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The Struggle for Siliconia, Part 2 of 3: The Sum of Its Parts- The Geographical Struggle So, in attempting to establish itself as a high-tech center, Southern California has faced considerable difficulty attributable in part to its geographical dispersion. Its unique map of scattered activity has caused a series of ripple effects, from the lack of coherent, consistent and available data from research institutions, to the relatively smaller amounts of investment money flowing in, from the effectiveness--and consistency--of government policy (in an area of multiple jurisdictions), to the essential sharing of resources. First, there is the issue of defining what Southern California actually is, and many definitions by research institutions fail to fully recognize and track its activity by excluding areas that are not considered part of Southern California. This despite the fact that on any measure of economic collaboration, market presence, collaboration and value, the region does include many areas that have not always been considered part of its reach. This results in research and data that is often arbitrary, varied or inaccurate. In addition, as larta indicated in its Southern California Technology Innovation Index 2001, "because it is such a widely dispersed area with a large spectrum of economic activity and employment, many "per capita" measurements examining strictly technology activity will inevitably rank Southern California below regions with highly concentrated (centralized) technology activity." The current economic slide in the overall technology sector may prove to be a blessing in disguise for Southern California. As the media and investment hype gravitated towards Silicon Valley and its overnight millionaires in the late 1990s, the north will also take much of the fall during this dip, both economically and in terms of visibility. The UCLA Economic Forecast has projected a more benign impact on the Southland's economy, partly because of the diversity of its economic base. In addition, the lack of generalized storied success on Wall Street among its tribe of companies has led to less dependence on public markets, and therefore less of a fall during a time of volatility. This is not to imply that Southern California is in any way insulated from the technology recession--it witnessed the folding of several Internet-based companies such as EToys, and cutbacks across all the sectors. However, as indicated in a recent Los Angeles Times article, State's Economic Strength Has Shifted to the Southland, the Southern California region has a highly-concentrated and diverse base of "hard" technology and manufacturing, which may prove to it to be more sustainable region than the north in this post-bubble era. "Because of the diversity of Los Angeles, and because it wasn't as concentrated in dot coms as San Francisco, in essence the greater Southern California region will act as a stabilizer during this tech-led downturn for the state of California," said Ross DeVol of the Milken Institute. "In many respects, I see it as a mirror image or opposite of what happened in the early 90s in Southern California. There, with the collapse of the aerospace industry and defense downsizing, it fell heavily on Southern California, while the Bay Area acted as a stabilizer for the state. I think now with Southern California's hard tech base, and not having as much of it geared on the dot coms, it will act as a stabilizer for the state while the Bay Area will experience a recession." But the region's geographical scattering also causes a difficulty in establishing centralized technology clusters which play a significant role in regional branding. Even in specific sectors such as the biosciences, efforts to establish parks and clusters have yet to see the light of day. The recent $300 million effort to establish the University Research Park Park in Irvine has been set back due to the lack of interest from proposed tenants such as Cisco and Conexant Systems. Meanwhile, efforts are still ongoing to establish other thriving technology parks in Pasadena, Cal State Pomona, and the USC area. The establishment of these centralized areas of activity could potentially serve as a catalyst for the region's most crucial demands--the need for targeted branding efforts bounded by information and opportunity, the need to enable better interactivity between businesses and researchers, and the need to package and make more accessible investment opportunities. Indeed, larta's own Venture Salons were born out of a need to provide, in a central place, the opportunities with which venture and other investors want to connect. Aside from stumping communications between businesses, the region's geography also plays a part in the interactivity and effectiveness of government entities. Los Angeles County alone has eighty-eight separate cities, and it is one of six counties in the region. There is a huge challenge inherent in developing and leading initiatives that cover the vastness of the landscape and the diversity of its inhabitants. One often witnesses this problem, particularly on infrastructure projects such as fiber availability and access and transportation (the regional giant, MTA, has many city governments, large and small and public sector interests represented on its board, with almost all carrying equal weight). This has also led to an egregious NIMBY-ism, where neighborhood activists and the elected representatives who respond fastest to the loudest voices can bring a regional plan to its knees, and can often cause the more fractured, otherwise-occupied business community to be caught on the defensive. "When you say government entity are you referring to the cities?," said Kyser on the role government plays in this area. "You have to understand what motivates a government entity. We have regional managers stationed around the county and they say in most cases the permitting process is still very time consuming and costly for business and this is for big cities and small cities. They're process-oriented, not results-oriented. So you have that tension out there. Then with most cities if they want any time of development, they want retail because that gets them some type of tax revenue and if they can't get that, they say let's increase fees on business. They don't understand--small businesses are fragile, (especially), startups. So you have a disconnect. You have thought leaders saying we've got to rebuild the middle class and yet when one says 'technology offers a wonderful vehicle for rebuilding middle class jobs' they don't understand how to go about it." Ross DeVol and the Milken Institute have made extensive efforts throughout the country in communicating with government entities about economic issues. Recently, Milken's work with the state of Kentucky resulted in a new position, Commissioner for the New Economy, which focuses upon attracting entrepreneurial-driven technology growth to the area. Although Southern California has made some substantial recent progress with former Mayor Riordan's formation of the Digital Coast Roundtable, DeVol feels the region has yet to witness the sweeping, effective effort that it needs.
"There hasn't been much of a focus of growing the technology
in Los Angeles, at least from the government perspective,"
said DeVol. "The area has the pieces of the puzzle, yet they
have to put all the pieces together. The government has to play
a key role in that in my opinion, they have to act as an agent
for change. Government can't drive it but it can push it in the
right direction. I haven't seen that, there's people doing things,
but there really hasn't been much success in developing a broader,
public policy regional networking. It needs leadership from the
highest level, it needs the mayor, business leaders. There hasn't
been a concerted, broad-based effort. I'm not even sure there's
a recognition amongst high-level officials." by
Wendy Hall Coming
this fall from larta: larta
will premiere its latest regional research report this fall, the
Southern California Technology Innovation Index 2002, an
update to the 2001
report which compared the growth and activity of the region's
technology industry compared to other areas. An economic benchmark
for the Southern California region, with hard data derived from
various statistical indicators, such as numbers of companies and
employees, educational resources, and investments, the new index
will include both updated numbers and new sections on Santa Barbara
and New York, as well as in-depth policy analysis.
*research
from Southern
California in the Information Age, by Joel Kotkin. Joel
Kotkin's writings and information on his best-selling book New
Geography, can be found at his web page, www.newgeography.com. |
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