NEW VALLEY 105
A Silicon Future?


This program is brought to you through the generous support of viewers like you.

Presentation of New Valley is made possible by Intel Corporation -- taking a leadership role in bringing citizens, business and government together, to examine the impact of growth in the Central Valley.

And by U.S. Home, committed to developing a positive future where we live and work by promoting responsible growth, and preservation of our quality of life.

And by the air districts of the Sacramento and San Joaquin Valleys.

 

A report from the Great Valley Center titled "New Valley Connexions" states: "If it fails to embrace the new economy values of speed, knowledge, and innovation, the valley runs the risk of losing its youth and core industries to the new economy centers in California and the world." From the U.S. Trade and Commerce Agency came this: "High technology will continue to be a driving force in California's economy." And from the Fresno Business Council: "Technology is leveling old barriers to prosperity, geography, language, time and education." It's apparent that horizons are changing in the valley when it comes to who will be doing business and what kind of business will be conducted in the Central Valley of the future. These future prospects are being met with anticipation and concern. Anticipation of a new era of growth and prosperity pinned to the promise of innovative technologies, coupled with concerns that the Central Valley's future may go the way of Silicon Valley where swift, untamed growth led to overcrowding, traffic congestion, and bad air -- and reached critical mass when its economy overheated. Welcome to the New Valley. Is there silicon in our future?


In its 2001 rankings, Forbes Magazine placed the Sacramento region 11th out of the top 200 metropolitan areas in their annual listing of "Best Places To Do Business." Yuba City ranked 11th among 94 smaller communities in the same category.

Their criteria for placement of these rankings is based on job growth, earned income, and "…activity in critical technologies that foster future growth."

Is the Central Valley undergoing a major "makeover?" Are traditional businesses that launched California to the forefront of agricultural abundance being overshadowed by a new "high tech" revolution? The names of "Hewlett-Packard" and "Earthlink" are as noticeable these days as "Monsanto" and "Del Monte".

Clare Emerson, Executive Difrector, American Electronics Association -- Sacramento Council: "We've seen this happen in the Bay Area and now we're seeing it happen here, and because these large giants have moved in and staked such a claim in our region -- it's on that basis I think that every economic indication is so strong -- that we have one of the fastest growing hi-tech regions in the state of California."

According to the Sacramento Business Journal the number of hi-tech companies in the Sacramento region jumped from 236 in 1996 to 714 in 2001.

Clare Emerson: "We have a lot of software development companies. We have a lot of hardware development companies. We have peripheral companies. Those are companies that make products that bolt on to hardware products. We have a lot of companies coming in and making the components that go into, like Hewlett-Packard…the products that they build. So we have a broad range of technology companies."

Perhaps it was inevitable that the technological revolution would eventually catch up to the Central Valley. In the path of the population explosion, the expansion into new business and manufacturing opportunities seems a certainty. The rate of hi-tech expansion in the Sacramento region -- which encompasses El Dorado, Placer, and Sacramento counties -- is impressive. According to the A.E.A. and the U.S. Bureau of Labor Statistics, it now ranks 5th in the nation in the rate of high-tech job growth. They base that ranking on issues such as "lower cost of living" and the number of technology-based businesses coming into the area. Our proximity to Silicon Valley is also a factor.

Clare Emerson: "We see both. We see a lot of workers from the bay area relocating their families here -- especially out in the Placer County, El Dorado County areas. And we see a lot of people driving here to work because they can't find a job there."

Just as with agriculture, diversity appears to be the key to survival in the world of high tech. If one lesson was learned from the hit that shook Silicon Valley, it was that one. Business leaders in the Central Valley have apparently taken that lesson to heart.

Ed Graves, Placer County Director of Economic Development: "I think that bodes very well for the Sacramento region. Because not only do we have a good, strong government base; we've got a good strong industrial base with high tech industries, as well as a number of other businesses."

Does that diversity make the Central Valley tech industry recession proof?

Ed Graves: "The great news has been for us that in past recessions, about the past three or four, Placer County has ended up in a recession about six months after the Bay Area went into one. And that has not happened this time."

Clare Emerson: "I think our companies in this region will continue to grow and flourish. The strong will survive; those that can't, will not. And we are looking forward to a great year. We have members who have experienced their best fourth quarter finishes ever."

It's not gold fever but the rush is on in Placer County to make it the Mecca for the silicon boom that is now brewing in the Central Valley.


One of the first high tech companies to discover the gold of Placer County was Hewlett Packard, opening its Roseville campus in the 1970s. That started a rush that shows no signs of letting up. Interestingly enough, one reason HP chose Roseville is that the area isn't prone to earthquakes.

Ken Larson, Hewlett-Packard Spokesperson: "In our manufacturing processes and R and D processes, we use a lot of very fine instrumentation and if it bounces around that tends to not be good for it."

HP also wanted to locate in South Placer because it saw potential. The unemployment rate at that time was 13 percent -- a full ten percent higher than in 2001. The company felt that by working with the area schools it could make some dynamic changes in the economic vitality of the region.

Ken Larson: "And now what we have is we have probably the most diverse site, in terms of the businesses, of any HP site in the world. In fact, this is the largest single site for HP anywhere in the world."

The company now employs some 6,000 people doing everything from engineering to marketing and sales -- like Margot Torres. The 33-year old Torres is typical of one phenomenon of the region -- workers moving here from Silicon Valley because they can realize the American dream: homeownership.

Margot Torres, Hewlett-Packard employee: "In the Bay Area, I was looking at $350,000-$400,000 and here in the Antelope/Sacramento Area I was looking at $100,000."

HP employee Teri Munger, also a Bay Area transplant, says Placer County's overall quality of life attracted her and her family here in 1994.

Teri Munger, Hewlett-Packard employee: "We love the proximity to the mountains. We love the opportunities to use the waterways, and that is something that we could not do in the Bay Area."

While high tech workers and their companies are seeking out Placer, the county has been aggressively going after them for years.

Ed Graves: "By far the greatest impact -- economic impact -- on any community is from jobs that pay well and the electronics industry, the information technology industry, pays well."

Ed Graves is Director of Economic Development for Placer County. He says officials recently wanted to find out why the county is so successful in attracting high tech firms. A study commissioned through Sacramento State University found transportation was one reason.

Ed Graves: "We found it was getting back and forth to the shop, to the business. If you live in Placer County and have your business here, there is not really a major transportation infrastructure issue right now."

Other reasons the study cited for high tech growth in Placer County were: community qualities, small town values, access to markets, recreation, and housing prices. And what measures has Placer taken to make this a tech-friendly area?

Ed Graves: "We have an outstanding infrastructure in place to support the high tech industries. Our local telephone companies have done an exceptional job of putting in the fiber optic infrastructure."

So exceptional that today 63% or two-thirds of the area's 400 high tech companies actually started in Placer County. One of the successful up and comers is TASQ Technology, founded in 1994.

Ron Chaisson, President, TASQ Technology: "We manage all of the credit card equipment technology across the country for a lot of the major banks like Wells Fargo, Chase Manhattan…"

Chaisson says, as the company grew, he could have taken it anywhere but chose to stay in Placer County.

Ron Chaisson: "Because of the Placer County Cost of living, the quality of labor, for the price you pay is very, very good. Your labor ratios are good."

TASQ has grown from 87 employees to more than 400 and is now a worldwide company. While Placer County is good to high tech, high tech is good to the county. Hewlett-Packard and other companies, along with the Chamber of Commerce, established the Science and Technology Center, a state of the art computer lab for the public.

Teri Munger: "And what we have seen over the last year that it's been open is that it's utilized mostly by elderly and by children that don't have access to computers at home."

This, as well partnerships with area schools and colleges, are perhaps training the high tech workers of tomorrow -- a labor force that will keep the technology gold rush going.


Despite the recent economic slowdown across the country, many companies in the Central Valley like Hewlett Packard are continually searching for workers armed with technology skills

Uyen Ngyuen, Engineer, Hewlett-Packard: "My title is an engineer, even though I didn't go to school to be an engineer, and I found out that an engineer means someone who finds solutions to a problem and that's what my job is."

Uyen Ngyuen graduated from California State University Sacramento last June. An HP college recruiter scooped her up before she accepted her diploma. Uyen credits Sac State for helping her land the position.

Uyen Ngyuen: "I think Sac State did a good job of preparing students for the real world. What you learn is the skill set that prepares you for the job, and that skill set is something like how to be a critical thinker, how to problem solve, how to work in groups and that's what's important."

Hewlett Packard has more than a dozen college recruiters here at their Folsom location. They frequently scout local campuses like Sac State, Chico State, and UC Davis to fill technology positions.

Pam Swartwood, Internship Coordinator, UC Davis: "Our engineering fair is coming up so you can get your resume together…"

According to UC Davis Internship Coordinator Pam Swartwood, the reason companies recruit so many Davis graduates is because they come armed with a firm theoretical background, and on the job training.

Pam Swartwood: "Some of these projects are student run projects that they can work on, get hands on experience, and then we also try and educate them in getting involved in corporate or industry-related internships, which usually start their junior year, is when most companies are interested in starting students in those kinds of programs."

There is a problem keeping graduates in the area, since many high tech companies still remain outside the region. Also at issue, says Swartwood, is that most companies are small and can't hire large volumes of students

Pam Swartwood: "The Central Valley is very popular. Students want to work in the Central Valley. We're just waiting for more companies to come here."

Instructor: "What you're going to have to do, you're going to have to do a broken section here."

Colleges aren't the only educational outlets providing companies with experienced high tech workers. These students are at Rocklin High School, one of the most advanced technology public high schools in the Central Valley.

Sarah Scott, Senior, Rocklin High School: "My aspiration for next year is to go to college. I suppose I'm not nervous about college at all. I mean, Ms. Cardona, my teacher, has told me about students that have been able to waive their introductory drafting courses because of their high school courses."

Rocklin High School's advanced technology curriculum didn't just happen overnight. Department Chair Susan Espana says the concept to include a technological component came years before the school was even built. Everyone from educators and business leaders, to community members and students had a stake in making this school what it is today.

Susan Espana, Dept. Chair of Technology, Rocklin H.S.: "The manufacturing center is unlike anything that we've seen around here. There are quite a number of schools that have CAD programs -- although I have to say that our CAD curriculum is, by far and away, the best. I mean, it's the most intensive. It's the most aligned to industry standards, and they do a really good job of preparing students in that lab."

But Rocklin High is not the norm. On the downside, educators say more than 40% of Central Valley schools don't have the money to provide computer or Internet access to their students. Resources are tight and many schools are a long way off from becoming this advanced. Sarah realizes she's one of the lucky ones getting a head start on her future in the realm of "high tech."

Sarah Scott: "When we were freshman, we were given a tour of this facility, and at that time, it was required that we took a technology preparatory class to get us introduced to this building. So we've always been kind of ingrained to being, you know, "This is very unique to Rocklin." But I'm surprised that other high school haven't started, you know, building something like this, especially when they realize the benefits of it."

And the benefit is that it will most likely lead to a better future for these students.

Susan Espana: "What we wanted to do with this program is to give kids, one, an opportunity to see what the real world of work is going to be like, but also give them skills that will allow them to leave high school and go out and find jobs at a skilled pay level as opposed to going out and having no skills whatsoever to take to a workforce."


You don't need to work in a high tech industry or live in an urban center to feel the impact of new technology on the Central Valley. Our smallest towns and oldest industries are rapidly changing in subtle…and sometimes unexpected ways. A few years ago, Colusa resident Maria Gutierrez would have had to drive an hour to Sacramento to see a specialist for her skin condition. But today…

Dr. Robin Alexander: "Does she have symptoms on a daily basis?"

Dermatologist Dr. Robin Alexander offers consultations as far north as Eureka and as far south as Wasco thanks to recent advances in video technology.

Dr. Robin Alexander, Dermatologist, UC Davis Medical Center: "We needed, number one, to develop a camera that was able to demonstrate skin lesions in enough detail so that a diagnosis, or a differential diagnosis, could be made. The second thing we had to do was we had to train people on the other end about dermatology and about use of the dermatology camera."

UC Davis first brought its telemedicine program to Colusa in 1992. Dr. Julian Delgado was one of the first physicians recruited.

Dr. Julian L. Delgado, Chief of Staff, Colusa Regional Medical Center: "What it did is it gave patients an added level of comfort knowing that we were able to, right here in Colusa, tap into a renowned medical center. Not just, you know, here in California but, you know, one of the major medical centers in the world. "

What began as a fetal monitoring program evolved through the introduction of teleconferencing technology, allowing specialists at UC Davis to offer consultations to rural hospitals like the Colusa Regional Medical Center.

Wanda Smead, Telemedicine Site Coordinator, Colusa Regional Medical Center: "We have patients that are, you know, they're elderly and they don't drive or, you know, they don't have someone that can take them. We have patients that are in wheelchairs. We do "peds" nutrition and, you know, most of the parents…a majority of the parents, you know, they're farm laborers so transportation is an issue."

Dr. Robin Alexander: "I think the most valuable asset to the program is being able to provide healthcare in rural areas where no specialty or subspecialty health care could be offered. And that's the biggest plus to this program."

Keeping distant communities connected is one of the Valley's great challenges -- and it sometimes makes for strange bedfellows. Just ask Bill Lozano; he's been farming for 35 years. These days, he grows mostly alfalfa and Sudan grass for horse feed. But last year, something new sprouted in Bill's field…

Bill Lozano, Vacaville farmer: "Someone came up to the house, as a matter of fact, one day and asked us who owned the land, for one. And approached us on putting up a tower, and asked if we were interested."

The money from a five-year lease on their land -- renewable for up to 30 years -- made a welcome addition to the farm's earnings. But before construction could begin, they hit a hurdle -- a 100-foot hurdle…

Bill Lozano: "Nextel wanted a 100-foot tower and the county has, I guess, an ordinance of nothing over 65."

But a 65-foot tower wouldn't meet Nextel's coverage needs. So Bill and his brother Mando lobbied the Solano County Planning Commission for an exemption from the height restriction.

Bill Lozano: "If you look around here, the trees are just as tall as the tower, and if you come at it from different directions, you don't even see it."

The Lozanos prevailed in their fight, and the revenue from the tower's lease gives the family farm a new level of security.

Bill Lozano: "They give us a small amount -- not a large amount -- but it does help us to keep going, for our family to keep farming and put bread on the table."

Valley farmers don't just benefit from new technology; they also fuel it -- literally. The Diamond Walnut plant in Stockton is the largest walnut processing plant in the world, handling half of the entire U.S. walnut crop.

Fred Jacobs, Senior Director of Operations, Diamond Walnut: "Vacuum air separation removes roughly 98 to 99% of the shell. The kernels then move to electronic sorting where we use laser sorting technology to separate the kernels from the last of the shell."

Walnut shells may not be edible, but they are valuable. Ground down, they're a perfect fuel for a biomass boiler. Superheated steam from the boiler powers the plant, and chills 2 acres of cold storage.

Fred Jacobus: "Well, annually we produce 26 to 30 million kilowatt hours of power at the power plant, and the plant typically uses 20 million kilowatt hours."

So Diamond Walnut is able to sell the excess power it generates: 6 to 10 million kilowatt hours a year, a precious commodity given the state's ongoing energy crisis. And a reminder that high tech solutions can sometimes be found in the simplest of things.


If there is optimism in the Central Valley pockets of silicon concerning the economic health of their tech industries, and the regional economy in general, the economic heartbeat at the state's technology center, Silicon Valley, may be a bit weaker.

The Survey and Policy Research Institute of San Jose State polled 1,000 Silicon Valley residents prior to, and just after Christmas, and four out of five people believe business conditions are worse now than they were a year ago.

Linda Valenty, Asst. Professor of Political Science, SJSU: "They understand what's been going on here in Silicon Valley. They've been hard hit by the recession -- harder hit by the recession here than, I think, adults were nation-wide because industry is narrower here. We didn't have as much of a cushion to soften the impact to the technology industry."

Most people questioned were optimistic that things will be better in the year ahead. But what about those close to the industry's core?

Mark Albertson, Senior V.P., Western U.S. American Electronics Association: "I would expect that the high tech industry should lead the recovery. Now the only question then becomes when that's going to be. We are seeing some modestly positive signs in terms of some economic recovery here in Silicon Valley and in other high tech centers around the U.S., but it is certainly nothing like what we saw over the past several years before this downturn and I think it's anybody's guess right now when we might see that sort of robust growth actually come back."

In an irony that has not gone unnoticed by Silicon Valley, the very success that was spawned here is feeding the growth of technology centers in the Central Valley.

Mark Albertson: "This is the price of success, is that as Silicon Valley has grown, the cost of housing has risen, the overall cost of living has gone up. People in many cases -- even those that are part of this fast paced culture -- they want a different lifestyle. They want an area where it's not quite so expensive to live. But they also still need to have access to a good infrastructure, a good set of skill bases for their employees, and a good quality of life. And I think that's why a number of companies in recent years, in Silicon Valley, have looked very positively at moving to areas of the Central Valley and the Sacramento area, because the cost of living is less expensive and the quality of life in many cases is better."

Clare Emerson: "A few giants moved in: NEC, Intel… Packard Bell was here, had their corporate headquarters here. All of that started after Hewlett-Packard decided to locate that campus in Roseville. And what we saw was a lot of smaller companies -- they were like acorns falling from the tree -- a lot of smaller technology companies moved out to Placer County to be close to Hewlett-Packard, to become vendors, to do business with them. And that's exactly what's happened."

As Silicon Valley rebounds, albeit more slowly than some would like, it's important to remember that the lights are still on, and the business of driving the high-technology industry in this country is still going on here. And all roads still lead to the Great American Parkway when it comes to hi-tech. Having faced down the specter of out-of-control growth and learned some valuable lessons in how to create a livable, workable environment in the face of great success, what advice can Silicon Valley give to developing technology companies in the Central Valley?

Mark Albertson: "My concern would just be that the Central Valley and other communities that are looking at high tech growth, should do the best they can right now to plan in advance in terms of the traffic situations, maintaining the quality of education, in terms of the quality of housing, and the availability and affordability of housing. Those are things that the Silicon Valley has always struggled with in terms of advanced planning and I think the Valley can serve as a useful model for communities that are looking at their own future growth and hopefully avoiding some of the problems that we've experienced in the past."

If the burgeoning pockets of high-technology industries in the Central Valley are any indicator, Valley communities might expect a rosy future as we take our first cautious steps into 2002. As the Santa Clara Silicon Valley discovered, a lot depends on fickle economic winds that can blow a hole right through a rosy future. On the next New Valley our topics will be employment and the economy. We're calling it "Help Wanted." We hope you'll join us.


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Additional support provided by a grant from the Great Valley Center.

To order a copy of this program for $14.95 plus shipping and handling, call (888) 814-3923. Or visit us online at www.kvie.org.

This program is brought to you through the generous support of viewers like you.

Presentation of New Valley is made possible by Intel Corporation -- taking a leadership role in bringing citizens, business and government together, to examine the impact of growth in the Central Valley.

And by U.S. Home, committed to developing a positive future where we live and work by promoting responsible growth, and preservation of our quality of life.

And by the air districts of the Sacramento and San Joaquin Valleys.