The Struggle for Siliconia, Part 3 of 3: Branding and Business, Chicken and The Egg

The general sentiment in the Southern California technology industry is that much of its potential has yet to be seen, despite its successes and growth. Although branding is still a major issue in getting the region on the radar of investors, media, and talent, there is a chicken and an egg issue that exists. Will the growth of business accelerate branding efforts, or will branding efforts accelerate business?

"Although there's nothing wrong with the branding programs, what the region really needs is more businesses, successful businesses and talent," said economist Joel Kotkin, author of The New Geography.

Although business growth will--as money always does--talk loudest, the phenomenon of the branding of technology regions has been so synonymous with tech growth itself, that one can't ignore such an enterprise. The truth is, however, that many of these efforts were superficial and frivolous, and were based on artifice and projection than on real strengths and the place of the region in the worldwide value chain. The dual efforts to brand a region and to grow businesses are in a sense codependent, and thus can help to drive the competitiveness of the region.

A region's branding goals and business health can be greatly influenced by its research institutions, and Southern California's historical lack of success in commercialization has not helped either effort. Admittedly, there is a renewed sense of commitment in the region's universities and research institutions to commercialization of technologies, given the economic stakes for the institutions themselves and to the prospect for continued investment in the institutions by a healthy business base. However, the region has a long way to go. Southern California's commercialization rate compares weakly to other regions with a strong base of research institutions such as the Bay Area and Boston. As we discussed in our May 4 article, Tech Transfer: From The Research Space To The Marketplace, technology transfer and commercialization per se generally move at a snail's pace through universities; many of the processes are clogged with the veto power of too many people, paperwork and politics. Many institutions - including private, "foundation-level" companies - are tentative about commercialization for fear that they will lose their valuable researchers to a profitable business. Also, many researchers themselves are not as seasoned in business practices, which inhibits their ability to build and operate businesses which will grow and prosper. Culture and mindset are paramount, and the region has much to do to enable and facilitate the shifts necessary.

"We haven't been very good in that area," says LAEDC economist Jack Kyser. "We've made some progress but compared to what's coming out of say Stanford, we're rather weak by comparison."

Southern California's looming difficulty in attracting talent is linked to its regional branding problems. For experienced professionals, Southern California is often not on their short list of ideal spots. The lack of visibility and understanding of the region's technology economy, combined with multiple misperceptions about its quality of life (as detailed in Part 1), can substantially deter professionals and recent graduates from choosing Southern California as a career destination.

"Generally speaking, we do not have a pool of people here that you can draw on--people just don't look to Southern California as a destination place," said Bruce Blomstrom, the Chairman of the Board of Nanostream, who was interviewed for the Heart of Gold report.
This problem also extends to recent graduates who don't consider the area to be a sustainable technology destination. The increasing number of graduates from local universities who leave Southern California to begin their careers in other regions is a strong indication of the lack of faith in the region's strength.

"Its hard to attract talent here," said Milken Institute economist Ross Devol. "When students are making a decision, they generally accept that they have to move somewhere else. So branding is important if people aren't aware that there are opportunities within the region."

The Name Game

Across the country and the world, in regions with budding technology growth, there have been a plethora of branding efforts that have spawned a series of monikers, from Manhattan's Silicon Alley to others like Kansas City's Silicon Prairie (often dismissed as being "too cute"). Southern California's own experience has been all over the map. The branding efforts that initiated in the 1990s, resulted in the creation of two terms--both "The Tech Coast," and "The Digital Coast," the latter introduced by former Los Angeles Mayor Richard Riordan's founding of The Digital Coast Roundtable (DCR), an organization of both prominent technology and business professionals as well as government leaders who conduct regular meetings to discuss initiatives and other efforts to help promote the area. The DCR was originally intended to support the emerging tide of new media in 1998, and has since evolved its efforts to represent the broader and diverse sectors of the region.

"You go back to when there was a consortium, LAEDC, larta, Orange County Business Council, and San Diego Regional Technology Alliance, and they called this 'The Tech Coast,'" explains Kyser. "Then somebody took that and turned it from (a public-interest) branding effort to a commercial effort, so that sort of took the wind out of those sails and ended that. Kyser adds that the challenge is to "keep the whole thing going… so that the media will pick it up."

Since its formation in 1998, The Digital Coast Roundtable terms has shown signs of positive influence in both local business and non-profit organization events, as well as in the media, with both frequent mentions in The Los Angeles Business Journal, Forbes Magazine, Zone, and also in the creation of Digital Coast Reporter, a New-York based magazine from the publishers of Silicon Alley Reporter who selected the term to represent their Southern California coverage. The DCR currently has unspecified plans in the works to advance the presence of the industry even further, and to become a high-level information and knowledge exchange for cross-industry professionals.

"The DCR has managed, despite some considerable obtacles, to get the notion of Digital Coast out there," said DCR member and larta president Rohit Shukla. "It will take some time yet. And the DCR has an altruistic feel to it as opposed to other marketing efforts that seek to develop a business from the very public need for branding. In the next few months, they're going to make a singular effort to equate that brand with value and economic excellence that this region can provide to the rest of the world."

by Wendy Hall
larta staff writer
Rohit Shukla, larta CEO also contributed to this report

Coming this fall from larta:
Southern California Technology Innovation Index 2002

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.
Click here for more information on Southern California Technology Innovation Index 2001

*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.

For research and reports by Milken Institute economist Ross DeVol, visit the Institute's publications page.

For more information on the Los Angeles Economic Development Corporation's studies, click here.