. The scope and importance for the expansion of facilities and programs will be an enormous lever for the tech ecosystem for recruitment of top talent, commercialization of new technologies and continued differentiation for Oregon’s economic resilience.”

Just three examples:

• A new UO campus situated in metropolitan Portland focused on experiential and tech-centric learning opportunities, networking, and internships throughout the region. Highlights will include a virtual- and augmented reality lab, PDX fabrication lab, and labs for sports product development and management.
• The Phil and Penny Knight Campus for Accelerating Scientific Impact, opened in 2019, whose mission focuses on “training new generations of scientists, forging tighter ties with industry and entrepreneurs, and creating new opportunities for graduate and undergraduate students.” Among enumerable resources at the new campus is the Knight Campus Innovation Center, offering leasable labs and offices for startup companies and creating a unique blend of engineering, applied sciences, and business innovation.  Just one for instance among many. According to Knight Campus Executive Director, Robert Guldberg, a pilot startup venture program has already yielded three startup companies that are moving new technologies to market. (You can read more updates from Robert on the impressive and fast-accumulating successes emerging from the campus.)
• Integration with regional technology industries – UO has been making significant, ongoing investments in outreach to, and collaboration with, tech-industry players in Portland and points beyond across Oregon. From stepping up both the volume and quality of student-centric opportunities like hands-on internships and co-ops; to direct involvement of corporate management and engineering professionals in the university’s academic programming, syllabus development, and collaborative research; to forging advisory relationships that inform UO’s future tech planning — my own attendance at the tech/Ducks weekend is an instance of this – the University of Oregon is really undergoing a sea-change in this area and fast becoming a force for tech innovation in the Pacific Northwest and nationally.

A snapshot of some of the folks who attended the TAO tech event at UO recently

There are many other examples and initiatives I could point to at UO (e.g., climbing enrollment, recent hires, very promising graduation stats to report already), but my larger point is that these are precisely the kinds of investments of capital, talent, and infrastructure that I’ve been promoting as being necessary to retaining, and indeed expanding America’s stature as a technology leader.

They also add to the portfolio of case studies in which TAO, itself, has helped to catalyze regional innovation over the last few years despite – and these being accomplished despite significant economic and supply chain issues arising from the pandemic.

Again, I’ll let Sally chime in: “There are four great examples of public/industry/education partnerships that TAO is convening and leading to build an environment for innovation in Oregon.

1. First, in June 2022, TAO hosted a Commerce Chain Summit which brought together thought-leaders from throughout the Pacific Northwest and beyond to discuss how best to strengthen our physical, digital and human infrastructure to ensure that businesses, residents and our natural environment benefit from a secure, resilient, and agile commerce chain.
2. Next, Smart and Connected Cities remains a top priority for our region and TAO hosted a three-part series in 2022, focused on cleantech innovation and investment, smart city technologies, cybersecurity, and the digital divide.
3. Third, the historic amount of Federal and State funds for economic recovery and innovation has given rise to TAOs involvement in a wide variety of cross-sector proposals and efforts underway for agricultural technology, cybersecurity, bio- and life- science, centers of innovation excellence and research. This collaborative approach for seeking investment is critical to Oregon’s success in this competitive landscape.
4. And last but not least, TAO is poised to facilitate Future Ready Oregon’s investment in workforce development through an industry-led process to work in lock step with education partners and workforce boards to bring a new era of tech upskilling to the state.“

If, as I stated at the onset, the goal is stay “ahead of the game” by investing in American competitiveness – seems to me we have a winning team and game plan here in Oregon!

–  Shantanu R. Gupta,
CEO, Cascade Systems Technology