An amalgam of technology, entertainment and fashion will define the global economy of the 21st century, and if Southern Californians play their cards right the region stands to benefit more than any other part of the country.
That's the conclusion of a report due out this week by Pepperdine University fellow Joel Kotkin, and sponsored by several local companies and economic development organizations.
It is a thesis that rings true in L.A.'s business community.
"If you look at both tech and entertainment firms they each basically split between infrastructure and content," said Ivan Nikkhoo, a partner at Internet consulting firm Vertex Systems Inc. "A lot of the brainpower for both of those (categories) is right here."
Kotkin's report draws on the thinking of futurists like Alvin and Heidi Toffler and Japanese economist Taichi Sakaiya to assert that the world's economy is inexorably shifting toward one based on a convergence of "soft" and "hard" sciences, and dependent on so-called "knowledge value." (Knowledge value is the ability of companies, even regions, to incorporate cultural knowledge, design distinctiveness and fashionability into products or services.)
The importance of such technology-with-style will create dramatic growth in demand for software developers, other computer scientists, and entertainment professionals. And that, Kotkin believes, will place Southern California in a dominant position.
"No region is better positioned to garner a larger portion of this surging high-wage employment than Southern California," Kotkin writes. "The region enjoys an unparalleled opportunity to reap the greatest benefit from this epochal economic change if it can overcome some daunting obstacles."
Those hurdles include competition from other localities, and internal weaknesses, such as poor networking between diverse information-age industries, a shaky educational system and in a theme Kotkin returns to again and again a lousy image.
Unless Angelenos retaliate with aggressive marketing, he believes, nascent industries here will whither on the vine.
"The determined marketing by other regions and of the lack of the same here could have greater impact on newer, less-rooted industries such as multimedia," he said.
While naysayers locally and abroad have twice predicted the demise of L.A.'s technology industry once after World War II and again at the end of the Cold War in the early 1990s L.A. firms keep coming back, Kotkin writes.
Yet "the devastation wrought by the defense build-down did leave a lasting impression in many minds both outside and inside the region that Southern California had become a technological laggard," he writes.
In fact, the opposite is true, he asserts.
Kotkin points to the area's nearly 140,000 engineers, mathematicians, computer scientists and natural scientists as a resource the area should rely on to accommodate its shift toward the new economy. By comparison, the entire state of Texas has just 122,000 similarly trained people, while New York state barely breaks the 100,000 mark.
While Kotkin argues that L.A. possesses a population heavy with techno-savvy people, there are others in the business community who disagree.
Bill Manassero, director of the Software Council of Southern California, has long complained of a shortage of software developers in the region.
"One thing that surprises (foreigners who come to L.A. to conduct technology deals) is that we have a shortage of talent in terms of basic development," Manassero said. "They probably think there's a vast technology talent pool here, but at this point all I can say is we could certainly use it."
Kotkin counters that the region's preeminence lies in the "soft," culturally oriented side of the information age equation, which, he says, has only been growing in recent years.
The number of people employed in the film and television industries in L.A. County stands at about 224,000, an increase of 40,000 jobs in the last five years alone. Another 14,000 jobs, Kotkin says, will be added this year.
To capitalize on its strengths, Southern California needs to marshal its forces for the coming century, Kotkin argues.
Primary education is a problem. While local universities place Southern California at the front of the pack of cities with degree-holders, the region lags behind much of the country in the performance of youngsters. Los Angeles is second only to New York in its percentage of residents with less than a high school education.
Not only should Southern California schools improve on their teaching of young students, they should be teaching students technology-based skills, he believes.
That view is shared by others in the entertainment-technology sector.
"Our ideal person is someone who's very strong in math or engineering or technology," plus artistic skills, according to John Hughes, founder and president of the Mar Vista CD-ROM production firm Rhythm and Hues.
Next, Kotkin says, is getting technology workers to talk with each other. Concentrations of techies from different industries can be found in the Glendale/Burbank area for animation, in Santa Monica for digital entertainment, and in Orange County's Irvine for software. But for the most part, Kotkin says, these industry islands don't mingle. Getting them to do that, through business clubs and networking associations, is key.
Finally, cities throughout the greater L.A. region must slash the bureaucratic red tape that technology firms must wade through to get started.
Some economic observers say what Los Angeles needs is not more studies, but action.
"I'm tired of reports. Large tracts of forests have sacrificed their lives for all these damn studies but (eventually) you have to move on the proposals," said Jack Kyser, chief economist of the Economic Development Corp. of Los Angeles County.
That's a position with which Kotkin himself agrees.
"What we want is to get business and government decision makers to say, 'Hmm. What do we need to do about these issues? Is there something we need to do about venture capital? Are there things we need to do for the infrastructure?'
"I think people in L.A have to realize what they have," Kotkin said, "and what they have to lose.
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