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Study Says Tech Corridor Should Concentrate on P.R.

The Los Angeles tech corridor, concentrated along the Ventura (101) Freeway from the West San Fernando Valley to eastern Ventura County, is one of the 50 fastest-growing technology regions in the nation. But few people know it, according to a study to be released July 24 by the Los Angeles Regional Technology Alliance. The study paints a picture of a loosely knit community that has grown dramatically in the past decade as business people involved in the defense and aerospace industries formed start-up companies geared at the private sector rather than the government. But the area has done little to promote itself, and has trouble attracting the best workers because many don’t want to live in the region. One key achievement of the study, according to LARTA officials, is that it quantifies for the first time the concentration of high-tech workers employed on the corridor. “We also weren’t aware of the diversity in the area, that there were companies across all technology areas,” said K. Lynn Ferris, program associate at LARTA, who compiled the study. The study, conducted from fall 1999 to June 2000, gives one of the first complete glimpses of the technology corridor. While the tech corridor is generally known as the area paralleling the Ventura (101) Freeway from Woodland Hills to Camarillo, the study looked at a much broader area. Its study area extended east to Glendale and north to the Ronald Reagan (118) Freeway. LARTA found that tech workers account for 12.4 percent of the non-farm workforce in that “corridor” area. That compares with 4.7 percent in all of Los Angeles County and 20.5 percent in Santa Clara County (the Silicon Valley heartland with the highest tech concentration in the state). While L.A.’s tech corridor admittedly has a way to go before rivaling Silicon Valley, it already has five of the 20 fastest-growing tech communities in the state (Chatsworth at No. 5, Camarillo at No. 10, Calabasas at 13, Burbank at 14 and Woodland Hills at 18). And of the 50 fastest-growing companies in Southern California, 19 are located in the tech corridor area. But the LARTA study found the area has no identity beyond its boundaries, as businesses in the area are all too aware. “People hear so much about the Silicon Valley, they think this area is not known for high tech,” said Suresh Nihalani, president of Moorpark-based Accelerated Networks Inc. “As more companies in the area become success stories, the area will gain visibility. We’re already seeing more and more of that with Xylan (a major Calabasas-based tech subsidiary of French telecom giant Alcatel) and Accelerated Networks.” LARTA recommends a more concerted effort on the part of local businesses to promote the region. Suresh agreed that he would like to see more joint efforts by tech companies along the corridor to market the area. Although there are already a number of networking organizations for local businesses, Suresh doesn’t believe they are active enough in creating a recognizable identity for the tech corridor. The biggest complaint from businesses in the area is a lack of access to capital, the study found. Venture funding in the corridor has fluctuated over the last four years. In 1997, area companies received $189 million in venture funding, 28 percent of the total funding given to Southern California companies. But in 1998, that dropped to $126 million, or 16 percent of total funding in the region. In 1999, the area received a whopping $279 million in funding but that was still only 12 percent of the total given in Southern California. The study also found through a survey of company executives that the region has had trouble attracting employees, because of its isolation from other parts of Los Angeles County and the fact that comparatively few workers want to live there. It is especially difficult to lure younger workers from other parts of Los Angeles, such as the Westside or South Bay. “People with that kind of life didn’t seem ready to settle down to Valley life,” Ferris said. The tech corridor’s dramatic growth has also put a burden on area roadways, adding thousands of cars to side streets and to the Ventura Freeway, the only major transit corridor through the area. Businesses complain of a lack of travel options: Burbank Airport has few flights that go beyond the Western states and LAX is a two-hour drive away when traffic is factored in. Some business owners say they favor development of a regional airport in Oxnard or Camarillo to ease travel in and out of the area.

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