Internet, Digital Innovations Key to Local Growth Potential
The local electronics and manufacturing industry has a cure for the Y2K hangover: A dose of high-tech devices.
Hewlett-Packard Co. in Rancho Bernardo will introduce a line of new products this year , more Inkjet printers and All-In-One products, as well as digital cameras.
“We’re pretty excited about the next year,” said Ray Brubaker, site general manager for H-P’s All-In-One division. “We’re planning for better growth than we’ve seen.”
Brubaker said Palo Alto-based H-P is projecting double digit growth in 2000 sales.
High-tech leaders polled in the 10th Annual Deloitte & Touche/San Diego Business Journal Economic Outlook Survey had mixed predictions of their companies’ growth in 2000.
Eight of the 15 respondents expect a 10 percent increase in sales this year, while three predict a 6 percent to 10 percent jump. Two respondents expect a 1 percent to 5 percent revenue growth; one said company sales would decrease by 1 percent to 5 percent; and one expects a 10 percent decline.
Brubaker said digital technology will continue to drive the printer industry this year.
“If you look around at the major trends in digital imaging , we have the ability to capture photos digitally, we have printers that you can have in your home that can print out photos, and we have the ability to send photos digitally to our grandma.
“We’re seeing these trends gain a foothold in the U.S. and moving outside. We’re now seeing very strong growth in Europe and Asia.”
No Place Like Home
Brubaker said California is a good base for H-P to branch out its business.
“California is H-P’s home. It seems like not only a good place to live but also a good place to sell products,” he said, adding H-P has been in San Diego since the late ’60s.
Nine out of 15 electronic/manufacturing leaders polled in the survey also gave California the thumbs up. Four said the state is not a good place to do business, while two did not respond.
Brubaker said as San Diego improves its ability to retain business, the local electronics/manufacturing industry here will only get stronger.
“I think the mayor’s office and the City Council have been very supportive of business,” he said. “Overall it feels they have struck a very good balance on priorities in the community.
“I’ve been pleased to see the players who have come to San Diego. We always felt like a second cousin to Silicon Valley. But we’re becoming recognized as a place where technologies can thrive.”
Five of the 15 survey respondents agreed with Brubaker that San Diego has improved its ability to retain business over the past year.
Eight gave the city a negative rating, while two had no response.
Brubaker also predicts a bright San Diego business climate this year.
“The businesses in San Diego are well positioned to have strong growth based on the trends of the Internet and digital imaging,” he said.
Eight of the 15 surveyed said the local business growth would be good this year; one said excellent; five said fair; and one did not respond.
Eye On Asia
San Diego is also well-positioned to move technology into countries like China, said Kevin Carroll, executive director of the American Electronics Association in San Diego.
“San Diego is probably the best city in the United States for moving technology into China because companies here are already doing business in China,” he said.
Part of San Diego’s tech growth will also come from start-ups, Carroll said. He said San Diego used to be known as a one-to-two tech powerhouse company town, with no other tech firms being noticed.
“I think we’re moving away from that. You’re seeing a lot of well funded start-ups,” Carroll said. “That’s a change. You’ve seen some development of top venture funds that are looking for San Diego start-ups.”
Carroll said the local electronics/manufacturing industry is also going to start holding San Diego political leaders more accountable on tech issues than in past years. He pointed to Mayor Susan Golding’s recent stand against E-commerce taxation in support of the tech industry.
Last year, the American Electronics Association was instrumental in the passage of the state Electronic Transaction Act, which says a commercial contract may not be denied legal effect or enforceable solely because an electronic record was used in its formation.
Carroll also pointed to the passage of Assembly Bill 1242, which addressed California’s severe shortage of teachers.
“We’re seeing Sacramento be responsive to the technology community, but we still have a long way to go,” he said.
One sector of the electronics/manufacturing industry that will go like gangbusters this year will be the semiconductor business. So says Jeff Howell, general manager of market development for Kyocera America in San Diego, supplier of technical ceramics for the telecommunications industry.
Howell said Kyocera’s growth potential is driven by the exploding telecommunications industry. Some of Kyocera’s customers include Motorola, Inc. and Lucent Technologies.
“If you just look at the semiconductor association forecasts, everybody’s showing double digit growth,” Howell said. “We, as well, are showing that type of improvement.”
Kyocera’s growth means more hires this year. Howell said the company, which has about 823 employees here, plans to hire a handful of specialized people this year.
Four of the 15 respondents said the number of their employees will increase 5 percent in 2000; six predict a 1 percent to 6 percent jump; and one expects a 5 percent reduction in work force.
Four of those polled said they won’t hire any new employees this year.
Howell added Kyocera, which has called San Diego home for three decades, doesn’t plan to leave.
“Kyocera is very much committed,” he said. “We have deep roots here and we will continue to grow here.”
Howell said San Diego is a good place to be for the latest cutting-edge wireless technologies.
“We really live in an exciting time,” he said. “I think one day the world as we know it will be very much wireless.
“I think there’s a huge upside to the area we’re involved in. I think there’s still some good times ahead.”