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FIRST CAME CALL CENTERS; NOW COMES HIGH-TECH DEVELOPMENT
Published on January 31, 1999
Author: FRED O. WILLIAMS
© The Buffalo News Inc.
Rising Internet stocks and plunging Asian markets whipsawed the information technology industry in 1998, but Western New York companies linked to the sector stood their ground or better as the storm swirled around them.
The region's technology-oriented call centers built on their status as major employers, while small start-up companies pointed the way toward a potential new source of economic development. "It remains to be seen if we can broker that and attract the next level of (technology) companies," said Ronald Coan, executive director of the Erie County Industrial Development Agency. In the past few years, the call center industry has grown to become a prime source of entry-level jobs, Coan said. However, most call center jobs require moderate technology know-how and pay moderately as well -- the average call-center operator earns $23,198, according to a 1998 survey by the Buffalo Niagara Partnership. As the centers mature and their job growth reaches a plateau, Western New York's next challenge will be to attract or build companies that use higher-level technology skills, Coan said, such as computer programming and system analysis. That goal -- which got a boost from significant improvements to the region's technology infrastructure this past year -- would provide a ladder of opportunity for thousands of tech-oriented workers while fueling a potentially powerful economic engine. Major call center companies including Ingram Micro, Softbank Services Group, Teletech and International Data Response Corp. employ about 5,000 people in the region, many in technology-related occupations like selling computers or providing customer support for software companies. Other sizable employers such as Azerty Inc. in Orchard Park and Great Lakes Collection Bureau also operate call centers. The sector remains vibrant and economically important, but the rocket-like growth trajectory of the 1990s, when major companies established their presence here, is probably ending with the decade, Coan said. For most call center companies, 1998 was a year of building on previous accomplishments. In May, Ingram Micro opened a second call center and back-office facility in Amherst to support its wholesale computer operation. The Santa Ana, Calif.-based company is the largest wholesaler of computers and technology, and its Western New York operations are the larger of its two sales centers, with 1,920 people. The company's $26 million expansion building on Wehrle Drive boosts its potential employment capacity to 2,500. The Asian economic crisis sent the global computer industry into a sudden downturn in 1998, but one that seems to be rebounding just as quickly. Ingram Micro stock went into a skid in December as the company announced performance would be below expectations. But the company is still on track to post sales of $22 billion for 1998, a 32 percent increase from $16.6 billion the year before. "It's a little bizarre to me . . . to say we're not having a good quarter," chairman and chief executive Jerre L. Stead told Dow Jones News Service. Softbank Services Group, a company founded here in 1990 that went on to form the nucleus of the region's call center sector, was purchased by a Toronto-based conglomerate, diluting its regional ties. The sale to Onex Corp. will bring a name change for the 2,000-job call center operator, and the company has started describing itself as having dual headquarters in Buffalo and in Dallas. Earlier this month the company announced the opening of a new call center in Albuquerque, N.M., with room for up to 500 employees. But while the focus of the company's growth is no longer in Western New York, its two major sites here -- on Ellicott Street and Hertel Avenue in Buffalo -- aren't in danger of being uprooted, president Mark Briggs said. "We are committed to Buffalo. We are going to be here in a big way," Briggs said in October. As the year drew to a close, Teletech Holdings Inc. announced plans to expand its Niagara Falls customer service call center by 180 jobs, a move that will bring its employment total close to the 1,000 mark. The Denver-based company is on track to become the city's largest employer. And in Buffalo, International Data Response Corp. announced plans for a new $4.9 million call center that would double its employment level of 400 jobs in about two years. The task of leveraging those technology-oriented companies' presence to a higher plane of economic activity may be aided by significant enhancements to the region's high-tech infrastructure. As the new year began, the University at Buffalo announced formation of a $7 million supercomputer research center, putting it among the nation's top academic computer sites. The center, to be complete in May at UB's North Campus in Amherst, will propel research both within the university and at Western New York companies, director Russ Miller said. It may also give an indirect boost to a regional effort to attract a computer chip manufacturing facility, experts said. Chip makers consider the research capabilities in an area when selecting a new manufacturing site, consultants said. "(The plant) has to be someplace where the engineering staff wants to be," said Walt Lahti, an analyst at the chip industry consulting company Instat in Phoenix. The state's "Semi-NY" project is working to pre-qualify construction sites for a giant semiconductor manufacturing facility, which typically cost more than $1 billion and employ 1,000 people. Two of the potential sites are in Western New York -- the North American Center in West Seneca and the Airport Industrial Park in the Town of Niagara. Having a "shovel-ready" site should be attractive to chip makers, whose fast-paced market demands that plants go quickly from the drawing board to full production, economic development experts said. As the year began, both sites moved along the permit process, hoping to have the sites fully qualified for water use, traffic patterns and other requirements. Before moving ahead with the permit effort, Niagara County's site awaits an agreement with the property owner to reimburse the county if the site is used for something other than a computer chip maker, development officials said.SHARON CANTILLON/Buffalo NewsJeff Walter and Amy Doyle meet in an Ingram-Micro meeting room that has a direct feed to the company's California offices.
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