When it comes to dynamic, fast-growing private companies, Northern California seems to grab all the attention. But those are precisely the kinds of enterprises that comprise the backbone of the economy right here in Los Angeles.

Some 95 percent of the approximately 272,000 business establishments in L.A. County have fewer than 50 employees, and 97 percent have fewer than 100 workers, according to the state Employment Development Department roughly the same percentage as in Santa Clara County.

The difference, according to local business experts, is that L.A.’s business base is considerably more diverse.

“If you think about the structures of business in Southern California, we are not dominated by large, old bureaucratic corporations. We are not dominated by Fortune 500 companies,” said Michael Duffy, vice dean of graduate programs at the University of Southern California’s Marshall School of Business. “We are home to innovative companies, energetic companies, biotech, medical services, software. And the entertainment industry is largely populated by small companies that are quite entrepreneurial.”

But the region’s thriving private-sector economy of manufacturing and service companies nonetheless remains an unknown quantity, said David Friedman, a California economics writer and attorney.

No data exist on the number of privately held companies in Los Angeles. But Friedman conducted a study four years ago that focused on such sectors as electronics, biotech, textiles, aerospace subcontracting and film-industry subcontracting. He uncovered a rich mosaic of firms, most of them unknown and many of them in the industries that helped lead L.A. out of the recession.

“What we almost universally discovered were a lot more companies out there doing things nobody knew anything about. They didn’t appear on any databases,” Friedman said.

The firms included a Pacoima manufacturer of automated welding devices for piping; a Torrance firm that is the world’s leading producer of a turbine that increases the yield of an oil well; and a $300 million firm that prints and dyes textiles.

Yet the Silicon Valley attracts more attention not to mention more venture capital because of the area’s preponderance of high-profile technology firms.

“We have more egalitarian and multifaceted industries,” Friedman said.

Stephen Levy, director of the Center for the Continuing Study of the California Economy in Palo Alto, agreed. While the Bay Area has significant diversity within its tech-heavy economy, the region’s overwhelming reliance on technology has increased its vulnerability to the vagaries of the world economy, he said.

The Silicon Valley, for example, has been hit much harder by the Asian financial crisis than Los Angeles.

Since January, San Jose has added all of 400 jobs and San Francisco 5,500, whereas L.A. has added 31,000 jobs, said Ross DeVol, director of regional studies for the Milken Institute.

Southern California, meanwhile, has a more diverse manufacturing base, with a particularly strong presence in textiles, apparel and toy manufacturing. “It’s shown it can compete in (those) older industries, when other regions are losing jobs. That’s the strength of Southern California,” Levy said.

The abundance of smaller, privately held firms in L.A. is based on several inherent strengths of the L.A. region, including its proximity to markets in Asia and Mexico.

“We have a great port and we’re close to Mexico, where a lot of production is going on,” Duffy said. “Until the recent Asian crisis, we’ve had a tremendous inflow of capital of Asian people who have moved here and started new businesses.”

The L.A. area’s huge, $400 billion economy enables a plethora of small businesses to thrive by providing a huge local market and clusters of industries that spawn numerous off-shoot businesses, said Nitin Bhatt, interim director of the USC Business Expansion Network, which provides technical assistance to entrepreneurs.

Another trend creating more business opportunities is the region’s burgeoning Latino population, Bhatt said. “There’s going to be a change in preferences, in grocery stores, apparel,” he said.

Still, with market volatility and a huge question mark hanging over Asia, observers say some caution is in order. “Growth rates of the past are unlikely to continue,” said William Gartner, professor of entrepreneurship at USC.

And if the local economy heads into another recession, Friedman worries that local leaders will again focus on the big, high-profile corporations to lead the way out, rather than investing in the smaller players.

“The fact is, we’ve done almost nothing to overcome our lack of information about (the varieties of) industry,” Friedman said. “We could be back there again quickly. Things go sour and people will focus on one or two visible sectors and a lot of opportunities will be lost.”