Southland’s Tech Expertise a Draw for European Firms
Companies from Europe are bringing fresh ideas to Southern California and being invigorated in turn by the business atmosphere here.
“The networking is fantastic,” says Klas Beck, president of NetGiro, a Swedish company that offers online financial transaction services to business.
Frequent entrepreneurial get-togethers that can draw 1,000 businesspeople at a time are a welcome revelation to the 11 NetGiro newcomers, who this year moved into offices in an Internet-ready building in Redondo Beach. The company is reaching out for customers and technology ventures with U.S. companies that need multi-currency invoicing and credit processing.
The availability of skilled labor in Southern California was a factor that persuaded Oberthur Card Systems, a French company, to put its U.S. headquarters in Rancho Dominguez. Oberthur’s main aim is to develop electronic card devices for Internet commerce. “We are close to Silicon Valley but the cost of people is less here,” says Philippe Tartavull, head of U.S. operations.
Both companies are bringing technologies widely used in Europe but scarcely visible in the United States. In Sweden and other European countries, a Giro electronic-payment system settles almost all bills for business and consumers.
“Checks are virtually extinct in Northern Europe. I have written two or three checks in the last 10 years,” says Per Almhem, executive vice president of NetGiro, which is a subsidiary of a Stockholm-based company of the same name that handles payments for banks in France, Germany and Britain as well as the Scandinavian countries.
Similarly, “smart cards”--plastic cards with microchips that contain far more personal information than conventional credit cards--have been used for years in France and other European countries.
“The telephone service was slow and waiting for credit card confirmation was endless, so we developed smart cards that [immediately deduct from] your bank account,” says Francine Dubois, marketing manager for the U.S. operation, which opened three years ago.
But NetGiro and Oberthur didn’t come here to promote existing European products and services. Their focus is on the principles underlying electronic commerce. NetGiro’s forte is creating the software that facilitates payments on Internet transactions. It sees itself as a service supplier to banks and small-to-medium-size companies whose sales and accounts are increasingly international and over the Internet.
Oberthur anticipates growing business from the need for security, identification and authentication in Internet commerce. Tartavull sees smart cards being used with set-top boxes to activate broadband Internet transactions and as devices for ubiquitous computing.
“You won’t need to carry a laptop computer. Simply slide our card into an Internet device and tap into the network,” he says.
The companies have put their U.S. headquarters in Southern California because of its tradition of skills inherited from the aerospace past, its preeminence in entertainment technology and its new skills of telecommunications and Inter net development.
Company officials also mention the weather. NetGiro’s young Swedish programmers have surfboards parked by their computers.
This area reached out as well. The Los Angeles Regional Technology Alliance, an economic development effort backed by the state of California and private industry, sent director Rohit Shukla to Finland and Sweden.
In those countries, ground zero of the European wireless revolution led by Nokia and L.M. Ericsson, Shukla preached Southern California’s attractions and set wheels in motion for contacts with local firms.
As a result, European newcomers to Southern California have formed technology partnerships with Sun Microsystems’ Java division, with Hewlett-Packard and others. Ericsson is in San Diego working with Qualcomm on new wireless standards.
But progress has been disappointing in entertainment, where the industry has been slow to pick up on opportunities and implications of wireless technology, Shukla says. Perhaps the coming of Vivendi, the French wireless company that is buying Seagram and Universal Studios, will awaken sleepy Hollywood management.
Why is that important? Because the Internet and wireless and other technologies give Southern California a chance to develop high-paying industries.
Oberthur, which has 1,400 employees and $140 million in U.S. revenue, employs 300 in Rancho Dominguez, where it makes conventional credit cards as well as electronically sophisticated smart cards. Pay starts at $20 an hour in the electronic clean rooms where Oberthur makes processors and in the areas where it designs new circuitry for smart card devices. The company trains personnel from within for those jobs and is expanding in all high-tech areas.
NetGiro has 11 skilled employees in Redondo Beach, will have 20 by December and 35 by the middle of next year.
Both companies believe that this area’s ties to Asia, Mexico and Latin America offer unique opportunities for future expansion of their business.
That’s one more reason they came to Southern California, which was once an outpost of the United States and is now a crossroads of the world.
*
James Flanigan can be reached at jim.flanigan@latimes.com.
