Economic Seers Are Missing L.A.’s New Entrepreneurs

Anybody reading the numerous economic forecasts for Los Angeles and Southern California at this time of year should step back and consider James Larkin Jonassen, head of Larkin Associates, a Santa Monica-based talent search firm for new media.

When Jonassen started his company six years ago as a referral service for people working in CD-ROM development and the beginnings of Internet commerce, “we used to hold dinner meetings every month. But then the numbers grew so large that we had to have quarterly meetings,” he says.

“But our latest event, two weeks ago, drew 1,000 entrepreneurs working in media, Web site design and online content,” Jonassen says.

So what? So plenty. Because many of the 1,000 entrepreneurs at that latest meeting of Jonassen’s Los Angeles New Media Roundtable, which he gives the acronym LAwNMoweR, are uncounted by all the traditional economic measurements--whether by university and industry economists or the state’s Employment Development Department.

And such undercounting leads to chronic optimism deficiency. The economic situation of Los Angeles and Southern California looks poorer than it really is. For example, one study coming out today from UC Santa Barbara and UCLA’s Anderson School finds that job creation in multimedia is growing more slowly in the Los Angeles region than in Northern California.

But reality, in all likelihood, is different from the statistics. Fact is, incredible opportunities exist in new media in this region, Jonassen says. And the search is intense for qualified workers, even as hundreds work in anonymous isolation designing online advertising to pay the rent while creating their own tools for Internet commerce.

Help is on the way thanks to efforts at the city and state levels. In Los Angeles, Mayor Richard Riordan asked Jonassen in August to organize a new program to identify entrepreneurs working in new media and to map their locations. Jonassen has set up a Web site to receive names and ideas at https://www.w3-design.com/lawnmower/

And in Sacramento, the Department of Science and Technology, collaborating with the economic development office, is sponsoring the Gold Strike Partnership to identify and link new-media firms in the San Francisco Bay Area, the Los Angeles region and San Diego.

Simply counting entrepreneurs could be a boon to the economy’s development in many ways. Evidence that opportunities exist in new media could spur schools and community colleges to beef up courses in the arts and the training needed for online commerce. The breadth and depth of new media in this region will confirm the wisdom of philanthropist Walter Annenberg in setting up the vast Annenberg School of Communication at USC.

The world of finance will take more notice of the region. Undercounting sends false signals to the market and may account for venture capital’s relative neglect of this region. In 1996, according to Forbes magazine, Silicon Valley received $2.4 billion in venture capital investment, compared with less than $900 million for Los Angeles and Orange counties, which contain far more people than Northern California.

“The atmosphere here is different. It’s not a couple of guys from Stanford University getting millions from Sand Hill Road and starting a business,” says Jonassen, who studied prelaw and Spanish 20 years ago at the University of Illinois and founded a software firm in the 1980s. “Here it’s people working on content for the movies, television and advertising, and working up proposals in the entertainment industry pattern.”

Like so many businesses in the new economy of Southern California, new media is a beehive of individual activities, harder to measure by traditional concepts but adding up to an impressive economic force. Filming and online programming for commercial advertising increased 47% in Los Angeles in 1997, according to the Assn. of Independent Commercial Producers.

The number of people working in motion pictures and television--a mainstay of California’s economy--are also undercounted. “The employment numbers will be upgraded by 18,000 jobs, or almost 10%, when a new assessment is made in February,” says economist Jack Kyser of the Los Angeles Economic Development Corp.

It’s important to understand that the economic studies coming out at this time of year have not been careless. They represent valuable efforts to gauge the progress of this rapidly changing economy as it moves into new territory and a new century.

But grasping the elusive reality of Southern California’s economy today is difficult and frustrating. Thousands of small businesses and shifts within even traditional industries are hard to keep up with. The greatest growth recently in apparel and textiles, says economist Mark Schniepp of UC Santa Barbara, has been in Cerritos, Industry, Glendale and Pasadena.

So the message and the challenge to all business people in this area is twofold: We should understand and take pride in the fact that Southern California is one of the most active economic areas on Earth.

“Most studies of Los Angeles’ economy remind me of the Peggy Lee song ‘Is That All There Is?’ ” says Jon Goodman of USC’s Annenberg School. “There’s always more.”

And then we should support efforts for better education, improved transportation and communication--and more accurate information about people struggling to build businesses--that will help the region prosper.

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James Flanigan can be contacted via e-mail at jim.flanigan@latimes.com