SILICON BEACH EFFECT
The moniker is silly and boosterish, but there’s no denying the growth of media and technology businesses in Santa Monica, Venice, El Segundo and Culver City. A rough-but-telling barometer of economic impact is westbound traffic along the 10 during morning rush hours. Many of these commuters are working at software houses, Web designers, ad agencies, and videogame publishers. It’s part of the digital melding that’s taking place before our eyes. From this week’s Business Update on KPCC:
Mark Lacter: The vacancy rate in Santa Monica was running at 11 percent – that’s compared with 18 percent for downtown L.A. Asking rents in Santa Monica are way more expensive, as well. That assumes you can get what you need – businesses wanting to expand there have found it hard to find large amounts of office space, especially the creative type space that these companies say they need.
Steve Julian: Creative space, to me, sounds like exposed ceilings, you can see the beams above you, an open layout, maybe the sound of waves lapping…
Lacter: Don’t forget the surfboard next to your desk. Now, the obvious reason that space has gotten so tight is that workers and owners want to be close to the water, and they also want to be in an urban environment. But, there’s another important reason: they want to be close to each other. And that’s because they often work together – the software house might be developing a program for the Internet marketing company or the special effects company.
Julian: What size businesses are these?
Lacter: Not large ones, and their individual impact on the employment market in L.A. isn’t overwhelming; add up the categories and you’re looking at about 100,000 jobs in all of L.A. County. That’s out of a workforce of almost 4 million. But you know sometimes economic impact goes beyond raw employment numbers. A few weeks ago, we talked about all the additional people working in hotels and restaurants last year, but how their wages are often too low to stimulate much economic activity. But then there are these Westside companies and the potential impact is a lot greater.