Bumps Surface in Tech Corridor
While Ventura County’s economy continues to weather the nation’s recession, there are cracks in the high-technology sector, particularly in Camarillo, where many of those businesses are concentrated.
Many of the 62 tech firms that helped drive Camarillo’s economic growth in the late 1990s face challenges as a result of last year’s slumping computer sales, the fallout in Silicon Valley and a telecommunications oversupply nationwide.
Vitesse Semiconductor announced last week it would lay off 10% of its 1,300 employees worldwide. Power-One, which manufactures electrical current converters for the telecommunications industry, has cut two-thirds of its 7,500 jobs this year. Another Camarillo-based firm, eLabor, has announced cuts as well.
A study released this week by the UCSB Economic Forecast Project found that Camarillo’s economy grew only 3.9% last year, compared with 23% in 1998 and 21% in 1999.
“The reason we think that slowed down is turmoil in tech,” said Bill Watkins, who directs the UCSB project. The city’s economy picked up slightly this year, to an estimated 5.8%, but Watkins said the post-Sept. 11 climate could pull that growth back to only 2.3% next year.
In the Thousand Oaks area, high-tech employers also cut hundreds of jobs this year through layoffs or attrition, said Gary Wartik, the city’s economic development director.
At one point last year, mobile networking company Xircom Inc. had 1,800 employees worldwide and 800 at its Thousand Oaks headquarters, and was planning to move to a larger space in the city. Intel Corp. bought the company this year, and a spokesman said about 300 employees remain in Thousand Oaks.
Newport Beach-based chip maker Conexant also scaled back locally this year. French telecommunications equipment maker Alcatel put aside plans to expand its Calabasas operations into Thousand Oaks. Accelerated Networks in Moorpark, a telecommunications equipment start-up that quickly grew to more than 200 employees last year, suffered this year after several competitive local exchange carriers that it served dried up. A Santa Barbara company, Occam Networks, this month announced plans to merge Accelerated Networks with its own operations, moving the firm to Santa Barbara.
Economists say that the industry shakeout shouldn’t cause long-term damage to Ventura County’s portion of the tech corridor, concentrated along the Ventura Freeway from Los Angeles to Santa Barbara.
“There are some chinks in the armor, no question,” said Rohit Shukla, head of the Los Angeles Regional Technology Alliance. “But Ventura County actually comes out looking pretty good. While [many of these firms] may have downsized and certainly are not expanding as rapidly as they might like, they are still viable entities.
“In the short term you’ll see a reduction because there has been an overbuilding,” Shukla said. “But they have not overbuilt to the point of despair like so many Northern California companies.”
Besides, economic experts say, high tech provides only a sliver of the county’s 300,000 jobs. And other tech sectors are growing quickly. Biotechnology has been immune to the recession, and the defense industry is in demand with the nation at war.
Whatever is lost in high tech will be more than made up for by the growth in those areas, economist Watkins said.
Thousand Oaks-based biotech giant Amgen is the county’s largest private employer, with 5,500 workers and hundreds of additional hires expected with the recent approval of a new drug. Baxter BioScience is following through with plans to relocate its division headquarters from Glendale to Thousand Oaks by next year, also bringing hundreds of new jobs to the county.
General Dynamics and Rockwell Science Center, each of which has a local presence, also are expanding. Many displaced tech workers with engineering and manufacturing backgrounds may find their skills are transferable to these growth areas.
In the high-tech field, some local firms found their niche actually profited from the struggles of their colleagues.
Camarillo-based Data Exchange Corp., a 21-year-old firm with 450 employees, is contracted by computer manufacturers and high-tech firms for storage, repairs and consulting. Its Web services arm, BidVantage, connects computer buyers and sellers over the Internet, earning money from the margin on deals it brokers. The firm and its on-line arm both found their services were more in demand.
