Trying to Change High-Tech Landscape
The khaki crowd, bleary-eyed at 7:45 a.m., crams around the Diedrich coffee hut.
Programmers from Cisco Systems Inc., waiting impatiently for their double cappuccinos, chat about the latest project hurdle. A manager from America Online Inc. eavesdrops. Behind them, a salesman from start-up Biz2biz-.com gabs on a cell phone cradled in the crook of his neck as he jots on a Palm organizer balanced on top of a large latte.
A typical scene in Silicon Valley. A relatively new one in Orange County, where a dream to grow a campus for high-tech firms is beginning to take root.
The coffee hut is smack center in University Research Park--185 acres of rolling hills and strawberry fields next to UC Irvine that are being transformed into a tech hub.
The $300-million project languished for years, stalled by a leadership vacuum at UC Irvine, until developer Irvine Co. stepped in three years ago and began to nurse it to life. Recently, titans such as Cisco and AOL have moved research teams into the quiet pocket of beige and white buildings to work in relative obscurity.
These teams represent the premium technology jobs that Southern California, and Orange County in particular, has so craved: the ones that could generate momentum, identity and the buzz that the county’s tech economy lacks.
“If we develop a couple of world-class environments for start-ups, that will attract venture capital and may shift the tide,” said Greg Hawkins, chief executive of Buy.com Inc. in Aliso Viejo.
University-linked business parks have been powerful engines of major tech valleys around the world, luring brilliant minds, cradling innovations and spawning start-ups. Stanford Industrial Park is home to Hewlett-Packard Co. The Massachusetts Institute of Technology incubated Lotus. Netscape was formed around the University of Illinois, Dell Computer around the University of Texas.
UC Irvine, though, doesn’t have their research muscle. It has just begun recruiting entrepreneurially minded professors likely to feed spinoff companies into the park and only after much bickering about whether such commercialization would taint its mission.
Unlike similar ventures in places such as Austin, Texas, and Madison, Wis., Orange County’s research park has no organized backing from local government or business boosters.
Moreover, despite Irvine Co.’s progress in attracting some prestigious tenants, analysts wonder whether the developer “gets” the tech world, where rule-breaking mavericks thrive in chaos, turning inspiration into industry at breakneck speed. Apart from Diedrich, the park has no restaurants, shops or informal mingling spots where people can network and create a gossipy, tightknit community similar to those in Palo Alto and Austin.
Powerful developers have historically driven Orange County’s economic growth. But can the region’s technology revolution be orchestrated from the master-planned boardroom of an old-line real estate giant?
Richard Sim, president of Irvine Co.’s investment properties group, thinks it can. His office walls are covered with poster-sized aerial photographs--his “chessboards,” he calls them. Black rectangles and colored dots signify the 14 buildings in place and the 26 to come.
When completed, the park is expected to have 2.4 million square feet of office space in which as many as 10,000 people will work--a far cry from the 2,000 or so workers in the 22 companies there today.
“If you come back three years from now, you’ll be amazed at the collaboration,” Sim said of how the park is uniting UC Irvine brainpower with commercial interests. A 5-foot-tall cartoon cutout of the Anteater, UC Irvine’s mascot, grins beside him. The park has already accomplished much, he says.
In its first year, University Research Park landed three crucial anchors, all offshoots of well-known tech giants: an America Online research and development team working to put the company’s product into wireless devices; Cisco’s digital subscriber line (DSL) development group; and Shopping.com, a buying service acquired by search engine AltaVista.
For AOL, the park’s first tenant, part of the location’s appeal was clearly to do research and development below the radar, away from the vicious competition for engineering talent in more established tech hubs. To this day, the company has not put a sign on its building and declines to talk about its Irvine outpost.
By contrast, Cisco has become the park’s recruiting poster. Since the company moved there last summer, Destination Irvine, the city’s economic development arm, has been using Cisco’s office as Exhibit A in recruitment tours for other tech firms.
Cisco, which expects to have more than 200 employees there by year’s end, most of them engineers, is building profitable relationships with both UC Irvine and its Orange County neighbors--brainstorming with a local firm that makes cameras for live Web casts, for example.
The brand-name anchors are already working as magnets.
TeleCore Inc., a fast-growing start-up that sells and installs high-speed Internet communications systems, tossed a luau in early May to celebrate its long-awaited arrival in the park.
TeleCore lobbied for almost a year to win its plush, new 10,000-square-foot home, said founder John Clarey, who just sold the company to Fort Lauderdale, Fla.-based Viasource Communications Inc., which expects to keep the Orange County office.
“We wanted to be in the hot new area,” Clarey said, “something that would mirror Stanford or North Carolina.”
Stanford has stoked Silicon Valley’s tech fire for almost 50 years. Urged forward by engineering professor Fred Terman, the university leased portions of what had been peach groves to technology pioneers such as Hewlett-Packard, General Electric Co. and Eastman Kodak Co. Today, the 700-acre Stanford Research Park houses 150 companies spanning virtually every tech sector.
In North Carolina, the 41-year-old Research Triangle Park used the allure of three nearby universities to draw IBM Corp., Nortel Networks Corp. and Glaxo Wellcome Inc. The 7,000-acre research park, the largest in the nation, has more than 105 research and development companies and organizations. About 43,000 people work at the park.
The bet is that University Research Park could give Orange County a similarly big--and much-needed--boost.
Although long considered Southern California’s best hope of becoming the next Silicon Valley, Orange County in recent years has been generating a declining share of the state’s patents, venture capital and high-tech jobs. Despite its relative affluence and educated work force, analysts say Orange County has been hurt by an absence of a dominant tech company or industry and a suburban culture more suited to “old-economy” companies than fast-paced Internet firms.
University Research Park could change that. But some wonder if it’s too little, too late.
Most of the nation’s 150 university-related parks were founded in the ‘80s. More recently, momentum has shifted away from isolated, pre-planned campuses to more urban environs where tech start-ups find cheap, flexible office space amid retail and residential areas.
A prototype of the new model: The spontaneous research district that has sprung up in north San Diego County. La Jolla alone boasts a University of California campus, the Salk Institute, the Scripps Research Institute and the Burnham Institute for cancer studies.
Qualcomm Inc., the digital wireless giant, was launched by staff from UC San Diego’s electrical engineering school. Its employees have spawned dozens of spinoffs, and a host of other established wireless and satellite players, including Ericsson, Nokia and Uniden, have moved into the area as well.
“We faced the same problem that everyone else in California had when the economy was clobbered by the aerospace industry,” said Julie Meier Wright, chief executive of the San Diego Regional Economic Development Corp. “The difference between us [and Orange County] is that the research pipeline is very rich. The explosive growth you see today came from early seeds that were planted 20 years ago.”
Seeds Planted Nearly 50 Years Ago
In some ways, however, the roots of University Research Park in Irvine run even deeper than that.
When Los Angeles architect William Pereira drafted Irvine Co.’s original plan for the university and the surrounding community in the late 1950s, he set aside land for “business firms and the university to benefit from their proximity to one another through mutual research facilities, joint studies, exchange of ideas, etc.”
The park in Irvine was officially established in 1983, but sat fallow for 15 years as university officials waited--for the 73 toll road to be built, for the economy to bounce back, for state budgets to ease up and, most of all, for a consensus to emerge about what to put there.
The university’s long-range plan called for a life sciences business park tied to the nearby medical school, said Bill Parker, UC Irvine’s vice chancellor of research. But the plan was never put into action.
Moreover, the state university system, and UC Irvine within it, argued for years about their role in mining the commercial applications of research products. Even after laws changed to allow public universities to profit from federally funded inventions, UC Irvine’s administrators hesitated to pursue opportunities that did not directly benefit students.
In 1997, Irvine Co. went before the state Board of Regents with its proposal to lease the school land for the university park. The idea was blasted by some UC Irvine faculty.
“Many thought and still think having companies near academia is blasphemy,” said Cynthia French, director of development for University Research Park, who serves as UC Irvine’s liaison to park tenants and Irvine Co.
Two and a half years later, as the bulldozers rumble and the concrete is poured, the park’s stakeholders continue to grapple over who should determine the admission standards--a battle that could determine whether the park will ever have the effect of the elite innovation factories it is modeled on.
Several tenants, including Paragon Biomedical, a medical consulting firm, and copier makers Canon Information and Danka Office Imaging, do not fit the mold of “pure” tech companies. Most tenants have quickly tapped into UC Irvine as a source of feeder talent, hiring both interns and full-time staff. But just four have paired up with the university to do research.
Some other important pieces are missing.
An Uneven Record for the University
UC Irvine’s academic ambitions are lofty, but the 35-year-old campus has made uneven progress in attempting to compete with California’s elite schools. Its business program ranks among the nation’s top 20, but UC Irvine appears to be losing ground in technology fields. UC Irvine’s combined enrollment in engineering, biology, physical science and computer science has dropped 7% since 1995, while it has gone up at UCLA and UC San Diego.
Local tech eminences have begun pumping cash into UC Irvine to change that. The engineering school received $20 million last year from Henry Samueli, a UCLA Ph.D. who co-founded Broadcom Corp., a leading communications chip maker in Irvine. Broadcom and its main rival, Newport Beach semiconductor maker Conexant Systems Inc., this year donated $6 million for a new communications technology center and to bolster the school’s allure among young researchers.
Other links among the park, the school and businesses are still forming. French is setting up monthly technology round tables to bring tenants and faculty together. Ultimately, she wants to start a nonprofit center to act as part incubator and part think tank, a conduit for applying park-generated technology to Orange County problems.
The center, she hopes, could help forge the backbone of civic support the park lacks. UC Irvine and Irvine Co. have shouldered all the risks and stand to reap all the rewards. But without more widespread involvement, it is hard to convince sought-after, cutting-edge companies and entrepreneurs that this is the place to be, French said.
“Why aren’t there more people at the table?” she asked.
Still, French is fond of reminding doubters that research parks take an average of seven years to mature. Orange County’s version, though years in the making, is a mere toddler, she said.
In his Irvine Co. war room, Sim points to a rendition of a grandiose archway of greenery and statuary on Bison Road where the park and the university meet. That, he said, will be the main gateway into UC Irvine.
Someday, he said, “It’ll go right through University Research Park.”
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Major Tech Parks
Park: Stanford Research Park
Year started: 1951
Size (acres): 700
Key tenants: Hewlett-Packard; IBM; Xerox Palo Alto Research Center
Owner/Management: Stanford University / Stanford Management
*
Park: Research Triangle Park, near Raleigh, N.C.
Year started: 1959
Size (acres): 7,000
Key tenants: IBM; Glaxo Wellcome: Biogen
Owner/Management Research Triangle Foundation
*
Park: University Research Park, Madison, Wis.
Year started: 1984
Size (acres) 250
Key tenants: Hagler Bailly; Novagen; Genetics Computer Group
Owner/Management: University Research Park (nonprofit)
*
Park: Northwestern University / Evanston Research Park, Evanston, Ill.
Year started: 1987
Size (acres): 24
Key tenants: Celsis International; Fujisawa Research
Owner/Management: Joint venture between city of Evanston and Northwestern
*
Park: University Research Park, Irvine
Year started: 1997
Size (acres): 185
Key tenants: America Online; Cisco Systems; AltaVista
Owner/Management: UC Irvine / Irvine Co.
Making a High-Tech Magnet
The seeds of University Research Park were planted in the late 1950s by
Los Angeles architect William Pereira, who envisioned a campus-like setting where business know-how and university ideas would come together. The park was established in 1983 but only recently attracted technology heavyweights such as Cisco Systems and America Online. When completed, the park’s developer, Irvine Co., envisions more than 40 buildings housing about 10,000 workers.
