High Tech’s the Wave of the Future; Orange County Should Ride It

Before Orange County developed its high-technology community, it was largely considered a prime real estate area in Southern California, which in turn was well known for its aerospace and defense electronics industries, as well as for entertainment, tourism and real estate. Northrop, McDonnell Douglas, TRW, Hughes, Rockwell and the like made up the core of Southern California’s technology industry. Orange County was a residential community.

The first wave of significant high-technology growth in the county came in the first half of the 1970s with the success of minicomputer manufacturers and software developers such as Basic Four, Educational Data Systems (now Point 4 Data Corp.), Micro Data and Varian Data Machine.

At the end of that first wave came companies such as General Automation and Computer Automation, begun as entrepreneurial offshoots of the county’s original high-technology companies. Some survived, some didn’t, and some have evolved into new organizations, such as MAI Basic Four. Others, including Varian and Micro Data, have been bought out.

Now, Orange County’s high-technology industry is experiencing a second phase of growth. Proof of this can be found in the 100 Orange County stocks listed in the Los Angeles Times every week: about 40% of the companies are involved in computer or computer-related products manufacturing or distribution. A major impetus in this second phase of growth has been the advent of the personal computer and related products.

It is interesting to note, however, that Orange County’s industrial base is not dependent upon one industry but gains it strength from a host of industries, such as medical instrumentation, pharmaceuticals, defense electronics and engineering, construction and oil field services. This diversity has given the county a stable foundation for business and community growth.

In my opinion, the near-future for Orange County’s high-tech community looks promising.

Opportunity is abundant, with many new start-up companies throughout the diverse base of industries and with the success and visibility of so many local companies encouraging new business formations and, increasingly, the location here of venture capital organizations that provide financing for new businesses.

And a number of support groups have sprung up to help people make the most of these opportunities.

Organizations such as the Southern California Technology Executives Network bring together executives across the boundaries of industry to provide a forum for management development and networking and to attract more technology companies to the area.

Others, such as the Research Institute for the Management of Technology, facilitate the transfer of governmental research and technology to the commercial sector from organizations such as Jet Propulsion Lab.

The area’s universities are now recognizing their responsibility for, and role in, developing technology in cooperation with the business community. All the pieces are coming together, and growth is inevitable.

However, the issues at hand are broader than whether or not Orange County will be successful as a high-technology center.

The real issues are whether high technology should be the foundation of our business economy and whether the county wants to become the technology hub of Southern California, like Silicon Valley is for the West Coast and Boston’s Route 128 is for the Northeast.

I believe that Orange County should pursue high technology in order to keep pace with the rest of the world.

Most of us have benefited from technology in a myriad of ways: through the advantages of personal convenience products and services such as the cellular phone and automated banking; through advances in biomedical technology, and through the advent of products, such as word-processing and financial analysis packages, that increase business productivity.

Our day-to-day personal and professional problems are being solved because of technological advances, and the world continues to grow increasingly dependent on high technology, which in turn is replacing many lower-skilled jobs with white-collar positions in areas such as information processing and manufacturing automation.

Lower-skilled jobs have been disappearing over the last 20 years; the transfer of these jobs to the overseas market, regardless of the impact of tax laws, the trade deficit and the value of the dollar, is a reality we need to accept. Even Japan is experiencing this labor shift toward the Third World.

Individually we benefit from this trend because high technology requires highly skilled manpower, and the creation of those jobs leads to high compensation and a resulting high standard of living. Macroscopically, high technology is the catalyst for progress. All industries, from banking to agriculture, benefit from the applications of high-technology developments through increased productivity, lower product or service costs and new job opportunities.

On the other hand, Orange County should not develop high technology as the sole source of its bread and butter. As experienced by Houston, Detroit and Pennsylvania, economic dependence on a single industry can bring about devastating vulnerability through cyclic or catastrophic market fluctuations.

In other words, Orange County must continue to encourage the growth of a broad base of industry. The semiconductor and computer industries may take on the responsibility as leaders in the growth, serving as the foundations on which other building blocks are placed. But ultimately, the responsibility to encourage this growth and diversification must be assumed by all elements of the community--government, education and business.

If the answer is yes, we must re-examine our efforts to slow the pace of development and decide either to give in to the physical inconveniences identified with growth or work to eliminate them. Land usage, transportation, and environmental issues could be resolved through governmental measures that would ensure reasonable remedies for the inconveniences that come with development. Change is intimidating, but Orange County has all the key elements to take a leadership position in Southern California’s development.

Government, through subsidy incentives and tax benefits, could encourage the development of key industries. Government can also establish long-term policies for transportation, housing, and education consistent with the long-range county growth plan. The county must establish a good business climate to develop and attract, from a worldwide pool of resources, the proper talents and tools to enhance our systems of education, government, research, business and finance.

We must do what we can to encourage innovation. Computer literacy must be a major goal in the primary and secondary education of our children, for the computer is a universal information tool used in all disciplines of higher education and all industries. Orange County can lead the way in setting this standard.

Higher education is crucial to the development of an industrial center, and UC Irvine can increase its key role in this development, aggressively recruiting research and teaching talent and developing top-notch research centers and laboratories, while encouraging innovative technology by granting its researchers creative license and financial freedom.

The county’s businesses and educational institutions should encourage partnerships to promote the application of research and development and, like the Stanford Technology Park, provide support to young entrepreneurs and their start-up companies.

Major corporations, although few in Orange County (only three public companies report sales of more than $1 billion), will be looked upon in the future to lead the way in research and development. The Xerox Palo Alto Research Center, as an example, has brought to the Silicon Valley a wealth of technological resources, resulting in a cooperative synergy of talents and high-technology advances.

The promotion of technology will have a wide range of benefits for Orange County residents, bringing a higher standard of living, the vitality that comes with innovation and the prestige of being on the cutting edge--we may no longer have to explain to people that Orange County is 40 miles south of Los Angeles!

As the 21st Century draws near, the world standard is shifting. Industrial might is no longer measured by tons of steel or bushels of grain, but by advances in high technology. And if we want Orange County to be the business center of Southern California or a gateway to the Pacific Rim, then we must encourage the growth of the high-technology industry so the county can enhance its identity and take a strong leadership position in the coming century.