Massive adjustments in the world economy have filtered down to businesses large and small over the past 20 years. Now even small businesses compete on a global level, and large companies must be flexible enough to fend off much smaller rivals. With the positives come the hassles more lawsuits, more regulations, and in the post-9/11 world, more security concerns. The Business Journal asked a handful of business veterans about some of the biggest changes.
Rocky Solotoff
Owner and Founder
Toonmakers Inc. animation studio
“Offshore labor has had a huge impact over the last two decades. We maintain a studio in Seoul, South Korea, where costs are obviously much cheaper. We also work with a studio in Brisbane, Australia. Doing this allows us to maintain a high level of quality while still beating the in-house price of a large company like Disney or Sony. This is a trend that began in the early ’80s, maybe even before that. First it was Japan, then Seoul, now it’s Manila.
“We’ll get up at 6 in the morning to service a commercial we’re doing for Colgate, which is based in New York. At 7 in the evening, we get a call from Korea where the work is being done. At 8 in the evening our guys in Burbank have gone home and Australia is just beginning their day. Depending on budget and schedule I can work 24 hours a day, seven days a week.
“We’ll hire work out of Amsterdam, Korea, China, Japan, even Chile, depending on what the project demands. That international approach to the pipeline has dramatically increased since we first started. Everyone wants it cheaper and faster, but with that same ‘Disney quality’ that is the buzzword for the animation industry.
“The 818 area code is still known as animation alley. There are wonderful studios up north Pixar and Lucasfilm, most notably. But the bulk of all animation produced in the U.S. comes out of Los Angeles. So the stories and ideas originate here, and then the work is done all over the world.”
Timothy Lappen
Chairman, Family Office Practice Group
Jeffer Mangels Butler & Marmaro LLP
“The legal industry has been impacted dramatically by technology. Things we take for granted now like voice mail and e-mail were not around 20 years ago. The use of computers allows each deal to be as good or better than the last one you did. You can set up a computerized template for an estate plan and account for every possible variable over the course of that deal. We could never be that specific or efficient two decades ago.
“The standard of work is far higher than it’s ever been. Using search engines like LexisNexis, attorneys can be extremely specific in doing research. Access to more information has certainly raised the bar across our entire industry.
“The way people move around is different than it was 20 years ago. Attorneys stayed with the same firm for many years, and their clients stayed there with them. In recent years we’ve seen firms consolidate, merge, break apart; it’s common for lawyers to move among five, six, seven different firms in a matter of years. Specialization has also taken over the legal industry and clients now want an attorney with very specific experience to do exactly what needs to be done all the time.”
Linda LoRe
Chairman and Chief Executive
Frederick’s of Hollywood
“The biggest change is a shift in demographics and populations. There’s been a large influx of people into the state since the early ’90s, and Los Angeles in particular. Populations have shifted toward Latinos, Eastern Europeans and many other different groups. It’s changed the labor pool and our customer base, and created market segmentation. At the same time there’s been an explosion in offshore manufacturing, particularly in Asia.
“The challenge is keeping up with the changing attitudes of our customers. This influx and blending of cultures is making Los Angeles a very dynamic and exciting place to sell retail. But it’s also an extremely difficult one from a marketing standpoint. Latino buyers do not necessarily want the same specialty items as Asian buyers, who want something different from Eastern European or Russian buyers. These are all different cultures with different fashion tastes.
“The population will eventually blend out and there will be a mixture of consumers that we are, basically, keeping our eye on all the time. Retailers will have to be much sharper in assessing where the customer is going and how to deliver that product to fit their exact needs.”
James Flanigan
Business Columnist
Los Angeles Times
“The shift to small business owners is the biggest change. The so-called committee of 25 that once controlled L.A.’s business leadership, including the people who owned the Times, had waned by the mid-’80s, but there was no distinct model as to what would replace their influence. The end of the Cold War and a recession at the start of the ’90s put the defense industry into decline; the riots in 1992 forced city government to respond to small business owners, which heretofore had flown pretty much under the radar.
“If any region in the world has benefited from globalization it’s Los Angeles. Foreign trade is probably our leading source of employment. Half of the freight that comes in stays in Los Angeles, the rest is shipped via rail or trucks all over North America. The move toward a global economy has had a huge impact on the growth of L.A. industry.”
