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Technology Task Force Final Report

C. Recommendations Pertaining to Technology-related Economic Development

Definitions

Definition of High Tech Business

"High-tech" businesses are herein defined as those that are significant users of computing and/or telecommunications technologies or scientific instrumentation; create a high-tech product (e.g., a manufacturer of medical equipment); or which provide a service primarily based on computing and/or telecommunications technologies or scientific instrumentation (e.g., an Internet Service Provider).

Definition of Technology-Intensive, Knowledge-Based Economic Development

For the purpose of this report, technology-intensive, knowledge-based economic development includes businesses or occupations which are primarily concerned with either the development of new technology or the extensive use of high tech equipment and complex processes. Jobs associated with these types of businesses either require a significant amount of creativity or intense training in the application of high tech equipment and complex processes. Workers in these businesses are usually well paid for their creativity, knowledge and application of sophisticated technology.

Recommendation 6
The Task Force recommends that the City of Fullerton create and maintain a database of technology-related businesses in the City to use as a basis for developing business retention, attraction, and assisted growth strategies.

The goal of this recommendation is to assist the City in developing strategies for retaining existing technology-related businesses and attracting and assisting with the growth of new ones. Before attempting to attract or assist such businesses, it is imperative to obtain information regarding the location and nature of existing technology-intensive firms. Fundamental to modern economic development is knowledge of existing industry clusters and supporting firms. By understanding what types of businesses are in the City, the City can formulate targeted strategies for retention and attraction.

The City's current systems do not readily allow analysis of what businesses, by type and location, are located in the City. The City is actively changing its business registration system to a newer one which is based on the new North American Industry Classification System (NAICS) codes rather than the older, more generalized, SIC (Standard Industrial Codes) codes.

At the request of the Task Force, City staff prepared an Assessment of High Tech Business in January 2002. Staff used both the older SIC codes and the new NAICS codes to identify individual businesses listed in the City's business license database. However, upon discussion with the Task Force, it was learned that a number of technology-related businesses were not included in the assessment because their codes were not specific enough. For example, Foxconn, which manufactures computer components, was not included because its code is for Manufacturing, not High Tech.

  1. Using NAICS codes, the City of Fullerton should prepare a more detailed inventory that includes all technology-related and manufacturing businesses in the City.

    The inventory prepared using NAICS codes should include all of these types of businesses, including most manufacturing businesses, in order to obtain a comprehensive appraisal of Fullerton's industrial base.

    Information about technology-related businesses adjacent to Fullerton and elsewhere in North Orange County can be obtained from the Orange County Business Council and should be included in the assessment. This information can be valuable in determining the distribution of different types of high-tech business clusters around Fullerton. These data will be important in determining what types of high tech and knowledge-based businesses to target for economic development.

  2. The City of Fullerton should use its GIS capability to graphically display the distribution of high tech businesses in Fullerton on its website and offer dynamic interaction with the data.

    Graphically providing information on the Internet about Fullerton businesses offers a means for both the City and external personnel to view the distribution of businesses and obtain significant information about them. Businesses seeking to relocate often make their initial search via the Internet. Providing searchable information on the City's website about current businesses, land availability, commercial office and industrial space, city amenities, etc. within a geographic framework reduces the search time, provides a competitive advantage, and demonstrates that the City is "tech-savvy".

    Information about business types and locations should be updated at least every six months. If the business registration database is linked to the GIS display, the updates will be virtually instantaneous.

Recommendation 7
The Task Force recommends that the City of Fullerton conduct a Needs Assessment with its existing major technology and knowledge-based businesses and institutions. The Needs Assessment should include a survey of the projected growth and economic development requirements of existing businesses and institutions.

The goal of this recommendation is to improve the retention of existing high tech businesses and increase the attractiveness of the City to new ones. Retaining existing businesses that are deemed to be a significant benefit to the community can be far less expensive than attracting similar new businesses.

Because it is important to maintain ongoing intelligence about what City attributes/services are most important to businesses as they plan to expand or locate in Fullerton, the Needs Assessment should be conducted every 2-3 years. High-tech businesses may have requirements or interests that are particular to them as a segment. These requirements may be related to technology infrastructure, access to an educated workforce, or amenities such as transportation, restaurants, etc.

Several techniques can be used for the assessments. Some utilize technology (e.g. online surveys), but assessments can also be done via face-to-face visits with business owners and via mailings. CSUF and the NOCCCD are skilled at preparing and conducting these types of assessments and might be contracted for this work.

Recommendation 8

The Task Force recommends that the City of Fullerton implement processes to attract and assist the growth of technology-related businesses which complement the economic goals of the City.

Based on the City's strategic plan and statement of public policy regarding the role of technology in the City, the City should determine what types of businesses it wants to attract and make an intentional effort to attract the targeted firms.

  1. The City of Fullerton should prepare a list of technology-intensive businesses that might find Fullerton attractive and target them for economic development. The list should be generated in consultation with community business groups and especially with educational institutions that may offer special educational programs.

    A few of the high tech and knowledge-based industries that the Task Force believes are compatible with the Fullerton community and might be developed within or attracted to the City are: high tech design firms (web design/hosting, game design, architectural design, landscape design), multi-media, digital animation and special effects, film post-production, software development, engineering, medical device and telemedicine development, alternate energy, telecom service, and GIS service.

  2. The City of Fullerton should create a Community Resource Team (CRT) to provide support for targeted, technology-related businesses.

    The CRT is envisioned as being a one-stop resource that will make it easier to induce targeted businesses to locate in Fullerton. It should be viewed as giving Fullerton a competitive advantage. In addition to personnel from the City departments involved in assisting businesses to relocate to Fullerton, the CRT should include persons from other entities which could provide support and information to the new or relocating business. Specific people in each entity should be identified and assigned to the targeted business.

    CRT members should be prepared to make referrals to other community resources such as venture capitalists, commercial real estate agents, educational programs, and other technology businesses that may be involved in attracting and supporting technology-based businesses. The purpose and organization of the CRT should be displayed on the City's website. The City should make it possible for potential new businesses to access CRT members and relevant information for new businesses via the Internet.

  3. The City of Fullerton should develop marketing strategies that target the desired businesses.

    Attracting or promoting the development of new, technology-intensive, knowledge-based businesses requires an intentional effort to identify and understand the needs of the target market. In addition, "word-of-mouth" or personal contact is one of the most powerful strategies in marketing to creative, knowledge workers.

    For each targeted industry, an ad hoc advisory or focus group from within that existing or related Fullerton business community should be established. Its purpose would be to assist the City in developing strategies for attracting or encouraging the development of similar targeted businesses.

    Any marketing plan should be in synch with and leveraged by the efforts of the Fullerton Business Council, the Chamber of Commerce, CSUF, NOCCCD, and current business owners. The marketing plan should contain criteria for measuring its effectiveness and success.

  4. The City of Fullerton should evaluate and modify its zoning ordinances to address the special needs of small start-up companies and identify areas for mixed-use, live-work redevelopment.

    Fullerton may initially have more success in attracting new technology firms by nurturing small start-up companies than by attempting to convince large technology corporations to relocate to the City. Large technology corporations tend to desire a city with a recognizable name, an established base of existing technology companies, and modern industrial parks with vacant land and/or appropriate buildings. This type of industrial base has greatly diminished in Fullerton over the past decade.

    Start-up companies, on the other hand, look for low-cost, creative environments that provide them with competitive advantages against larger rivals. Employees with small technology start-up companies place a premium on quality of life amenities. Fullerton already offers strong quality-of-life benefits such as a community atmosphere, cultural events, interesting restaurants, strong educational institutions and an educated labor pool.

    By modifying zoning ordinances, Fullerton can position itself as a hub for technology start-ups in Orange County. Because home-based businesses cannot have employees on the premises, mixed-use zoning in industrial districts should be considered so that live-work spaces may be developed. Such live-work spaces have been successful in the revitalization of the central business districts and older industrial areas of several California cities.

    Typically, warehouses in industrial districts are converted into low cost rental units in which individuals live and from which they may operate a full-fledged business. This gives the start-up company tremendous cost-saving advantages and has a synergistic effect as multiple start-up companies cluster together in a particular warehouse district. Such clustering would also have the effect of branding Fullerton as a creative, technology-friendly city. Lastly the City should identify areas in which such live-work redevelopment could occur and help bring together property owners, developers, and potential tenants.

Recommendation 9
The Task Force recommends that the City of Fullerton develop specific alliances with its educational institutions such as California State University at Fullerton and the North Orange County Community College District to promote the development and addition of technology-related businesses in Fullerton.

California State University at Fullerton and the North Orange County Community College District are major resources for economic development in the City. Discussions should be undertaken with these institutions to identify existing and potential programs and services (e.g., distance learning, training, and internships) that can be developed to assist in attracting and establishing targeted high tech businesses.

Both CSUF and NOCCCD have programs that are conducive to the development of "home-grown" technology and knowledge-based businesses. However, graduates of these programs often leave the area to find employment elsewhere. The City should identify current programs (e.g., Dan Black program at CSUF, the Center for the Study of Emerging Markets at CSUF, and the Center for Applied Competitive Technologies at NOCCCD) at both institutions, which are related to the development and support of new businesses. Program participants should be surveyed to determine what the City can do to develop an environment that is conducive to the establishment of new knowledge-based businesses in Fullerton.

The City should encourage CSUF to create a Small Business Development Center (SBDC). According to one of the Task Force members who works for USC and the Central Los Angeles SBDC, an SBDC at Cal State could be a great addition to Fullerton. The new focus for SBDCs is high tech. An SBDC provides a wide range of services to businesses at no cost. Included in the services are assistance with business plans, export sales, planning financial packages, assistance with business loan applications, marketing and overall business assistance. The SBDC agency has expressed an interest in forming a partnership with Cal State.

Some Cal State Universities such as Northridge and Cal Poly Pomona have even created business incubators that support the development of specific types of new technology businesses.

Recommendation 10
The Task Force recommends that the City of Fullerton view Downtown Fullerton as a prime area for locating small technology-intensive, knowledge-based firms, such as high tech design firms. The City should promote the addition of infrastructure and amenities that will increase the attractiveness of the Downtown to these types of firms.

Joel Kotkin in his book, The New Geography, has documented that young, creative knowledge workers today are attracted to the ambience of older city centers where they can both live and work and find the quality of life that they desire. Downtown Pasadena and San Francisco south of Market are prime examples of this trend. Thus it should be possible to make Downtown Fullerton and the surrounding area especially attractive to young professionals who seek an environment that includes very high-speed wireless and wired telecom infrastructure, live-work space, cultural events, and interesting restaurants and retail outlets. With appropriate planning and promotion the Downtown area could probably become a center for high tech design, graphic arts, multi-media, software, and high tech service companies.

The Downtown area already has many of the amenities such as restaurants, ready access to regional transportation, and entertainment venues that are attractive to young, creative, knowledge workers. However, although at least four carriers have high-speed fiber optic lines running through Downtown Fullerton (see map, Figure 1), there are apparently no buildings connected to them and there is no high-speed wireless access to the Internet. At this time there are also only a few specialty retail shops and no live-work spaces, although the City is attempting to attract the former and there is space in the vicinity of the railroad tracks for the latter

The Downtown does, however, have a nascent collection of high tech design firms. The Aura Group, located above the Rockin' Taco Cantina, is a multi-media company, web hosting/design firms are located in the Chapman Building and several other design firms are located in buildings along Harbor and Wilshire.

Next Section: TASK FORCE RECOMMENDATIONS: D. Recommendations Pertaining to E-Government Services

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