Coming next month from Larta: Orange County Report 2002

June 10, 2002

The development of the Orange County economy has come into its own from the shadows of Los Angeles and San Diego, with a unique technological and business infrastructure demonstrated by the diversity of industries represented. "The industries that used to characterize Orange County were land development and construction," said UC Irvine Chancellor Ralph Cicerone, one of the community leaders interviewed for Larta's Orange County Report 2002, to be released in July. "What's changed is that now it is a predominantly knowledge-based industry. It used to be that these major companies would have side offices based here, and now they're headquartered here." Yet despite the growth in the region, other issues and concerns have arisen that could affect and restrict the region's success as a technology center.

Discord and progress within a growing community

One of the main factors that has posed a challenge for Orange County discussed in the report is its difficulty in recruiting high-skilled employees that the technology industry depends on. Orange County has had a combination of forces working for it and against it in terms of being attractive to prospective workers, yet despite these setbacks, it has made continued progress. The year-round warm climate and generally comfortable lifestyle that it is becoming known for has made it a more popular place to live. However, the tight housing situation, the considerably high price of real estate and rent, and its reputation as being in the "shadow" of Los Angeles has worked against it. Other lifestyle issues addressed in the report include the traffic, airport, and general transportation problems, and population growth (and subsequent infrastructure) concerns.

Another major cornerstone in building a strong technology-based community for OC is the higher education system, and most of this burden falls on the shoulders of UC Irvine, the major research university of Orange County, which has been working towards a tighter relationship with the technology businesses that are based there. Since UC Irvine faculty were awarded the Nobel Prize in Physics and Chemistry in 1995, the University's reputation as a serious science and technology institution began to develop. The number of students in science, technical and engineering programs has risen considerably, yet UCI is still working on developing more activity in its graduate and masters programs. "The businesses in the area are most interested in people that we produce," says Chancellor Cicerone. "Many businesses here already have their own focus, and since they're not in the business of buying tech transfer, their primary need is for us to keep turning out advanced degree holders. Companies want to know if our University is a draw to this region, and if the presence of UCI helps them recruit and retain future outstanding employees from elsewhere."

Despite the fact that private venture investments in Orange County exceeded by far any other Southern California regions in 2001 (see figure below), the concept of social capital within the business community--organizations, networking groups, and public/private interactions--has not been fully developed and is a weak spot for the region. This causes a deficiency in social capital and contribution towards high tech growth, and subsequent disconnection between various business interests, politicians, and educators. Orange County business leaders need to determine their roles in developing the collaborations necessary to create the momentum to propel Orange County and its businesses to the forefront of the technology industry.

Another community issue facing the region is one that mirrors much of Southern California, that of fragmented geography. Like Los Angeles County, there is a lack of geographic center in Orange County, as well as no single industry or business sector that serves as the center. The Irvine Research Park, near UCI, is one one the most concentrated destinations in the region for technology businesses to interact and foster information and opportunity. Yet this does not suffice for the overall lack of concentration of businesses and business community in Orange County. Consequently, collaboration between companies is more difficult.

This latest research report from Larta, due out next month, will feature economic data and statistics and interviews with industry leaders in an effort to examine the current state of the region's health and stability, the obstacles that curtail its growth, and the strengths which will help move it forward as a leading economic and technology destination.

by Wendy Hall
Larta Staff Writer