Friday, April 10, 2009

California Business Ascent: The Solution to Create Sustainable Jobs

News about the economy seems gloomier. Unemployment rates rising, small businesses and multi-national corporations failing, foreclosure numbers increasing, the banking industry in turmoil, and the stock market unstable. What is needed is sustainable job creation to stem the tide of this difficult economic cycle. Yet many economic think-tank leaders and policymakers talk at the 50,000-foot level about innovation and federal stimulus funding as the panacea for our woes but don’t provide much in terms of a practical solution to accelerate economic recovery at the grass roots level.  

It is important to point out that an economic recovery solution exists. The solution, as it always has been in this country, rests on the shoulders of innovative, locally owned businesses run by visionary entrepreneurs. They exist in every region and community in the United States, rural or urban, inland or coastal, northern or southern. Golden Capital Network has coined a term to describe these companies: GLOBIEs. GLOBIEs are businesses that provide products and services that create new industry categories, grow existing ones, or capture more of an industry’s market share, thereby growing their businesses, generating revenue, creating jobs and stimulating new tax revenue. GLOBIEs can be startup companies, emerging growth companies, or mature enterprises with existing international or global market presence. They all start small, but many of them grow big and become market leading companies in their industries.

Some historic examples of GLOBIEs include companies like Hewlett Packard, Intel and Computer Science Corporation. Hewlett Packard was founded by Stanford classmates Bill Hewlett and Dave Packard in a Palo Alto garage. The first product they built was an audio oscillator. They sold eight their first year to Walt Disney, generating $5,369 in revenue. Many know the story of Bob Noyce and Gordon Moore, who founded Intel after leaving Fairchild semi-conductors. They decided to write a business plan and asked Art Rock, who helped start Fairchild and became an early venture capitalist, for funding. In 2 days, they lined up $2.5M. Their first commercial product was a memory chip which was mildly successful. Soon after, Intel was approached by a Japanese calculator company, asking them to make 12 chips. Intel ended up making one chip, performing like 12, revolutionizing the computer industry forever. Computer Science Corporation was founded in 1959 by Roy Nutt and Fletcher Jones with $100. They wanted to make it easier to use computers. The company quickly became highly reputable amongst computer users, and in 1961, contracted with NASA, launching CSC in the space business. These three companies each had very humble beginnings that went on to become long-standing industry leaders, creating thousands of jobs in California and globally. It is the next wave of GLOBIEs who will bring California out of its current economic downturn.

Where do GLOBIEs belong in the discussion about economic recovery and growth? Very high! These are the companies that can transform the local economic landscape. But, there seems to be little or no talk about making these innovation-based entrepreneurial businesses the focal point of our economic development strategy at the local, state or national levels. That is disturbing, in that there are thousands of multi-billion dollar global markets these businesses penetrate every day with their goods and services. Every time a GLOBIE makes a sale in a national or global market, new revenue is brought back to the GLOBIE’s home community.

A recent survey of Golden Capital Network alumni GLOBIEs confirmed that they have had substsantial job creation impact in their communities over the past several years, and are still doing so today. Whether an economy is in an up or down cycle, there are four opportunities for GLOBIEs to emerge and excel, including:
  1. Tapping into a geography that has a growing need for a GLOBIEs product or service 
  2. Creating a new industry category, or capturing a larger share of an existing industry sector 
  3. Providing a compelling solution for governments, businesses or consumers that either saves money, increases value, or makes things more efficient 
  4. Creating a diversion from the day-to-day grind of life
For example, Santa Rosa-based Tri-Access Technologies demonstrates that GLOBIEs are tapping into new geographies when it recently opened an office in Opoh, Malaysia. This fabless semiconductor company is accelerating the rapid deployment of advanced digital video and high-speed data in CATV,Telco and Wireless networks. The company’s products enable economic and system design efficiencies through integration and higher performance. It opened its Malaysia office to facilitate its global operations and further strengthen its relationships with suppliers, packaging houses and customers located in the Asia-Pacific region. Many of the company’s supply partners and more than half of its customers are located in or have major operations in the Asia-Pacific. TriAccess' growth plans include key personnel additions at its headquarters in Santa Rosa, such as highly-specialized RF applications engineers, internal operations specialists, and customer-facing sales professionals.

Another company, Sentilla Corporation, a provider of demand-side energy management solutions for commercial and industrial facilities, recently announced that it has opened its first European office in London, UK. The move strengthens Sentilla’s global presence and gives enterprises in the UK and Europe direct access to the company’s innovative technology, which can dramatically cut carbon footprint and energy costs. Sentilla, backed by Wavepoint Ventures and others, recently secured $7.5 million in Series B financing, after launching its patent-pending energy management technology in May 2008. Its platform can be embedded into virtually any system to provide insight into real world conditions at the source of power consumption.

Brammo Motorsports of Oregon is part of a group of innovative GLOBIEs that are creating a whole new industry category: electric motorcycles. Brammo is gearing up to begin production on its Enertia electric motorcycle. The Enertia is a carbon fiber-intensive two-wheeler that stores its power in large format, lithium-phosphate battery packs from Valence. The company has doubled its workforce to 28 and will build up to 50 or more employees soon as its gets ready to begin assembly. Starting in May, five Best Buy stores near the west coast will begin stocking the Enertia.

In Anderson, California, a rural community located 2 and ½ hours north of Sacramento, a high tech start-up company called Shasta Crystals estimates it will create up to 80 jobs in the near future. The company has created a revolutionary approach to making crystals that are used to create “visible lasers”, used as light sources for miniature projectors in products like cell phones, laptops and game consoles, and saves its customers significant time and money on manufacturing crystals.

These alumni companies provide just a few examples of how GLOBIEs are positively impacting the economy by reaching new geographic markets; creating new industry categories; saving businesses, consumers or governments money; or by enhancing our quality of life. Now consider that at GCN we deal with just a small number of GLOBIE companies, almost exclusively in California. Imagine if there was a focus on adding value to these companies in communities, regions and states across the entire U.S.! The impact would be phenomenal. Local, state and federal job creation efforts should focus on GLOBIEs because they represent by far the greatest opportunity for accelerating economic recovery and growth and creating sustainable jobs.

GLOBIEs have very clear needs: 
  1. access to all forms of risk capital
  2. access to talent, from skilled technicians and labor workers, to executive management, to boards of directors and informal advisors with specialized industry or functional expertise
  3. access to professional services such as those associated with intellectual property, finance and accounting, risk management, marketing and sales, executive search, web development, and many others
  4. access to business development whether it be through channel partners, VARs and other strategic partners all the way up to customers themselves
  5. access to peers to share war stories, offer strategic advice, and form new alliances. 
The common denominator is people. Businesses successfully start, and successfully grow, when the right combination of people with complimentary skill sets come together with a shared vision to capitalize on a market opportunity.
The challenge for GLOBIEs is four-fold. This is where economic development efforts can step in and add value. First, the GLOBIE “ecosystem” does not naturally self-align in a community or region. GLOBIEs frequently operate in isolation without access to the critical resources they need.

Second, GLOBIEs require access to very specific domain expertise and talent. The essential critical mass of expertise and resources does not exist within specific industry sectors in most communities.

Third, most of a GLOBIE’s customers exist outside of their community, as well as the strategic resources and investment capital necessary to get to the customers.

Finally, most GLOBIEs are hard to find. Press releases posted on their websites and issued to the media rarely reach their intended audience. GLOBIEs almost never appear in their own local media. In most cases, individuals, organizations and businesses who could add value to these companies don’t even know they exist, even though they are located right in their own back yard.

A mindset shift about economic development approaches and a repositioning of energy and resources to focus on this sector of the economy is required. A city, county, local economic development organization, chamber of commerce or other community-based organization can enable GLOBIEs to become more visible. Find your established GLOBIEs; create methods to draw out the new ones; segment GLOBIEs by industry sector; use events to bring GLOBIEs together with capital sources, professional services, and executive talent; create local media partnerships to generate visibility for them; establish a web portal through which GLOBIE profiles and information can easily be accessed; create a system to track the connections that emerge through your efforts along with basic economic data on the GLOBIEs so you can measure progress; and align with a broader statewide effort to provide critical non-local connections and visibility. You can have a major impact on your local economy by helping GLOBIEs in this manner.

Golden Capital Network has spent years serving as a virtual bridge between policymakers and private sector ingenuity. Through this unique relationship, GCN is able to deliver a solution for local policymakers, civic and business leaders: The California Business Ascent.

Golden Capital Network, in partnership with the California Business Transportation and Housing Agency and CALED, has launched the California Business Ascent initiative as an easy-to-implement, cost effective solution that enables community leaders to help GLOBIEs in their community. We strongly believe that a community’s path to economic recovery and sustainable job creation will accelerate through the Business Ascent initiative. To find out more about how to become a California Business Ascent community, visit www.goldencapital.net

2 comments:

Anonymous said...

Thanks for your information...

Thanks for sharing...


___________________
Andrew
Entertainment at one stop

Unknown said...

I think that the solution to create sustainable jobs is to find a great deployment of talent of workers.
Cheers