Widening The Net

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When they needed to find tenants for empty offices in the past, administrators at the Business Technology Center of Los Angeles County turned mostly to local startups. Now, they’re looking overseas.

Next month a Japanese technology company will move into the center’s Altadena building, an incubator for technology companies. It will be the first foreign tenant brought in under a new effort to persuade promising international companies to set up shop in this small community north of Pasadena.

County officials hope such tenants bring new technologies, homegrown talent and jobs. In exchange, they offer office space in the state’s largest high-tech incubator, plus an extensive network of business mentors and venture capitalists, and perhaps most important, a doorway to the much coveted U.S. market.

“The phrase I like to use is in-sourcing,” said Mark Lieberman, manager for regional economic development at L.A. County’s Community Development Commission, which oversees the incubator. “We’re bringing in the Ph.D.s, the brain power, the technologies. And we’re going to grow these companies here.”

The incoming Japanese software company, Net Dimension Corp., specializes in 3-D images, and is arriving as part of an agreement between incubator officials and the Japanese External Trade Organization. Per the agreement, Jetro, which is a Japanese government program, will pay Net Dimension’s rent at the incubator for six to 12 months.

Net Dimension initially will send just one employee to the incubator. The company then plans to hire locally, including someone to head its U.S. operations, said Stan Tomsic, the center’s administrator.

County officials hope Net Dimension is just the first in a series of foreign tenants to move to the center, which is 70 percent occupied. Last month, the Korean Trade-Investment Promotion Agency said two or three Korean companies will move to the incubator by summer. Similar agreements could soon be in the works with governments and trade groups from Australia, New Zealand and the United Kingdom.

Foreign technology companies are generally enthusiastic about moving to Los Angeles because they could sell their services to entertainment companies based here, and mine clients and employees from the strong local tech community.

David Jung, a trade consultant at the L.A. office of Kotra, said he regularly fields inquiries from Korean tech companies and other types of businesses interested in moving to or opening offices in Los Angeles, which has the world’s largest Korean population outside of the Korean peninsula.


‘Unique market’

“The United States is a unique market,” Jung said. “People think if you could succeed in the United States, you could succeed anywhere around the world.”

Incubators at sites across the country such as Maryland, Virginia and North Dakota, among others have brought in foreign tenants with mixed results. While it’s easy to find companies that want to move to the United States, it’s more difficult to find incubators that can help grow their business once they’re here, said Dinah Adkins, chief executive of the non-profit National Business Incubation Association.

“There are always people around who can help with visa assistance, renting a car, things like that,” Adkins said. “But when you talk about actually putting a person in contact with the large companies that can negotiate deals, it requires some real superior contacts and research.”

Tomsic seems energized by the challenge of bringing in foreign companies. Since the county established it 10 years ago, the incubator has built a long list of contacts in fields ranging from accounting to law that advise tenants, often free of charge.

“We have all kinds of experts with all kinds of experience,” he said.

A few miles from the Foothill (210) Freeway, the two-story Business Technology Center is in a quiet neighborhood that’s in transformation. Down the street, there’s a gleaming office complex and a 24 Hour Fitness Center sponsored by Earvin “Magic” Johnson, but on the other side of the incubator sits an abandoned thrift store with darkened windows and a dilapidated yard.

Behind the incubator’s off-white walls and teal-tinted windows, 19 companies occupy 40,000 square feet of offices. Some of the companies have dozens of employees; others have just two.

The county rents space to incubator tenants at below-market rates, and also provides supplies and office services at a reduced cost. In return, the center gets warrants options on shares in the company at a fixed rate in tenant companies for each year they are there, Lieberman said.

Tomsic, who runs the incubator’s day-to-day operations with three other county staff workers, is enjoying his new role of business diplomat for the county. In the past few months, he’s met with delegations from China and Sweden, with groups from Israel and India scheduled soon.

A red and gold Chinese charm for prosperity, a gift from that country’s recent delegation, is hanging from a corner of a portrait in Tomsic’s office, a sign of what he hopes are things to come.

“Hopefully, it brings us luck,” he said.

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