O.C. Leads Nation in Applications for Export Licenses
Despite a drop in export license applications in California and the rest of the nation in 1989, Orange County continued to show healthy growth in this measure of international trade activity, U.S. Commerce Department figures released Friday show.
Orange County’s export license applications, which are an indicator of future trends in high-technology trade activity, grew slightly from 3,275 in 1988 to 3,293 last year. But it was the only area in the nation to show an increase in applications, Commerce Department officials said.
More important, the estimated value of those applications rose from $3.72 billion in 1988 to $6.20 billion last year. The value of applications also increased nationwide, mostly reflecting increases due to inflation and the dollar’s fluctuation against foreign currencies.
“The figures clearly show that Orange County companies are shipping a higher value of products per license,” said Mike Liikala, director of the Commerce Department’s western office of the Bureau of Export Administration. “The interesting figure is the value of Orange County applications, which has tripled from $2.03 billion in 1987.”
He attributed the sharp jump in the application values to an increasing interest among Orange County companies in expanding through exporting, he said. The figures for Orange County include all companies in the 714 telephone area code, which also includes a small number of firms in Riverside and San Bernardino counties.
The Commerce Department, through its Export Administration division, controls the export of highly sensitive commodities, such as computers and chemicals, that could have military uses. This division keeps a tab on the final destination of the products and how the commodities will be used.
Since only exporters of restricted products need apply for these licenses, “this indicates that Orange County companies are increasingly engaged in high-technology exports and that they are on the leading edge of high-technology,” Liikala said.
California as a whole would seem to be, by far, the most important state in the country in terms of high-technology exports. Total U.S. export license applications in 1989 were about 82,000, down from 96,000 in 1988. A third of that total came from California-based companies. In 1989, the state accounted for 23,569 applications, down from 26,539 in 1988, Commerce Department figures show.
“One possible reason why applications in the United States dropped is because the Commerce Department decontrolled a number of lower-end high-tech products, such as the 286 computers,” Liikala said. The 286 computers are industry-standard personal computers based on the Intel 80286 microprocessor.
The Commerce Department further reported that export license applications from Los Angeles dropped from 3,568 in 1988 to 2,836 in 1989; license applications from San Jose, which is home to the Silicon Valley and which saw the largest drop in applications, fell from 9,961 in 1988 to 8,861 in 1989; and San Francisco’s number of export license applications dropped from 5,372 in 1988 to 4,822 in 1989.
“In comparison to Orange County and San Jose, it appears that San Francisco and Los Angeles are falling behind in leading-edge technology,” Liikala noted. “The figures also show that Orange and Riverside counties are the areas of new economic development in Southern California.”
The World Trade Center Assn. of Orange County attributed the boom to a growing number of entrepreneurial companies and to the county’s “conducive” business environment, despite the area’s high cost of living.
“Orange County has a very diversified economy, and it is sheltered from the ups and downs of the general economy,” explained Susan Lentz, the association’s executive director. “We have always had biomedical and high-technology firms, and you’re seeing the outgrowth of that development over the last 20 years.”
EXPORT LICENSE APPLICATIONS
The number of approved export license applications, an indicator of future trends in export trade activity, continues to increase in Orange County, while it declines in the rest of the state and the nation.
1987 1988 1989 Orange County (1) 2,910 3,275 3,293 Los Angeles (2) 3,937 3,568 2,836 California 26,950 26,539 23,569 U.S. 101,000 96,000 82,000
(1) For firms in the 714 are code. About 90% are in orange county and the remainder in San Bernardino and Riverside counties.
(2) For firms in the 213 area code. Source: U.S. Commerce Department
