Hey Angelinos! Here's another reason to get certified in technology in 2015. Los Angeles is the new silicon beach!
Los Angeles County was home to 368,580 high-tech jobs in 2014, more than other regions that boast strong high-tech sectors, according to figures released by Mayor Eric Garcetti and local economists.
The Los Angeles area had more high-tech jobs than Boston-Cambridge, New York City and Santa Clara County, according to the Los Angeles Economic Development Center’s “High Tech in L.A.” report funded by JPMorgan Chase & Co. “This watershed study puts the exclamation point on what we already knew anecdotally, but hadn’t yet quantified about L.A.’s high-tech and innovation revolution -- namely, L.A. is innovating and applying technology at an unprecedented rate to create thousands of new, well-paying high tech sector jobs and to transform its leading industries, such as entertainment, health services, aerospace and manufacturing,” said Bill Allen, president of the LAEDC.
“We have two things we hold dear here,” says Tradesy co-founder and CEO Tracy DiNunzio, 35. “Catered food delivered for all meals and being close to the ocean. “Such is life in Silicon Beach, a stretch of roughly four miles from Venice to Santa Monica that has become the heart of Los Angeles’ fast-growing tech scene. Thanks in part to Hollywood’s proximity and a climate that sells itself, there are some 800 startups in the area that have attracted about $1.3 billion in venture capital since 2011, according to a report from PricewaterhouseCoopers and the National Venture Capital Association. Silicon Beach’s ranks include social-media companies like Whisper and Snapchat, which reportedly turned down a $3 billion acquisition offer from Facebook in 2013. And that’s not the only attention the area has drawn from its namesake 400 miles to the north. Google occupies 100,000 sq. ft. of Venice office space, including some in the iconic Frank Gehry–designed Binoculars Building. Facebook opened an office in nearby Playa Vista in 2012.
All this has helped turn a patch of sun-soaked coast better known for beachfront promenading into an unexpected model of growth for the new digital economy. A 2012 report from the business-data organization Compass ranked L.A. as the third largest tech ecosystem in the world, behind only Silicon Valley and Tel Aviv. And as startups multiply along the Pacific Coast Highway, developers have scrambled to meet the surging demand for housing and office space and the increasingly high prices they command.
Silicon Valley still dwarfs all other domestic tech sectors–Internet companies in and around Palo Alto drew $3 billion in venture capital last year alone–but the explosive growth of Silicon Beach is the latest sign that some of the features that lured tech companies to Northern California are beginning to be replicated elsewhere. Innovations in open-source software and cloud storage make launching a tech company anywhere easier and cheaper than ever.
“There’s all this stuff I can take off the shelf that used to require hundreds and hundreds of people,” says Michael Heyward, the 26-year-old CEO of Whisper, an app that allows users to post anonymous messages on a social network. The company, which just leased a 14,000-sq.-ft. Venice home once owned by Anjelica Huston, raised more than $20 million in venture capital last year. “I think great companies can get funded anywhere,” says Heyward. “Silicon Valley does not have a monopoly on good ideas.”
We shouldn’t be surprised that the LA-led Southern California region is once again emerging as the next Silicon Valley. After all, the region boasts three structural advantages.
- Entrepreneurial culture. Southern California has long been a place where independent minds come together to collaborate and create, where visionary entrepreneurs build lasting companies. We’ve seen it in aerospace, apparel, and entertainment and now increasingly in technology. The innovative thinking and design talent has found an outlet in the Internet to impact a new set of industries, including commerce, games, video, and data. Los Angeles is different than New York and Boston, where professional service industries and corporate headquarters still shape the tone for the region. In those cities, big companies often overshadow entrepreneurship and creative endeavors. In Los Angeles, entrepreneurship is pervasive. New York is home to 45 Fortune 500 companies. Despite its comparative size, Los Angeles is home to only 5. Moreover, according to a recent Kauffman Foundation study measuring levels of new business creation across the United State, Los Angeles had the highest rate of entrepreneurial activity from the period between 2011 and 2013. Simply stated, people don’t come to Los Angeles to work for big companies, they come to LA to create them.
- Significant technical talent. With a heritage of engineering and technical innovation, Los Angeles continues to develop technical talent. Universities in Los Angeles produce more engineering graduates than any other county in California—including in Silicon Valley. These graduates provide the skill and energy that is vital to the growth of technology companies. In addition, LA is increasingly attracting graduates and other experienced technologists from across the country and the world. More venture capital is invested into software in the region than any other sector—more than three times the amount invested into media and entertainment. Google’s significant presence in the region is composed of a majority focused on technical and product. And the company is rapidly growing in LA.
- Availability of capital. There are strong investors emerging in LA to partner with entrepreneurs building technology companies in the region. While entrepreneurs in both New York and New England can find local capital partners, entrepreneurs in Los Angeles have an advantage in their proximity to the Valley. By far the largest concentration of venture capital firms are in Silicon Valley. And as the venture capital industry has consolidated over the last decade, the concentration of capital in Silicon Valley has increased even more. According to the NVCA, of the 38 firms that successfully rose new funds this past quarter, five accounted for nearly 80% of the total dollars raised. All five were either based in Silicon Valley or had a significant presence.
The bottom line is this: through the cycles, the structural advantages enjoyed by Los Angeles and the surrounding region has it once again attracting more venture capital than any other outside of Silicon Valley. It is these same dimensions that create a long-term advantage. Lasting technology companies from ActivisionBlizzard to Qualcomm were built in Southern California. Amazing entrepreneurs are building the next slate today.
For information on technology training and certifications visit http://www.abcotechnology.edu