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Old 06-16-2010, 10:55 PM
 
39 posts, read 134,378 times
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Hi,

So basically, I've lived here all my life, and I'm wondering why so many people across the nation think that Portland and Seattle could be the next Silicon Valleys in the next 10-15 years? I know that there are a fair amount of tech companies here and some have a large tech presence here even if they aren't HQed, but as far as I have seen, Portland seems to be a bad place for business due to high taxes, and our unemployment/job creation/job quality in relation to cost of living is ABYSMAL. So why is this the perception around the nation? Now don't get me wrong, I'm excited that my home could become the next Silicon Valley (although I think Seattle's got us beat there), but what is the reason for it? I know GE is thinking about expanding here for alternative energies, but other than them, I thought a lot of businesses turned us down/are moving out of here.
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Old 06-16-2010, 10:58 PM
 
Location: The beautiful Rogue Valley, Oregon
7,785 posts, read 16,421,460 times
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Probably because Portland and Seattle ALREADY have a big tech presence (well, relatively speaking). Portland's been called the Silicon Forest since the early 80s. Of course, there's been quite a tech bust since then, but the name still sticks.
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Old 06-17-2010, 12:55 AM
 
Location: Portland, OR
1,657 posts, read 4,097,758 times
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Personal Opinion {meaning I have no statistical data to prove my points}

It isn't all about work and profits. High Technology NEEDS high technology engineers and other employees. These high tech employees don't ask, they absolutely flat out demand pampering and being treated as high value persons of the 'Republic.' To that end, you get companies with workout gyms, volley ball courts, right in the company buildings, high quality food cafeterias at low cost (actually cafeteria prices is subsidized in many cases) and so forth.

BTW: you do know the top, very top, of the High Tech engineers and employees are in great demand, and there is no shortage of employment offers for these select few.

More profits are made by talented employees where exceptional educational background, rare ability, and awesome intelligence are needed, than profits lost to a tax policy, that taken as a whole, is only middle-of-the-road compared to other cities that are competing on cultural and social basis.

And to that end, the community where these high tech companies are located makes a difference. The "vibes" of the community makes the potential employee look favorably on the employer.

Yada, Yada, Yada.....

{ Long complex discussion on life-style, off work diversions, education peer groups, social-conscious peers, non-fellow-employee friends, and social activities "appropriate" for gifted employee's opinion of self worth.}

The SF bay area, including the Silicone Valley is loosing its appeal due to many factors, including cost of living and a perceived opinion of urban sprawl degradation has impacted the quality of life. but don't count the Valley down and out. The 'source' of High Tech technology is still the education institutions around SF bay area, and that ain't going to go away. period.

Other areas that I think are also claiming to offer community life-style benefits to High Tech employees and their employers are: Beltway around Washington DC, and out I-66 into Virginia and Dulles Airport way; Baltimore-Washington Corridor along I-95; the I-95 Corridor between NYC and Boston, Chicago and by extension Madison Wisconsin.

Texas, and specifically Dallas, Texas does draw many to its high tech employers, but the Dallas culture isn't what those that would crave Portland or Seattle would want. I do not understand the entire North Carolina High Tech thing, nor can I explain it. Portland's unique 'vibes' would not draw engineers who end up working in NC or Dallas.

Except for the gloom of winter, Portland does offer a life-style, and 'green' living, and a youthful culture as well as 'burb living, semi-rural living, plus a full night-life of music, culture, and arts. And the beer ain't bad either.

Other examples:
- the women's fashion creation industry is located in NYC more for cultural issues for the Designers than the clothing making issues (with are overseas anyway)
- Book publishing and magazines editorial offices located within 90 minutes drive of NYC.
- Media Advertisement creativity and production industry located in LA

Sorry for the long post.

Phil
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Old 06-17-2010, 03:17 AM
 
333 posts, read 740,541 times
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Awesome post Phil...I tried to give you reputation points but it says I need to spread some more around. Guess I like what you have to say quite often! I'd be interested in your analysis of high tech jobs in the immediate Portland area. I always hear about Hillsboro with Intel being the center of it but does the Silicon Forest spread out to the east or north at all? Up to Vancouver?
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Old 06-17-2010, 05:18 AM
 
Location: Orange, California
1,576 posts, read 5,836,413 times
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There is a real "chicken and egg" thing that goes on with tech industry centers. Is a city a tech hub first and then become a "lifestyle" town later. Or does it start as a "lifestyle" town and thus attract a tech industry? Regardless, it does seem apparent that most tech towns generally have a pretty good lifestyle (e.g., Portland, Seattle, SF, Austin, Boston, NOVA, Raleigh) that draws a lot of younger, highly educated folks. I will always think of Portland as a slightly techhy "lifestyle" city. But I agree with the poster who suggested that it is unlikely to become the next Silicon Valley because Oregon does not have a sufficiently pro-business climate. Oregon has a lot of charms, but if you are looking to locate your tech business somewhere, it has lots of competition that make better financial sense.
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Old 06-17-2010, 07:17 AM
 
Location: Oceanside and Chehalem Mtns.
716 posts, read 2,564,276 times
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Not likely based on the current political climate. High tech companies look for several factors:

1. Educated workforce - The US is lagging in turning out highly quality engineers. Meanwhile what we considered third world countries in the past have really stepped up technical education systems and are turning out an educated workforce that meet or exceeds the US (and Oregon). (ex: Viet Nam)

2. Infrastructure - It's similar to the above. The playing field has been leveled around the world.

3. Cost of ongoing operations. It's no longer OR/WA vs. CA. It's virtually every major country in the world and state in the US competing for companies that want to grow. It's not necessarily wages, it's our US tax system that puts us at a competitive disadvantage.

4. The markets served by high tech generally require a manufacturing presence in their country.

"Silicon Valleys" are now spread across every country in the world and we aren't doing much to compete.

The local Silicon Forest has been in an overall state of atrophy for the last decade or two and I don't see why that would change. The "next silicon valley" is already out there. It's in China, Viet Nam, Russia, India, UAE, Ireland, Isreal, Korea, etc.

Last edited by davefr; 06-17-2010 at 07:35 AM..
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Old 06-17-2010, 09:10 AM
 
Location: Portland, OR
1,657 posts, read 4,097,758 times
Reputation: 900
Quote:
Originally Posted by Sprightly View Post
Awesome post Phil...I tried to give you reputation points but it says I need to spread some more around. Guess I like what you have to say quite often! I'd be interested in your analysis of high tech jobs in the immediate Portland area. I always hear about Hillsboro with Intel being the center of it but does the Silicon Forest spread out to the east or north at all? Up to Vancouver?
Thank-you for the kind words and thoughts.

I have no proof except my own personal observation:
The Silicon Forest seems only exist in Eastern Washington County. Maybe some of the engineers and managers are living in NW 23rd (nob hill), or L.O. area, but I don't know. The primary jobs and business seem to located out west of Portland. I give a nod to Wilsonville and the employers down there.

No, I know of little spread east of the Willamette, or North of the Columbia; I could be wrong on that.

Quote:
Originally Posted by goozer View Post
There is a real "chicken and egg" thing that goes on with tech industry centers. Is a city a tech hub first and then become a "lifestyle" town later. Or does it start as a "lifestyle" town and thus attract a tech industry? Regardless, it does seem apparent that most tech towns generally have a pretty good lifestyle (e.g., Portland, Seattle, SF, Austin, Boston, NOVA, Raleigh) that draws a lot of younger, highly educated folks. I will always think of Portland as a slightly techhy "lifestyle" city. But I agree with the poster who suggested that it is unlikely to become the next Silicon Valley because Oregon does not have a sufficiently pro-business climate. Oregon has a lot of charms, but if you are looking to locate your tech business somewhere, it has lots of competition that make better financial sense.
I noticed you're form NOVA, I understand that NOVA also has claim to a lifestyle that attracts High Tech Engineering types. However, I lived in the Baltimore area back in the '80's and IMHO, NOVA is still heavily influenced by the DC government industry. Yes, there are many in he High Tech industry that would enjoy the NOVA lifestyle, but not everyone. The social life for much of NOVA is structured around the Federal bureaucracy and the officer corps of the various military branches. This is AS EXPECTED, since being so close to the source of raw political power. This lifestyle not for everyone. Although the range of restaurants cuisines in the NOVA and DC area rival NYC.

And I contend that there is no "chicken and egg" thing, the percentage of the local population that make up the High Tech engineers is small in almost every community. It is not about "business climate" it is about social / cultural / continued education / recreation / and so on and so forth. All of which are "soft" features that can change, and are almost ephemeral in being desirable; changeable. One decade it may be "green" communities that draw, and then another Orchestras and performing arts, or youth dance clubs ("Indie Music?"), or access to Universities with evening classes, or maybe it could be great Golf courses. Nobody knows exactly what features a community offers that will attract which engineers for any given year of decade.

This soft community features must be there for the majority of the community's population, and the high tech designers just piggy-back onto community. For example, in Portland we have a local bookstore Powell's. Unless you have experienced Powell's you have no concept of how much this has added to the desirability of Portland. On the other hand, Portland does not have major educational institution which can claim to have a world class Engineering and High Tech programs.

Currently, I give the nod to Portland's and Seattle's strong liberal / progressive / green / Democratic Party stronghold that is playing a part in the Silicone Forest attractiveness to more than a few High Tech engineers. I have no knowledge of any ratio or percentage this makes in the desirability of the PNW for high tech engineers, but it is there.

I also feel the Left-Coast has a reputation of diversity tolerance for Sub-Content Indians and Asians. This will attracts desirable H-1 visa workers. Which in turns adds to the community's draw as a employment place for native born USA engineers to gain diversity exposure to other High Tech cultures overseas. Portland and Seattle have really great Asian grocery stores, savory spice shops, and clothing and notions stores which the Asian worker can find comfort foods and products.

Oh, BTW, I am not talking about office managers, accounting types, factory workers, supervisors, production managers, and other very necessary workers for production of High Tech products, I am talking about the rarefied, maybe even esoteric, strata of employees that design the High Tech products. The production and manufacturing is mostly overseas now.

I reject, completely, the argument that Oregon, and Portland in specific, has a anti-business tax policy. I feel you pay for what you get. If the community wants an extensive bike paths, then the community should pay for it. And so on. Genuflection, Veneration, and other acts of obeisance to the god of greed for the COMPANY'S PROFITS is not always in the driving force in the wants of the individual high tech employee. Mileage may vary with each individual. Low taxes means low public sector services. This deteriorates and affects the community's desirability factor.

Phil
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Old 06-17-2010, 10:04 AM
 
Location: Beaverland, OR
588 posts, read 2,638,655 times
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Quote:
Originally Posted by zeta_male View Post
Hi,

So basically, I've lived here all my life, and I'm wondering why so many people across the nation think that Portland and Seattle could be the next Silicon Valleys in the next 10-15 years?
If you had posted this 25 years ago, it would make sense. The west side of Portland has been known as Silicon Forest for years... it is not an up-and-coming high tech area. In fact, I would posit that it reached its peak around the year 2000-2002 and has been on the decline for at least 5 years. Intel has shed jobs and closed a plant or two, Tektronix is just a shell of its former self, several other IC fabs have closed, lots of smaller companies like InFocus and Planar are just barely getting by, etc. There's been some inroads in solar panel manufacturing lately, but that's about it.

Who are these "so many people" and why are they so misinformed?
Quote:
Originally Posted by philwithbeard View Post

I reject, completely, the argument that Oregon, and Portland in specific, has a anti-business tax policy. I feel you pay for what you get. If the community wants an extensive bike paths, then the community should pay for it.
Phil
I'm no expert, but everything I've read (and I've read a lot) indicates that Oregon DOES in fact have a rather anti-business tax policy. If the tax policy is favorable, as you contend, how do you explain the very poor business climate here? Very few large companies choose to locate or expand here; having only two Fortune 500 company HQs in the entire state is frankly embarrassing. I've been here since 2003 and am one of the high tech design engineers you mention - and I've yet to see any significant expansion in the Portland area's core employers, particularly in the high tech arena. I'm pretty sure this is a contributor to the crappy unemployment rate we have here.

In Austin Texas (where I am from), there is not anywhere near the level of red tape, tax barriers and bureaucracy to cut through to set up shop. In a period of 8 years, I saw Dell quintuple in size, Samsung build a giant memory fab, Motorola build an entire new design center, Applied Materials, AMD, IBM, and a host of other companies dramatically expand. And Austin is deemed by many high tech folks as a desirable place to live.

P.S. It's silicon, not silicone.
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Old 06-17-2010, 10:32 AM
 
Location: Portland, Oregon
10,424 posts, read 17,758,892 times
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Modern technology businesses in the Portland area actually started with Tektronix. They created their own engineer development center. Note that Tektronix is(was) "hardware".

After GP left town several community leaders took a look at our business future and concluded that forest products couldn't carry the load. The search was on.

The result of this effort included inducing Intel to establish a facility here. They had several conditions, one of which was addressing advanced professional education. The in-house Tek program morphed into Oregon Graduate Institute. There may also have been some overlapping product development at the time because Tek engineers were doing ceramics research. Tek is located in Beaverton, Intel explored sites convenient to their education program. Land was available near Hillsboro but their school system didn't measure up to Intel employee's demands, that was fixed.

Portland was also attractive because it is a short flight from San Jose and Hillsboro airport can handle corporate aircraft. I have heard that some Silicon Valley engineers essentially commute to Hillsboro. It is no accident that industry paid a chunk to link the Hillsboro MAX to PDX.

Because of the efforts to attract Intel other high tech firms were attracted. There needs to be a critical mass of professionals in related fields to really get the ball rolling.

Tek located in Beaverton because that was where land was available and employees voted for that location. I don't think the site was incorporated at the time, in fact it may still not be incorporated (note the recent battle between the City of Beaverton and NIKE).

Seattle is a software town.
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Old 06-17-2010, 03:01 PM
 
172 posts, read 484,772 times
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**Begin Rant**

Oregon will never make serious inroads in tech until a lot of changes are made in the way the state and local municipalities are governed and the view of "business" is changed.

If you look at what common factors exist in the true U.S. high-tech centers today: Silicon Valley, Boston, NC Research Triangle and also Dallas and Austin to a degree, you see that they all share the common trait of having world class colleges and universities that spit out the best and brightest in science, engineering and math and so provides a consistent source of highly qualified workers. Oregon does not and so that is one major disadvantage.

Some states have made progress in overcoming this through favorable tax and business licensing and registration fees to lure companies and talented people from elsewhere. Oregon has gone the other way. The business tax scheme, while not outrageous, does not provide enough incentives to lure companies from somewhere else - it is uncompetetive given the lack of other attractions such as a highly qualified tech workforce. Additionally, the volume of red tape and also licensing and registration costs for small businesses are through the roof. There was a recent article in the Portland Business Journal about a local sports bar owner who recently wanted to expand his bar/restaurant. All of the fees he would have had to pay to the city totaled over $40,000!!!!! He couldn't afford it and so could not expand. Oregon's state tax policies combined with the bloodthirsty local municipalities combine to stifle business. Sorry, but that is reality. If nothing changes, the state will continue to bump along at the top of the unemployment statistic sheet where they have been for more than a decade and there will never be a silicon forest...we will be lucky to have a few sickly trees.

It's not rocket science to see that when your state budget depends primarily on personal income tax that you want to maximize employment to maximize tax revenue. You maximize employment by luring businesses in with low tax and fee structures. These businesses pay for themselves 10 times over by employing people who pay personal income taxes. This simple economic principle is lost on many people in this state - probably due to the poor education system.

**End Rant**
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