County may rank No. 3 in the US in high-tech field
Costa Mesa, Calif.
If you've been unaware that Orange County makes a reasonable claim to being the No. 3 high-tech belt in the country, don't feel too bad.
Donald F. Brosnan didn't know it either until a few years ago, and he's president and chief operating officer of one of the biggest electronics firms here.
When this Massachusetts native and 18-year Honeywell veteran came from Boston in 1976, ''I knew nothing of the high tech that was out here. This area doesn't get the visibility of other places. . . . But pound for pound, this is a better high-tech environment. . . . There's more broadly based computer power here than in any other part of the country.''
As the electronics industry has grown out from around California's ''Silicon Valley'' and Boston's Route 128, a number of second-tier high-tech centers have found their place in the sun: Austin, Tucson, Colorado Springs, the Research Triangle of North Carolina.
But these second-tier cities are largely sites for manufacturing plants or research and development units. They draw ''name'' firms but the headquarters address is elsewhere.
Orange County, on the other hand, is not big in main-frame computers or semiconductor production - although those fields are represented. Its forte is small and medium-sized companies run by the people who founded them. They aren't names most people recognize. But a lot of midgets pulling together can equal the strength of a giant.
As one local resident put it to me, ''There's a lot of 'ics' around here.'' They're spread all around the country; though being newer firms, they seem to predominate in the office and industrial parks of the newer, more southerly parts of the county. (The larger, older defense-related firms tend to be closer to Los Angeles.)
''In Silicon Valley and other places, they make chips,'' says Mr. Brosnan. ''Orange County is where the chips are applied.''
Brosnan's point is illustrated by his own firm, MSI Data Corporation. It's the world's largest producer of hand-held data-entry systems. These devices range from the size of a pocket calculator to about that of a small cassette tape player. They are used by retail clerks taking inventory, for example - the clerk just counts how many cans of fancy tomatoes or diced carrots or whatever are on the shelf, and punches the numbers in.
There's even one system called the Route Manager, which contains a hand-held computer and a printer in a special ''briefcase.'' This system enables sales people to write up an order and produce a printed invoice within a matter of seconds on the spot. These systems help workers do their jobs better, faster, more simply, and with fewer errors.
Like many successful firms, MSI started by finding a specific need to fill. When the firm was getting off the ground in 1967, founder and chairman William J. Bowers and his associates discovered that retail stores needed better methods of taking inventory and reordering stock. The market was so eager for any sort of device that would help that MSI sold 8,000 of their first model - even though it had to be mounted on a pushcart and was powered by an automobile battery.
Since then, MSI has followed the electronic path to a smaller, smarter, and cheaper product; today the company's motto is ''We put computing in the palm of your hand.''
The firm enjoys a market share of some 50 percent, with annual sales of $55 million. Messrs. Bowers and Brosnan are aiming for the ''major leagues'' of $100 million sales. MSI is being hit by the recession, however; many businesses can't afford to make capital investments now.
Things have been fairly soft lately, for MSI as for much of the high tech industry in Orange County. But Brosnan has high hopes for the last six months of the fiscal year ending March 31. One bright light of the first quarter was a $2 million sale of advanced terminals, associated equipment, and software for a chain-wide order-entry system to Eckerd Drug, a major Sunbelt chain.
MSI is typical of Orange County computer-applications firms; it contracts out its tooling and buys circuit boards from other manufacturers. ''We assemble, integrate, test, and ship,'' says Brosnan.
Since electronics firms tend to propagate like coat hangers, it would seem the high-tech industry has found a natural home in Orange County's entrepreneurial environment.
Orange County is an entrepreneurial hotbed, despite a relative scarcity of venture capital up to now. ''This area is full of one-man firms supported by moonlighters,'' as one observer puts it.
Some of the high-tech companies in Orange County find what would seem to be rather highly specialized niches for themselves. Odetics Inc., based in Anaheim claims to be ''the world's leading supplier of space-borne tape recorders,'' for instance.
High-tech centers, even of the ''second-tier'' sort, have been closely tied over the years to universities. Asked to evaluate the academic resources of Orange County, Mr. Brosnan chooses his words carefully. The University of California at Irvine is an ''increasing good resource,'' he says. ''They have a good program in computers and engineering. They're trying to do more in the technical areas. But they're no MIT, Harvard, or Tufts. . . .''
And very few places are, some would respond. The Irvine campus isn't the only institution in the area, either. There's California State at Fullerton, and of course a host of good schools in the Los Angeles area.
Electronics is not all there is to high-tech industry in Orange County. The pharmaceuticals and health-care industries loom large. Fullerton-based Beckman Instruments Inc. is one of the ''granddaddies of high tech'' in Orange County, says Donald A. Strauss, company vice-president for adminstration. Recently merged with SmithKline, this firm is strong on scientific instruments and devices used in hospital laboratories. The scientific instruments side of the business is rather static, given the recession, but the health-care side is adding some 200,000 square feet of factory space.
Real estate prices and other costs have prompted many firms to leave Orange County or expand elsewhere. MSI, however, has room to expand on its present Costa Mesa site, and the firm has had no trouble drawing employees, even for its manufacturing jobs, Mr. Brosnan says. MSI employs some 550 persons in Orange County, plus another 350 sales and service staff in the field.
''We looked at other places, but then decided the economic equation was favorable to stay here,'' he says.
Not every firm is able to come to this conclusion, particularly not with its manufacturing operation.
But Tom Self, bullish observer of the county's business scene from his Newport Beach editorial perch at The Executive magazine, predicts that even if firms do leave, more firms will be launched to take their place.