Re: [CPEO-IRF] Closure and the high-tech workforce

[Lenny Siegel <lsiegel@cpeo.org>]

Pentagon planners, used to ordering the regular relocation of uniformed
personnel, don't fully understand that high-technology civilian
employees rarely respond with the same "Yes Sir!" when asked to move.

For years, I studied the formation of high-tech industrial clusters,
with a focus on Silicon Valley. I remember Robert Noyce, one of the
inventors of the integrated circuit, jesting that Silicon Valley ended
up where it is because the mother of William Shockley, one of the
inventors of the transistor, lived in Palo Alto, California. After
Shockley invented the transistor at Bell Labs, he moved back to Palo
Alto and took a position at Stanford University. Though his firm,
Shockley Transistor, never made money, his top employees, including
Noyce, formed the businesses that made semiconductors a global commodity
and Silicon Valley the world's leading high-tech cluster.

But Silicon Valley grew up around Palo Alto, not because of Shockley,
but because the high-tech cluster was already established. In
comparison, Gordon Teal of Texas Instruments - another inventor of the
integrated circuit - successfully built up that firm, but no Texas
region ever accumulated the technical leadership found in Silicon Valley.

The father of Silicon Valley was neither Shockley nor Noyce, but
Frederick Emmons Terman, Jr., Dean of Engineering and later Provost of
Stanford University. Terman consciously built a "community of technical
scholars," blending the area's educational resources and quality of life
to make it a key center for innovation in aerospace, then
semiconductors, and finally software. Once the technical community was
established, the mix of small, innovative firms and established
employers built upon itself.

Industries which draw their comparative advantage from brainpower - as
opposed to access to raw materials or transportation convenience -
locate in areas where high-tech professionals, many of whom can choose
to work anywhere in the world, want to live. If their employers try to
move, they are likely to stay where they enjoy the quality of life,
particularly if a wide range of other high-tech businesses is already established.

This is as true for the aerospace industry cluster in Los Angeles
County's South Bay as in the San Francisco Area's South Bay. Unless the
Air Force moves the Space and Missile Systems Center to a place where
high-tech professionals want to live, shuttering the Los Angeles Air
Force Station will be a false economy. The same applies to other
military bases where the prime resource is brainpower.

***

On the other hand, closing the LA base may not be as devastating for
either the local economy or its employees as its defenders assert. I'm
not saying that there will be no re-adjustment pain, but civilian
high-tech industry - particularly telecommunications - is on a long-term
growth curve. Civilian high-tech firms are likely to expand in the LA/El
Segundo area to absorb the brainpower surplused by the military if its
closes the base.

But there is a challenge, unless times have changed from the 1980s, when
Silicon Valley's civilian sectors overtook the aerospace industry.
Professional workers in the Defense sector have the technical skills
necessary to succeed in the civilian marketplace, but they must
re-acculturate. That's what many of my friends did in the 80s.

This may be an overgeneralization, but businesses and bureaucracies make
money in the Defense sector by getting their work done late and over
budget. Hence the pejorative term for high-tech featherbedding:
"government work." In commercial businesses, the pace is faster,
deadlines are deadly, and efficiency is essential. For workers at
high-tech Defense facilities like the LA Air Force base and its
supporting contractors to convert to commercial work, they'll need to
learn a whole new way of doing business. If they do, the impact of
potential closure may even be positive in the long run. It clearly
doesn't need to be as devastating for the community as it is likely to
be for the Air Force.

Lenny Siegel

-- 


Lenny Siegel
Director, Center for Public Environmental Oversight
c/o PSC, 278-A Hope St., Mountain View, CA 94041
Voice: 650/961-8918 or 650/969-1545
Fax: 650/961-8918
<lsiegel@cpeo.org>
http://www.cpeo.org
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