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    X-Raying Silicon Valley's Guts

    Clusters of clusters form fabric of tech Mecca

    Excellent article in NY Times by Steve Lohr examining the inhomogeneity of Silicon Valley's technology clusters.

    Silicon Valley, the wellspring of the digital technologies fueling globalization, is itself a collection of remarkably local clusters based on industry niches, skills, school ties, traffic patterns, ethnic groups and even weekend sports teams.

    “Here, we have microclimates for wines and microclimates for companies,” said John F. Shoch, a longtime venture capitalist.

    Silicon Valley, home of Stanford and other universities, has long been the model of success for a modern regional economy, and policy makers worldwide have tried to emulate it by nurturing high-tech companies around universities. There have been a few winners, like the semiconductor manufacturing hub in and around Hsinchu Science Park in Taiwan.

    Yet a look at the microclusters within Silicon Valley demonstrates the business relationships, the social connections and the seamless communication that animate the region’s economy. It also suggests the human nuance behind the Valley’s success and shows why that success is not easy to copy, export or outsource.

    “These microclusters turn out to be a very efficient way to innovate, to see what works and what fails, and do it extremely rapidly,” said AnnaLee Saxenian, an expert in regional economies and a professor at the University of California, Berkeley."

    The articles says, a start up will located depending on its segment of the information technology industry:

    New companies, and emerging industry clusters, seek to build on and tap the skills of older clusters. While there are plenty of exceptions, it is generally true that hardware clusters — semiconductors, disk drives and network equipment, for example — are in the South Valley, around San Jose and Santa Clara. The actual manufacturing of hardware, of course, moved to cheaper places years ago. What remains in the Valley is product design and engineering.

    Moving farther north in the Valley typically means moving farther away from the guts of the machine and climbing up the tiers of computing — from chips to layers of business and consumer software and then into San Francisco, home to people with online advertising and digital design skills.

    For start-ups, the location decision can be critical, particularly because of the area’s notorious traffic jams. Lately the calculations about traffic, talent and real estate have become trickier because the Valley’s economy is surging again, driving up rents and salaries and clogging roads.

    But there are other drivers for the clusters: social connections between Standford alumni or ethnicity.

    New companies with deep ethnic links — mainly Indian and Chinese — are sprouting up in the Valley. Often, ethnic background is but one layer of social relationship. SnapTell, a start-up that seeks to marry image-recognition technology, cellphones and marketing, was founded last year by G. D. Ramkumar and Gautam Bhargava, Indian computer scientists and Valley veterans. The company has 10 employees, six of whom have Ph.D.’s and three of whom are from Stanford.

    The shared backgrounds, interests and schools make for frictionless communication that fosters rapid innovation.

    Even weekend sports, it seems, become the basis for informal business clusters in the Valley. Start-up ideas or job opportunities often surface on the sidelines of a weekend soccer game or, increasingly, cricket match. Giriraj Vengurlekar, an engineer who lives in Sunnyvale, plays in one of the Valley’s cricket leagues, which now has 40 teams. His team, the Centurions, includes employees of Sun Microsystems, eBay, Cisco, Yahoo and other technology companies.

    Last year, Mr. Vengurlekar joined Serus, a start-up that makes software for managing offshore manufacturing operations. The cricket pitch, he finds, is a good place to scout recruits or learn of job openings. “People don’t play cricket to get jobs, but it definitely happens,” he said. “Cricket definitely spills over into business.”

    Finally, Silicon Valley is monolithically geeky.

    There is a certain visual identity to the clusters, and a hint of cultural tension among them. The clearest schism, perhaps, separates Valley dwellers from San Francisco residents.

    The hard core in the Valley jokes that San Francisco, with its Internet advertising and design cluster, has a “high P.I.B. coefficient,” for People in Black. The city’s companies also have more women than those in the Valley. San Franciscans regard Valley engineers as denizens of a style-free suburban zone for whom being well-dressed means wearing jeans and a T-shirt with a company logo.

    As Marc Adreessen, co-fonder of Netscpae, and two other Valley start-ups observes:

    “The nerds with minimal social lives like me are well down in the Valley, and the cool kids with the trendy glasses and Prada shoes who like to go to parties are in San Francisco,” Mr. Andreessen said in an e-mail message. “You can guess who has the leg up in building companies.”


    Texas' Mega Highway

    Plans for massive new road network generate hope and suspicion

    Perhaps no other emerging mega region is generating as much political friction as the Texas Triangle. It's not concerns over sprawl or environmental issues that overhang the TXT, but something much thornier--the Trans Texas Corridor (TTC).

    From the standpoint of regional development and integration, the TTC promises many benefits by adding massive amounts of transportation bandwidth for ground travel through two main projects. The first is TTC-35, which will parallel the existing I-35, and extend 800 miles from the Rio Grande Valley to north of Dallas/Fort Worth. According to the Texas Department of Transportation, today 45 percent of all Texans, 9.5 million, live along the I-35, and that number is projected to increase to 15 million by 2025.

    As envisioned, TTC-35 (map) will include as many as six lanes for passenger vehicles and up to four lanes for large trucks. The corridor will also have up to six rail lines for high-speed passenger rail between cities, high-speed freight, and conventional commuter and freight transit. Furthermore, planners are suggesting that the route can accommodate a 200-foot-wide dedicated utility zone for water, oil, and gas pipelines, and transmission lines for electricity, broadband, and other telecommunications services.

    Such a massive logistics artery running through central Texas would have a huge impact. Establishment of TTC-35 is widely seen as the catalyst needed to make a combined San Antonio-Austin metroplex a reality. Furthermore, the TTC would have a large impact on international trade as most U.S. imports from Mexico and South America travel through Texas, as do most exports to Mexico and South America--estimated at 79 percent.

    A similar route is planned called I-69/TTC (map). It would be part of the 1,600 mile-long I-69 national highway that would connect Mexico, the U.S., and Canada. The Texas leg of I-69 would run from the Mexico border to Houston and then on to northeast Texas.

    Although TTC is pitched as a unmitigated good for Texas, it has become a hot-button issue for many Texans and other Americans. Among the many wrongs projected to come from the TTC project is a rather ominous theory that the so-called NAFTA Superhighway is a linchpin in the creation of a "North American Union," an entity formed from the merger of Mexico, the U.S., and Canada.

    The alleged seeds for the NAU were planted by the creation of the SPP in 2005. All governments involved say the NAU is myth, but conspiracy theories continue to abound. (Well done Seattle Times article on the subject.)

    Some U.S. presidential candidates have even made reference to these theories by including language in their platform regarding protecting the sovereignty of the United States. It remains to be seen whether opponents will be able to generate enough counterpressure to impede the TTC. .:.


    Texas Triangle Sightings [1.3]

    Interesting discussion thread on Richard Florida's Creative Class blog regarding Houston's place in the Texas Triangle versus being part of a Gulf Coast mega region. Tory Gattis at Houston Strategies was the instigator of this thought-provoking conversation. .:.

    Texas Triangle Sightings [1.2]

    A short study by three University of Texas academics, on the America2050.org site, looks at the Texas Triangle and historical transportation linkages. "Connecting the Texas Triangle: Economic Integration and Transportation Coordination by Ming Zhang, Frederick Steiner, and Kent Butler (5 MB)" .:.


    Emergence of Transnational City States

    New York and London new form of city

    A recent Financial Times article argues New York and London have emerged as a unique global city state that transcends national boundaries. GEO

    Mega Watching

    Creative Class proponent releases study of mega regions

    Richard Florida who argues that cities should work to retain their "creative class" as a key to economic prosperity has released a new report looking at the world's 40 largest mega-regions, in the U.S., Europe, Middle East, and Asia. The report ranks the regions and includes interesting qualitative data as the number of patents issued to the region. GEO

    Texas Triangle Sightings [1.1]

    Some new posts over at Houston Strategies by Tony Gattis, whose urban planning site regarding Houston is quite impressive.

    Texas Triangle Sightings [1.0]

    Two recent posts from Elise Bright, an urban planning professor at Texas A&M, at 4D Planning. The links reference an extensive survey of the TXT region:


    The Waterman Cometh

    T. Boone Pickens making waves with new water pipeline

    Bloomberg News reported on November 6 that T. Boone Pickens "may have engineered one of his shrewdest takeovers yet." The octogenarian chairman of BP Capital LLC, Dallas, has devised a way to create a water district on eight acres of land outside Amarillo. Pickens hopes to use the land to condemn property and sell tax-exempt bonds to build an expansive water pipeline.

    The financial news service reports that Pickens' plan includes a 328-mile, $2.2 billion pipeline to move water from the panhandle, which is home to the 174,000-square-mile Ogallala Aquifer, to the suburbs of Dallas and San Antonio. Best known for his dealings in oil, Pickens' Mesa Water Inc. has acquired 200,000 acres of Texas water rights and may seek to double that amount.

    In addition to the multi-billion dollar pipepline, Pickens' vision includes piggybacking windpower farms on the surrounding ranchland and feeding their electricity into to the grid through a transmission network built along the water pipeline's right-of-way. The amibitious project could cost upwards of $10 billion altogether, however the idea is meeting with some resistance that could hamper plans.

    Salon.com ran an article on the subject "High noon at Ogallala aquifer" in Feb. 2001. .:.

    Image: Ogallala Aquifer, USGS

    One that Got Away

    Former Austin start-up nets big money

    Originally founded in Austin in 2002 with backing from Sevin Rosen and ARCH Ventures, Innovalight Inc. has just raised $28 million to bring its new clean energy technology to market. In early 2005, the company moved from Austin to Minneapolis, Minn., stayed a year, and moved to Santa Clara, Calif. (close to home for the firm's CEO Conrad Burke), and is finally making settling in Sunnyvale, Calif.

    The company originally hoped its technology could lead to a nanotechnology-based light bulb that would never wear out. That technology has since been applied to a create thin-film silicon solar technology. VentureWire reports that Innovalight is one of the first companies that is moving into the manufacturing stage with its thin-film solar cells, which will be funded by the latest round of investment.

    The irony in the constant moving for Innovalight is that Austin is turning out to be a hotspot for clean energy technology, and has been judged a better place to start such companies than places like Silicon Valley. .:.

    Growth Engines

    Inc. Magazine debuts new super list

    Having previously published the Inc. 500, the New York-based publication recently upped the ante by publishing the Inc. 5,000. The list includes 325 Texas-based companies for 2007, which can be viewed here. The state of New York had just 288 listees, while California had 667. .:.

    After the Afterglow

    TXU's chief executive ponders future

    Following the $45 billion buyout of TXU by private equity groups KKR and TPG, the Dallas Morning News reports, John Wilder will leave the company with $270 million. At just 49 years of age, Wilder now must figure out what he plans to do next. The DMN today details the contents of a letter Wilder sent out to TXU employees, which includes taking six months off to work on his "life list" of to-do items and possibly pursuing board positions with other energy companies.

    Some of those personal pursuits Wilder plans on doing include riding a camel in the desert, learning ballroom dance with his wife, reading the Bible cover to cover, and spending more time with his son. A copy of the entire letter is available here. Three things he said he won't do is run for political office, hunt or fish everyday, or write a book. .:.

    TEXecutive Index

    The Lives and Times of Texas Triangle Business Leaders

    1. Adams, Wade; Chairman of the Board - Texas Nanotechnology Initiative [Austin]
    2. Ansari, Anousheh; [Dallas]
    3. Armstrong, Lance; Chairman- LiveStrong Foundation [Austin]
    4. Caster, Sam; [Dallas]
    5. Cuban, Mark [Dallas]
    6. Dell, Michael S.; Founder, Chairman & CEO - Dell Inc. [Austin] [Updated: 2/2/2009]
    7. Hamill, Denny; Treasurer - Texas Nanotechnology Initiative [Austin] [03-02-09]
    8. Haynes, Richard "Racehorse" [Houston]
    9. Jamail, Joe [Houston]
    10. Kirk, Ron; Partner, Vinson & Elkins [Dallas]
    11. Kordzik, Kelly K.; President - Texas Nanotechnology Initiative [Austin] [03-02-09]
    12. Langdale, Mark; President - George W. Bush Foundation [Dallas] [Updated: 1/29/2009]
    13. Perot, Ross [Dallas]
    14. Persinger, Terry L.
    15. Pickins, T. Boone; Founder - Mesa Energy [Dallas]
    16. Rogers, Lorene; former-President - Univeristy of Texas, Austin [Dallas]
    17. Rowling, Robert B.; Owner and Chairman - TRT Holdings, Inc.
    18. Stanford, R. Allen; CEO - Stanford Group [Houston]
    19. Susman, Steve [Houston]
    20. Wilder, John
    21. Ziegler, Jeff .:.

    Tour de Texas

    Armstrong running circuit to raise support for cancer bond

    The Chronicle reported on October 10, 2007, that Lance Armstrong was in Houston to build support for a cancer research effort. It is part of an effort by the the seven-time Tour de France winner and cancer survivor to raise voter awareness of a new proposition on the Nov. 6 ballot.

    Known as Proposition 15, the proposal would enable the sate to issue $300 million a year in bonds over 10 years to cancer research. Potential recipients would be universities and biotechnology research companies, who would compete for grants made by a state cancer research center. .:.

    Enterprise Index

    Companies referenced on .:.TexasTriangle.

    Ever the Contrarian

    Perot's Hillwood goes against the grain in real estate

    The Ross Perot-owned real estate development company Hillwood [Plano] is developing an $86 million boutique hotel in Atlanta's Midtown area. Such hotels cater to well-heeled travelers, promising high levels of hospitality, service, and discretion.

    Hillwood is well known for its work in Dallas as the developer of the American Airlines Center and the $3-billion, 75-acre mixed use Victory Park project (above). .:.

    Mannatech Co-Founder Resigns

    CEO steps down, remains chairman

    Under pressure from shareholders and regulators accusing the company of using illegal sales tactics, Sam Caster, who co-founded Mannatech Inc. [Coppell] in 1993, resigned as CEO. He retains role as board chair, reports the Wall Street Journal.

    The board of directors selected Terry L. Persinger, current President and CEO, as interim CEO.

    The $410 million dietary supplements maker went public in 1999, and has experienced rapid growth. However, the Texas attorney general is pursuing the company for false marketing claims, and a number of shareholder suits have been filed against the company. .:.

    Houston's Most Popular, or Hated, Lawyer

    Attorney's hourly fee breaks four figures

    With major league baseball players able to make as much as $15,000 an hour, why should a major league lawyer like Houston's Steve Susman, co-founder of plaintiffs' litigation firm Susman Godfrey LLP, worry about raising rates to a measly one-grand-an-hour rate? Well, according to the Wall Street Journal, law firms around the country have grappled with the question for years--fearing client backlash.

    Money quote: "We have viewed $1,000 an hour as a possible vomit point for clients," an unnamed partner in a New York firm told the Journal.

    But with lawyer fees rising at 6 to 7% a year since 2000, reaching the four-figure mark was inevitable. Houston's Susman is known for trying large cases around the country. He is one of many attorneys cited in the article who have decided that, yes, their time is that valuable.

    Driving the increases, in part, are the rising salaries firms are paying associates. Many firms around the country have decided to raise first-year associate pay to $160,000 a year to hire the best law school graduates. .:.

    Born to Build

    Serial entrepreneurs are a different breed

    The psychological make-up of entrepreneurs who found and grow multiple ventures does seem to be different than the average joe, reports The Wall Street Journal on August 20, 2007. According to a 2000 study, such entrepreneurs had a higher propensity for risk, innovation, and achievement. They were less scared of failure, and were able to recover better when failure did happen.

    Those that had initial successes also had the advantage of being able to call on network of contacts for capital, advice and recruitment to launch new endeavors. The paper cited multiple examples of such types of entrepreneurs, including Anousheh Ansari .

    Ansari, an Iranian-American, recently made news by becoming the first woman space tourist--paying Russia to hitch a ride on one of their rockets to spend one week on the International Space Station. Her family is also the money behind the $10 million Ansari X-Prize, which was created to spur a non-governmental space race among private inventors.

    Her current company is Prodea Systems, Inc. [Plano] , which designs software for managing so-called "digital homes" and their multimedia systems. It has locations in Chennai, India, and Beijing, China. Her previous success is Telecom Technologies, Inc. [Richardson; Telecom Corridor], which she co-founded with her husband, Hamid, and brother-in-law, Amir, in 1994. It was ranked by Inc. Magazine and Deloitte & Touche as one of the fastest growing comnpanies in the country. It sold for $750 million to Sonus Networks in 2000. .:.

    The Technically Hip

    iPhone sales show tech hotspots in the Triangle

    Even before its launch, iPhone was being feted as one of the biggest product launches in tech industry history. And from the lines at stores, media attention, and more than 500,000 devices sold over a single weekend, iPhone seems to have earned such laurels.

    Put another way, Americans went to the polls, voted (with their wallets and pocket books), and elected iPhone to the coveted positioned of New, New Thing. In this light, it's interesting to look at exit polling data from the iPhone launch in Texas.

    Altogether, Apple has 12 retail sites in Texas (all in the Triangle): 5 stores in the Houston metro (Friendswood, The Highlands, Sugarland, and 2 in Houston proper); 4 in Dallas-Fort Worth (Dallas, Plano, Highland Park, and Southlake); 2 in Austin; and 1 in San Antonio.

    At the end of opening weekend, CNNmoney.com reported that both Austin's stores were out of phones. As was Dallas. The remaining 9 stores throughout the state had phones still in stock, however. In contrast, CNN.com reported that 34 of 36 stores in California were out of stock at the end of the weekend (both stores still with iPhones were in San Francisco--Apple's home turf). While in New York, only 1 of the state's 12 stores were out of stock.

    Assuming there were no logistical foul-ups, which resulted in some stores being shorted, it would seem that tech early adopters abound in Austin - no surprise there. The Big D also is home to techie hipsters, not surprising given the concentration of big technology enterprises in the city. (It was reported that one eager shopper in Dallas paid $800 just to get to the front of the line to buy herself an iPhone.) .:.

    Riding Google's Coat Tails

    Dell partners with search giant

    An interesting new white paper was released by Austin-based Dell this month. The paper details how the computer maker has partnered with Google to produce an enterprise search appliance, packaged in a distinctive yellow enclosure.

    Not the first such pairing, last year, Dell struck a deal to pre-load its PCs with Google's search software and to point users to a joint Google-Dell homepage. How successful these moves have been is not clear, but if nothing else Dell is able to bask in the glow of the hottest company in technology even as its own halo has dimmed. .:.

    Phone Hacks

    Austin firm can't wait to get inside Apple's iPhone

    Forbes.com posted a story detailing how an Austin-based Portelligent sent engineers to wait in line for Apple's new iPhone - intent on buying one or two phones for the purpose of tearing them apart.

    According to Forbes, Portelligent, and companies like it, "sell reports detailing the processors, memory and materials used in each device to customers that include consumer electronics manufacturers and analysts."

    The reports determine which companies supplied what components to Apple, something the firms themselves are not allowed to disclose, as well as allow business analysts to determine Apple's gross margins.

    With anticipation running high for the iPhone, what's inside the device is very significant. The Wall Street Journal reported on June 28 that Apple's market capitalization has risen $34 billion since it annonced the iPhone and its plan to sell 10 million units. [San Antonio-based AT&T also stands to benefit greatly from iPhone because the mobile phone works only on AT&T's network.] .:.

    Ties that Bind

    Family biz owners take note

    Baylor University's Hankamer School of Business [Waco] is looking for Texas' best family business."The family- owned firm is extremely important in the economy of the United States, comprising 80 to 90 percent of all business enterprises in North America," said J. David Allen, Director of the John F. Baugh Center for Entrepreneurship. "When family-owned firms are able to continue the business into the second and third generations they have achieved what very few are able to achieve."

    Criteria for application include being a business organization, public or private, home based in Texas that has one or more of the following characteristics: 1) has been owned and operated by different generations of a family; 2) the potential exists for ownership to be passed on to a younger generation; 3) more than one member of a family has active employment in an organization owned by a family; 4) a family holding company which is presently operating a business.

    Applications for the 18th annual event will be accepted through August 15 and the award ceremony will take place in November. Winners will be chosen in three categories based on the size of the company: small, medium and large. The Hankamer School will also distribute awards based on the special categories ofFamily Values Award, Community Commitment Award, Fastest-Growing FamilyBusiness Award, Well-Managed Family Business Award, Founders Award andHeritage Award.

    Winners from last year's event include First Dallas Holdings, Inc. of Dallas in the small business category, Pulliam Pools of Fort Worth in the medium category, and DAVACO, Inc. of Dallas in the large category. .:.

    Houston Fortune 1000

    Below is a list of the 49 Fortune 1000 companies headquartered in the Houston area.

    #5 ConocoPhillips [Houston ]
    #30 Marathon Oil [Houston ]
    #65 Sysco Corp [Houston ]
    #103 Plains All American Pipeline [Houston ]
    #106 Lyondell Chemical [Houston ]
    #177 Enterprise GP Holdings [Houston ]
    #181 Waste Management [Houston ]
    #186 Continental Airlines [Houston ]
    #201 (TAKEN PRIVATE '07) Kinder Morgan [Houston ]
    #229 Reliant Energy [Houston ]
    #233 Anadarko Petroleum [The Woodlands ]
    #259 TEPPCO Partners [Houston ]
    #270 CenterPoint Energy [Houston ]
    #278 Baker Hughes [Houston ]
    #293 Apache [Houston ]
    #324 Smith International [Houston ]
    #333 National Oilwell Varco [Houston ]
    #351 Enbridge Energy Partners [Houston ]
    #377 Group 1 Automotive [Houston ]
    #449 El Paso [Houston ]
    #462 Frontier Oil [Houston ]
    #495 BJ Services [Houston ]
    #537 FMC Technologies [Houston ]
    #539 EOG Resources [Houston ]
    #553 Cameron International [Houston ]
    #616 (TAKEN PRIVATE '07) EGL [Houston ]
    #632 American National Ins. [Galveston ]
    #660 Noble Energy [Houston ]
    #664 Benchmark Electronics [Angleton ]
    #674 Southern Union [Houston ]
    #681 US Oncology Holdings [Houston ]
    #745 Pride International [Houston ]
    #747 Westlake Chemical [Houston ]
    #750 Stewart Information Services [Houston ]
    #796 Adams Resources & Engy. [Houston ]
    #823 Quanta Services [Houston ]
    #836 HCC Insurance Holdings [Houston ]
    #848 Quanex [Houston ]
    #855 Dynegy [Houston ]
    #879 Oil States International [Houston ]
    #892 Men's Wearhouse [Houston ]
    #910 Grant Prideco [Houston ]
    #921 Metals USA [Houston ]
    #925 Goodman Global [Houston ]
    #931 Service Corp. Intl. [Houston ]
    #933 Pogo Producing [Houston ]
    #950 ExpressJet Holdings [Houston ]
    #953 Newfield Exploration [Houston ]
    #954 Hanover Compressor [Houston ]

    Weighted heavily to energy, Houston's economy has the densest concentration of large companies in Texas. For every 1 million residents, Houston has 8.8 Fortune 1000 companies. Dallas-Ft. Worth has nearly as many, with 7.6 per 1 million, and San Antonio-Austin have 2.6 per 1 million. .:.

    Metroplex Fortune 1000

    Below is a list of the 43 Fortune 1000 companies headquartered in the DFW Metroplex.

    #2 Exxon Mobil [Irving ]
    #101 AMR Corp [Fort Worth ]
    #111 Electronic Data Systems [Plano ]
    #116 J.C. Penney [Plano ]
    #137 Kimberly-Clark [Irving ]
    #155 D.R. Horton [Fort Worth ]
    #157 Burlington Northern Santa Fe [Fort Worth ]
    #162 Texas Instruments [Dallas ]
    #174 Fluor [Irving ]
    #234 (TAKEN PRIVATE Oct. '07) TXU [Dallas ]
    #246 Dean Foods [Dallas ]
    #258 Tenet Healthcare [Dallas ]
    #276 Southwest Airlines [Dallas ]
    #306 Energy Transfer Equity [Dallas ]
    #316 Commercial Metals [Irving ]
    #346 Celanese [Dallas ]
    #372 Atmos Energy [Dallas ]
    #410 Blockbuster [Dallas ]
    #417 Triad Hospitals [Plano ]
    #424 Affiliated Computer Svcs. [Dallas ]
    #426 GameStop [Grapevine ]
    #466 RadioShack [Fort Worth ]
    #482 XTO Energy [Fort Worth ]
    #502 Brinker International [Dallas ]
    #517 Neiman Marcus [Dallas ]
    #518 Holly [Dallas ]
    #541 Michaels Stores [Irving ]
    #559 Lennox International [Richardson ]
    #586 Torchmark [Mckinney ]
    #603 Trinity Industries [Dallas ]
    #627 Crosstex Energy [Dallas ]
    #645 Flowserve [Irving ]
    #678 Sabre Holdings [Southlake ]
    #723 Pioneer Natural Resources [Irving ]
    #758 Zale [Irving ]
    #759 Rent A Center [Plano ]
    #788 Perot Systems [Plano ]
    #799 Builders FirstSource [Dallas ]
    #826 HealthMarkets [N. Richland Hills ]
    #859 Alliance Data Systems [Dallas ]
    #903 Pier 1 Imports [Fort Worth ]
    #913 ENSCO International [Dallas ]
    #916 AmeriCredit [Fort Worth ]

    Of note is that DFW has 7.60 Fortune 1000 companies per 1 million residents. Much higher than San Antonio-Austin, at 2.60, but less than Houston, with 8.8 Fortune 1000 per 1 million residents. Interstingly, also, is the fact the the Metroplex has just 1 company in the top 100, but it's a real giant, #2 Exxon Mobil. .:.

    Austin-San Antonio Fortune 1000

    Below is a list of the Fortune 1000 companies in Austin-San Antonio corridor.

    #34 Dell Inc. [Round Rock ]
    #16 Valero Energy Corp [San Antonio ]
    #27 AT&T [San Antonio ]
    #128 Tesoro [San Antonio ]
    #180 USAA [San Antonio ]
    #330 (TAKEN PRIVATE Sep. '07) Clear Channel Comm. [San Antonio ]
    #411 Whole Foods Market [Austin ]
    #414 Temple-Inland [Austin ]
    #779 Rush Enterprises [New Braunfels ]

    That means the combined San Antonio-Austin region, with 2.45 million people, has 2.60 Fortune 1000 companies per 1 million residents. By contrast, DFW has 7.16 such companies per 1 million residents, and Houston has the highest ratio at 8.8 companies per 1 million residents. This indicates a relative lack of large enterprises in the southwest corner of the Texas Triangle. .:.

    The Southwest Metroplex

    In 30 years, San Antonio and Austin could become one mega city

    The forces that brought together Dallas and Fort Worth to create the Metroplex are a harbinger of things to come in the southwest corner of the Texas Triangle. Using data from the U.S. Census Bureau, Dr. Robert Lang of the Metropolitan Institue at Virginia Tech has determined that DFW was the earliest example of what he calls a megapolitan region.

    Such regions are charactertized by having two or more core cities, separated geographically, but sharing a cloud of interacting and interrelating communities. Lang estimates that in the coming years, this very same process will result in the merging of the metropolitan statistical areas (MSAs) of San Antonio and Austin-Round Rock into a single metroplex. (Other such agglomerations around the U.S. include Phoenix-Tucson; Washington, D.C. and Richmond; Orland and Tampa; Los Angeles and San Diego.)

    Separated by just 85 miles, the two core cities will grow together to such a degree that by 2040 the two metros will essentially one continguous urban region, known as a consolidated metropolitan statistical areas (CMSA). And it could happen sooner.

    Today the two regions have a combined population of 3.96 million people. Thanks to high-growth rates, the population is expected to reach nearly 6 million by 2030. With Austin constrained in its ability to grow to the west, its expansion is moving south and north along the I-35.

    In fact, Lang found in his study, that the northern San Antonio counties of Guadalupe and Comal already have a significant percentage of residents commuting north to Austin. Based on the most recent U.S. Census data from the year 2000, 9 percent of residents in Guadalupe went north and 7 percent did in Comal. If this pace continues or accelerates, San Antonio and Austin will merge in the coming decades.

    The two core cities of Austin and San Antonio will retain their distinctive personalities, but the communities in counties to the north of San Antonio and the south of Austin will increasingly intermingle and merge. The rate of metroplexification may accelerate considerably if a plans to build a massive Trans-Texas Corridor along the I-35, connecting north Texas to Mexico, go through. .:.

    Clean and Mean

    Austin CEO named E&Y's Entrepreneur of the Year for region

    Ernst & Young announced on June 6 that Jeff Ziegler, CEO of Austin-based TechTurn, was the regional Entrepreneur of the Year winner. Ziegler's TechTurn collects, recycles, refurbishes, and remarkets technology products from large organizations to make a profit and minimize impact to the environment.

    TechTurn is a poster child for Austin's developing clean technology cluster. The Wall Street Journal reported that Austin even outpaces the vaunted Silicon Valley in this burgeoning area. So TechTurn's success seems particularly appropos.

    According to TechTurn, 300 of the Fortune 500 send their used technology to the company to be refurbed and resold around the world. As regional winner, Ziegler is now eligible to compete for the national E&Y Entrepreneur of the Year Award. .:.

    10-Gallon Headquarters

    Big business thrives deep in the heart of Texas

    Texas is home to some of the biggest companies on the planet. And the vast majority of the more than 100 Fortune 1000 companies are concentrated in the Texas Triangle. Below is a list of 22 firms that fall within 200 largest public companies in the U.S. (Clicking on a company will take you to a list of their annual reports filed with the SEC going as far back as 1994.)

    #2 Exxon Mobil [Irving]
    #5 ConocoPhillips [Houston]
    #16 Valero Energy Corp [San Antonio]
    #27 AT&T [San Antonio]
    #30 Marathon Oil [Houston]
    #34 Dell Inc. [Round Rock]
    #65 Sysco Corp [Houston]
    #101 AMR Corp [Fort Worth]
    #103 Plains All American Pipeline [Houston]
    #106 Lyondell Chemical [Houston]
    #111 Electronic Data Systems [Plano]
    #116 J.C. Penney [Plano]
    #128 Tesoro [San Antonio]
    #137 Kimberly-Clark [Irving]
    #155 D.R. Horton [Fort Worth]
    #157 Burlington Northern Santa Fe [Fort Worth]
    #162 Texas Instruments [Dallas]
    #174 Fluor [Irving]
    #177 Enterprise GP Holdings [Houston]
    #180 USAA [San Antonio]
    #181 Waste Management [Houston]
    #186 Continental Airlines [Houston]

    In addition to these, there are scores of other giant companies in the Texas Triangle. In fact, 79 other Fortune 1000 firms are at home inside the Texas Three-Step. .:.

    Ab Ovo

    S.A. startup gets national attention

    A new Web 2.0 venture is launching from San Antonio. Called Incuby, the site seeks to create a community where inventors can display their inventions to the general public, entrepreneurs, and investors.

    According to TechCrunch.com, "the team behind Incuby have toured the United States meeting with different inventor groups. They found that inventors are tired of the high costs associated with travelling and presenting at trade shows and are ready for 'a place of their own on the web.'"

    Incuby will move into a closed beta test in coming weeks, but is currently in development. However, being featured by the massively popular and influential TechCrunch.com gives the company a huge initial lift. .:.


    Money Centers

    What cities will dominate tomorrow's global finance industries?

    A recent special report, "Magnets for money," by The Economist runs a series of fascinating articles examining the global financial services industry. Today New York and London are the big dogs, but other cities, like Hong Kong and Singapore, show promise.

    Draws heavily on City of London's "The Globabl Financial Centres Index," which in turn draws on a study by the City of New York, "Sustaining New York's and the US' Global Financial Services Leadership." GEO

    The New New Math

    Fuzzy wuzzy was just an idear,
    Fuzzy wuzzy was worth $1 million squared.
    Fuzzy wuzzy's buyer wasn't very good with math was he.

    The New York Times reports on the vertigo-inducing valuations Silicon Valley companies are receiving lately. Money quote from Right Media’s chief technology officer, Brian O’Kelley, who became a millionaire after Yahoo! acquired his company for $850 million: “I have to say I giggled. There is no way we quadrupled the value of the company in six months.” GEO


    Knife Fight

    New tax has beverly Hills' cosmetic surgeons up in arms

    For decades, Beverly Hills' 2,400 doctors have taken advantage of a much lower tax rate than other commercial enterprises. That economic incentive along with access to a rich, image-obsessed clientele has given rise to a cosmetic surgery cluster, the Wall Street Journal reports. Now the city wants to significantly raise its tax rates for doctors, but the surgeons are fighting back using both sticks and carrots. While threatening lawsuits and mass exoduses, they're arguing they are an economic net good because they attract wealthy individuals from around the world to Beverly Hills for surgery. The city is sclaing back its plans, and hopes to reach a compromise by the end of the year. GEO

    Paris Gets Serious

    France loosens reigns, tries to stay competitive

    With London and New York City the top two updisputed financial centers of the world, Parisians are making changes to keep up, reports The Internation Herald Tribune. The French are looking for ways to reduce the regulatory burden of doing business in France, including permitting financial information to be submitted only in English. Pressure on the French is substantial. A new study, sponsored by the City of London, ranks the top 50 world financial centers. Paris comes in at only #11, just better than Toronto and not as good as Geneva, meaning plenty of work will need to be done. GEO

    Magnate Magnet

    London excels at drawing super rich

    Yet another reason London is emerging as the world's financial center is its ability to attract the most well-heeled indviduals on the planet. The Wall Street Journal reports that London is experiencing a boom in billionaires, and that they aren't home-grown. From Iceland to India, the gigawealthy are settling down in London. The paper reports that of the 10 richest individuals in the U.K., only three are originally from there. They are being drawn by low taxes, and ease of conducting business around the world. GEO

    Desperately Seeking Creatives

    New empirical study looks for Europe's "creative class"

    The JENA Economic Research Papers group released a paper that tries to identify where Europe's creatives reside, and what impact they have on the economy. The study seeks to put numbers to Richard Florida's book, The Rise of the Creative Class, which argues that the so-called creative class is important to urban and economic development. Lures for such creatives include cultural and social institutions, and a diverse environment open to potentially hedonistic ideas. Florida argues strongly against social capital thinkers like Robert Putnam in Bowling Alone. His hypotheses are not without critics, which includes Joel Kotkin, author of The City. GEO


    High Speed Rail Booms

    Airlines' loss is Amtrak's gain

    Just this year, the number of commuters using Amtrak has grown by 6%. The Wall Street Journal reports that the biggest surge in ridership since the 1970s. For the high speed Acela line running between New York and Washington, D.C., ridership is up 20% in just 10 months. The paper attributes the rise to increasing delays and security hassles with flying, making trains a good option for the estimated 10,000 daily train and plane commuters traveling between New York City to D.C.

    Accompanying the article is an interview with Amtrak's CEO Alex Kummant. GEO


    The Great Warm North

    Competition for boreal real estate is heating up

    When 7,000 airline passengers were grounded for a week in Newfoundland, Canada, because of 9-11, something amazing happened, reports the Wall Street Journal on August 8, 2007 . Many enjoyed their unplay stay so much, they kept coming back. They discovered a scenic coast line complete with icebergs and humpback whales, and an average temperature that has risen 4 degrees in the last 20 years. Seaside cottages cost only about as much as an SUV, reports the newspaper, and some areas are becoming tourist, and real estate, hot spots, such as Twillingate.

    Canada, it seems, stands to see its overall prospects brighten as global temperatures climb. In fact, there are already hints of geopolitical tensions on the rise up in the Artic circle, as a result of changing climate. The Northwest passage, which allows ships to sail from the Pacific to the Atlantic along a northerly route, which is shorter (2,480 miles less) than using the Panama Canal, is staying passable longer because of reduced ice. Canada is increasing its military presence in the area, reports Fox News, to assert its control of this emerging international shipping lane. The U.S., however, asserts it is international waters, and during the Cold War had long sent submarines and navy vessels through the strait .

    There is also the promise of untapped oil resources, which is causing friction between northern countries. The AP reports that Russia is working to create a legal case for their claim to millions of square kilometers of territory under the Arctic Ocean. International law says that a country can claim rights to seabed within 200 miles of its continental shelf. And new research is showing that Russia's territory may extend farther beneath the sea than previously thought. In early August, Russia even went so far as to recreate an inner space version of the Moon landing by sending a sub to the bottom of the Arctic to drop a titanium Russian flag, symbolically claiming the territory. The prize is a possible 10 billion tons of oil and gas deposits. GEO


    Middle Eastern Boom

    Economic expansion taking place in former "economic backwaters"

    Although explosions are what one thinks in terms of the Middle East and North Africa (MENA), the region is seeing an economic expansion that is giving new vitality to the region, The Wall Street Journal reported on July 19.

    Inflows of foreign direction investment in MENA has quadrupled over the past six years from less than $5 billion to nearly $20 billion. That number doubles when including Turkey, a Muslim country that straddles the divide between Middle East and Europe. (Isreal is counted separately, but it too is experiencing rapid growth.)

    Overall the economies in that region are growing at more than 5% a year, which beats most developed countries (though not as fast as China's 8% growth). Although oil is still the big story, oil-producing countries brought in $1.5 trillion in revenue between 2002 and 2006, those economies are looking to outside investors to diversify. Leading the charge are places like Dubai and Abu Dhabi.

    The paper notes: "The real test of the Middle East's unprecedented investment boom will be whether it creates jobs--and with them the sort of budding middle class that is driving the dynamism of China and India."

    Demographically speaking, half the 300 million people in the region are under 20 years old, and employing them will be essential not only to economic prosperity but also security, because poverty and violence go hand-in-hand. So much remains to be seen if this growth can continue, and what ultimate effect it may have. GEO

    Building a Middle

    Africa looks to increase its bourgeois factor

    The function of a city, it has been said, is to create a middle class. Cities in sub-Saharan Africa are trying to do just that, reports The Wall Street Journal on July 17, by using U.S. style mortgages in a process that would make Hernando de Soto proud. The mortgages will enable the middle class to do something they've rarely been able to before--build and own a home.

    In Lusaka, Zambia, for instance, a developer is building a 3,700-house community to test the market. Some investment groups are creating dedicated funds to solely invest in Africa, where it is believed there is pent-up demand by a hidden middle class.

    The WSJ articles cites World Bank estimates that the number of of middle class will rise from 12.8 million (in 2000) to 43 million (in 2030). Most will be in South Africa, but many will be in Zambia, Nigeria, Kenya, and Ghana.

    Normal mortgage needs to be adjusted to the local environment. In Zambia, where AIDS has reduced average life span to 38, mortgages must be paid off before a person reaches 55. GEO


    Fastest Growing Cities and States

    Forbes.com released its annual ranking of the fastest growing suburbs. The main story is housing affordability. Cities that are booming are geographically close to economic centers, but far away in price.

    In the Los Angeles metro, San Bernadino and Riverside counties boasts home prices 30% lower than L.A. County, but with comparable income levels. Other metro regions with large growth rates are Sacramento, Dallas, Phoenix, Las Vegas, and Atlanta. Overall Texas had 20 of the top 100 fastest growing cities, 12 of them suburbs of Dallas.

    Speaking of states, last week Forbes released its top states for business. Virginia came in at #1, but Washington state saw most improvement. Texas was the largest state to make into the top 10, ranking 4th. GEO

    Magnetic Memphis

    Logistical advantage draws business

    The FedEx Express Super Hub, located in Memphis, Tenn., has become a magnet for businesses, reports The Wall Street Journal on July 10, 2007 (full story). Because locating in Memphis means close proximity to this central air hub, companies can receive electronic orders from around the country late into the night, and still be able to provide next day service because instead of 9:00 p.m. shipping deadline, they have until 11:40 p.m. The paper cites the Memphis Regional Chamber, which says more than two dozen small businesses have either expanded to or relocated in Memphis over the past two years. In addition to FedEx, DHL, a unit of Deutshe Post AG of Germany, also has a hub in Memphis. Similar benefits draw businesses to Indianapolis (another main FedEx hub) and Louisville, Ky., where UPS has its air hub. Companies seeking such logistical benefits include legal and technical document reproduction companies, and even biotech companies. GEO

    Bright Flight

    Eastern Europe losing workers to West

    Companies attracted to cheap, skilled labor in places like Slovakia are finding workers harder to come by, reports the The Wall Street Journal (full story) on July 10, 2007. In Bratislava, known as Detroit East because of the large numbers of automotive-related factories, are having to bus in workers from as far as 60 miles away. Slovakia is one of several Eastern European countries to join the European Union in recent years. As skilled workers have emigrated to places like the UK and Ireland, Europe is rapidly losing its low-cost hinterland. Other countries facing similar issues include Poland and Hungary. Wages still remain as much as 34% less in these areas, but costs are increasing, causing companies to investigate investments in Ukraine, Bulgaria, and Morocco. GEO

    Biotech Britania

    Cambridge concentrates bio businesses

    In the July 10, 2007, The Wall Street Journal, a three-page special advertising section ran touting the scientific advantages of doing business in the U.K. The articles cited top universities, such as Oxford and Cambridge, as well as a strong biotech cluster in the Cambridge area. One article cited statistics from Library House, a Cambridge-based investment research and consulting company, that within a 50-mile region surrounding Cambridge University there are 180 biotech-related companies employing 3,600 poeple, generating $1.46 billion in revenue. The special advertising section also pushed London as good choice for filmakers, from Hollywood to Bollywood, and for renwable-energy firms. GEO

    Lock, Stock, and Barrel

    Energy costs force companies to pick up and move stakes

    For industries in which energy is a key input, such as metals and chemicals, rising costs are making life rough, reports The Wall Street Journal on July 6, 2007 (full story). In response, some companies are setting up shop in business-friendly, energy-rich countries like Trinidad. The tiny island nation scant miles off the coast of Venezuela has attracted Mittal Steel Co. and Nucor Corp. In Nucor's case, it chopped its refinery located in New Orleans into pieces and shipped it across the sea to be reassembled in Trinidad. Not surprisingly, wages are on the increase in the country as manufacturers move in and snap up the most skilled workers. Other locales attracting manufacturers include Iceland, with lower-cost hydro- and geothermal power, and even Saudi Arabia. GEO


    War in the Urban Milieu

    Random bullets hurting property values in Rio

    Cities are known for many hassles. Traffic. Pollution. Overcrowding. But in Rio De Janeiro, stray bullets are a growing hazard of city life.

    Fox News reports that the government is seeking to crack down on the drug traffickers who run the many poor slums in the 8 million person city. As a result, exchanges of high-powered weapons are commonplace. Collateral damage is occurring from unaimed, random bullets, which can be lethal from up to a mile away. In the first 3 months of 2007, at least 87 have been wounded by stray bullets.

    In Rio, poor neighborhoods, known as favelas (shown above), are in close proximity to wealthy neighborhoods. The worst areas are on the poor north side of the city, described in the Fox story as a "a drab urban sprawl that extends for miles behind the mountaintop Christ the Redeemer statue, which looks down over the city's richer neighborhoods and white sand beaches." And the news service notes that property values can be as much as 60 percent less for high-priced condos with windows facing the favelas.

    The news story reports that even flights into the city's downtown airport were diverted on one occasion due to a high-level of gunfire in a part of the city near the flight path. GEO


    Seattle's Makeover

    Large chunk of prime real esate opening up

    The Clise Family, owner of 13 prime acres in the middle of downtown Seattle, is looking to sell. This creates the potential for 13 million square feet of development. According to the Wall Street Journal that much space rivals the entire World Trade Center complex before 9/11 or London's Canary Wharf.

    Clise Properties, a multigenerational family business with just 30 employees, is putting the land up for sale because of recent lifting of heigh restrictions on buildings in the downtown - going from 300 feet to 500 feet. (Other cities such as San Francisco and Vancouver have recently done the same because they've found restricting building to slow growth encourages sprawl and traffic congestion.

    WSJ reports that the family patriarch, James Clise, began buying up acreage in 1889 when he arrived in Seattle the day after a massive fire destroyed 30 city blocks. His capital came from a successful timber business he'd started in Denver, Colorado. Over the next century, the family has piece by piece acquired properties in the area known as the Denny Triangle. The area is named after Denny Hill, a hill that was leveled by the city early last century to make room for growth. GEO



    Catalan region of Spain clings to identity against all odds

    Having lived in Barcelona for nearly a year, I can verifty that the article "Barcelona: Leading a stateless nation" by Rick Steves, posted on June 15, may be the single best and most concise description of Barcelona I've ever read. (I was even pick-pocketed on the Las Ramblas.)

    Money quote: "Catalonia is Spain's Quebec." GEO


    Name of the Rose

    San Diego's biotech cluster attracts hungry law firms, with mixed-results

    Good article by Kellie Schmitt of The Recorder, posted to Law.com on June 11. "All's Not Sunny for San Diego Firms" provides an interesting look into a changing business ecosystem, from the standpoint of big corporate law firms.

    Lawyers along with investment banks, advertising agencies, accountants, management consultants, and real estate brokers, form the core of the advanced services sector that provides the know-how to power modern enterprises.

    In San Diego, law firms saw the rising of a biotech mecca. Parallels to Silicon Valley abound. Start-up activity is even concentrated in a place called Sorrento Valley. However, just as every business plan looks good on paper, law firms are finding stiff competition that makes San Diego not the Shangri-La they anticipated.

    The region once had just two big law firms, but those firms have been absorbed by larger players. Big law firms from Los Angeles, to the north, moved in the 1980s and maintain large offices there now. Northern Californian firms, bringing the cache of Silicon Valley with them, also moved in. Plus other big players from across the country have sought to establish a foothold.

    [Money quote by Frederick Muto, the partner in charge of the San Diego office of Cooley Godward Kronish, noting that competitors "see our success and say, 'There's the next Silicon Valley,' but there's only one Silicon Valley."]

    One key problem includes a small pool of qualified talent. Apparently lawyers are jumping ship-to-ship-to-ship-ship, transferring from one firm to the next in a series of lateral hires, as the practice is known in the legal industry. Additionally, there are few large companies, and many small ventures--startups that can't afford the $500- to $600-an-hour billing rates of big law firms. And more big law firms are on the way, leading observers to predict a shake-out is eminent. GEO


    21st Century City on Forbes.com

    New special report looks at metros of tomorrow

    On June 11, Forbes.com ran its special report called Twenty-First Century Cities. The micro-site on Forbes.com contains five articles on an array of topics:

    "Two Billion Slum Dwellers : Cities are the future of the world, and slums are the future of the city."
    "Snitchtown : In the brave new world of ubiquitous security cameras, universal surveillance is seen as the solution to all urban ills."
    "In Defense Of Sprawl : Think the inexorable spread of cities is a bad thing? Think again. "
    "Megacities Of The Future The demographic future belongs to cities like Mumbai, Shanghai and Dhaka. "
    "Ghost Cities of 2100 Even as the world's urban population explodes, these eight cities face potential extinction. "

    There's some good stuff here, such as the opener for the Megacities piece, "Paging Thomas Malthus: Your nightmare finally has arrived." The cheeky editorial by Cory Doctorow on the prevalence of surveillance cameras. GEO


    Eponymously Yours

    Naming tomorrow's mega regions

    The name of a place provide its identity. As towns, cities, and metros shift and change, the names used to title them have to change with them. The current Minnesota state capital of Saint Paul was once Pig's Eye, taking its name from a tavern owner well-known in those parts to trappers, fur traders, and soldiers.

    Many thinkers, writers and prognosticators looking at the future of urban America have sought new names to describe their research or forecasts. Below is a partial list:

    Bajalta California [actual]
    The combined international urban corridor stretching from Mexico's Baja (lower) California to the United States' Alta (upper) California. The term was coined by a pair of USC professors. The linchpin to the region is the San Diego-Tijuana Metroplex.

    BAMA (Boston-Atlanta Metropolitan Axis) [speculative]
    The term given to the Atlantic coast supercity, aka The Sprawl, that is the setting for parts of William Gibson's Neuromancer. Does not exist yet, but has potential as DC stretches south and the booming Atlanta metro stretches north. The architect turned sci-fi writer foresaw many of today's information technology innovations and is credited with coining the term "cyberspace."

    Bosnywash [actual]
    This chimerical name was coined by Jene Gottman to describe the contiguous archipelago of cities stretching from Boston to Washington, DC. Similar names include: The BosWash and Boshington. The corridor contains a majority of the population of the United States.

    Cascadia megacity [speculative]
    A greater Pacific Northwestern urban region.

    ChiPitts [speculative]
    A massive midwestern urban region.

    San Angeles [speculative]
    A sonorous name developed by the writers of the action flick Demolition Man to describe the continuous city stretching from Santa Barbara to Los Angeles to San Diego. The primary stumbling block to this becoming a reality is Camp Pendleton, the 125,000-acre Marine base buffering northern San Diego County from both sourthern Orange County and southern Riverside County. If the base is decomission and the land sold, and some experts believe it could be in the next 10 years, San Angeles will quickly emerge.

    SanSan [speculative]
    Created by Jene Gottman to describe a notional conurbation stretching from San Francisco to San Diego. This entity seems unlikely to materialize owing to the coastal topography of California which is broken up in various pockets by mountain ranges.

    The Corridor [actual]
    Refers to the 1,150-kilometer strip of land, stretching from Quebec City to Windsor, containing more than 56% of Canada's population and three of its four largest cities. It's analogous to Bosnywash in terms of concetration of people and resources. GEO


    View from the Inside

    Influential bloggers calls for downturn in Silicon Valley

    Web 2.0, as the recent surge in Internet ventures has been termed, is re-igniting the innovation engines in Silicon Valley. But not everyone is happy with that.

    Utilizing a new, flexible but powerful compilation of software programs, termed AJAX, new companies began popping up a few years ago. Michael Arrington, created a blog in 2005 called TechCrunch.com, to cover the then burgeoning trend. With insider insights and interesting companies to write about, TechCrunch became a massive hit and can claim close to 500,000 visitors a day.

    On May 22, however, Arrington wrote that he missed the old days, circa 2004, where burgers, beer and backyard parties offered the setting for entrepreneurs to network. No longer is that the case. Easy capital has changed everything, he intones. Put another way, Web 2.0 has jumped the shark. [Money quote: "Times are good, money is flowing, and Silicon Valley sucks.” ]

    He suggests Silicon Valley needs a good downturn to set things right again. Strangely, another blog superstar Robert Scoble, followed up with his own similarly-themed post "Why I'm in a malaise ..." [Money quote: "I too look wistfully back at the days when we had almost the entire Social Software industry in one little coffee shop back in 2002 — none of whom were talking about making billions of dollars. "] It's a strange call to arms, to be sure, but the insights they provide offer an insider's look into a boom as ownership is transferred from the innovators to the exploiters. GEO

    Capitals of Clean

    Regions vie for clean tech crown

    Several months after The New York Times ran its piece , on May 24th, the Wall Street Journal offered its own take on Silicon Valley's drive to become the clean technology capital.

    Although not news anymore, WSJ writers Pui-Wing Tam and Jim Carlton authored a more balanced piece on the subject.

    NYT slanted its piece as if Silicon Valley's dominance is a foregone conclusion, but WSJ clearly spelled out the Valley has plenty of competition: particularly from Austin, Texas. Even citing a study by an independent research firm, SustainLane, in San Francisco ranking Silicon Valley, gasp, #2 behind Austin. (Click here for Google Map.)

    The story was also more detailed, honing in on San Jose (the 1M person capital of Silicon Valley) and its efforts to lure a start-up solar power company called Nanosolar, Inc. Salient points: San Jose city officials scouted sites for a 647,000 s.f. building to save Nanosolar on real estate broker fees, offered expedited permits, and provided a $1.5 million grant to be used to retrain local workers. All of that to attract a facility that will create 200 jobs, which will hopefully grow.

    Still, the article points out that San Jose is an expensive place to startup a business: average salaries are twice the national average ($66,200 v. $37,870) and other items, such as electricity costs, are high. However, there's plenty of money thanks to VC-extraordinaire John Doerr of KleinerPerkins, who's pushing clean tech. (Check out the excellent new Portfolio magazine for a profile of Doerr's efforts. Money quote: “When you get into energy, you’re going up against Exxon and Chevron and cattlemen and corn.”) And local techies like Google co-founders Sergey Brin and Larry Page are putting their own money into outfits, such as Nanosolar (which has raised $100M to date).

    So far, reports the article, San Jose has 22 firms involved in researching and producing clean tech, an 83% jump from last year. One of which, SunPower Corp., has 300 employees and plans to double that workforce by the end of 2007. Austin, however, claims 50 such companies.

    Other top spots for clean tech, according to SustainLane, include: Berkely, CA; Pasadena, CA; Boston, MA; and runners-up San Francisco, New York, Seattle, San Diego, and Houston. GEO


    A Place of Solace?

    Kurdistan's most valuable natural resource is peace

    The WSJ wrote on May 16 how the Kurdish-governed section of Iraq, the northern part, hopes to emulate the success of Dubai, and Adu Dhabi. Although observers familiar with the region readily point out, "It's no Dubai,"the semi-autonomous Kurdish government is pursuing an aggressive strategy to develop housing for the impending wave of foreign workers attracted by the region's oil reserves.

    Developers are offering homes in housing complexes with names like English Village. Already English Village has sold out its stock of 410 houses, costing from $130k to $160k, and move in is still a year away. Another more tony development called "Dream City" in Erbil, and has 1,200 units, costing as much as three-quarters of a million dollars.

    To lure companies, Kurdistan is offering a 10-year tax holiday, 100% land ownership, and international arbitration for settling contract disputes. But it's greatest asset is the relative peace of several of the region's large cities. Although volatile places like Mosul are just 50 miles away, cities like Erbil have seen dramatically less violence. But that's not to say none.

    All these dynamics are adding up to drive up home prices, and home rental prices, 100% to 200% over the last few years. The problem is wages for local Kurds is not increasing at the same rate and they're being priced out of the market. (Sort of sounds like what happened in Silicon Valley during the tech boom when local schools couldn't pay teachers enough to live in the areas where they taught.) GEO


    Tomorrow's Stars

    Latest Census data show surging growth outside core megapolitans

    The Census Bureau just released its numbers for the 100 largest metropolitan areas in the U.S. Accounting for two-thirds of the U.S. population, those 100 MSAs show some interesting trends.
    First, big doesn't necessarily mean slow-growing. Of the 15 largest metros (see below), six have double digit population growth since 2000: Dallas-Fort Worth (16.3%) ; Houston (17.5%); DC metro (10.3%); Atlanta (21.0%); Phoenix (24.2%); and Riverside (23.7). Cumulatively, those six fast growers added 4.6 million new residents. The other 9 big metros added just 2.4 million new residents.

    Big 15 Metros >> 2006 Population
    1 New York-Northern New Jersey-Long Island, NY-NJ-PA >> 18,818,5362
    2 Los Angeles-Long Beach-Santa Ana, CA >> 12,950,1293
    3 Chicago-Naperville-Joliet, IL-IN-WI >> 9,505,7484
    4 Dallas-Fort Worth-Arlington, TX >> 6,003,9675
    5 Philadelphia-Camden-Wilmington, PA-NJ-DE-MD >> 5,826,7426
    6 Houston-Sugar Land-Baytown, TX >> 5,539,9497
    7 Miami-Fort Lauderdale-Miami Beach, FL >> 5,463,8578
    8 Washington-Arlington-Alexandria, DC-VA-MD-WV >> 5,290,4009
    9 Atlanta-Sandy Springs-Marietta, GA >> 5,138,22310
    10 Detroit-Warren-Livonia, MI >> 4,468,96611
    11 Boston-Cambridge-Quincy, MA-NH >> 4,455,21712
    12 San Francisco-Oakland-Fremont, CA >> 4,180,02713
    13 Phoenix-Mesa-Scottsdale, AZ >> 4,039,18214
    14 Riverside-San Bernardino-Ontario, CA >> 4,026,13515
    15 Seattle-Tacoma-Bellevue, WA >> 3,263,497
    Source: U.S. Census Bureau

    Looking at these numbers through the lens of megapolitan areas, it's striking to note the strong showing of Texas in the top megas. Looking at the numbers and the growth rate for Texas, the big three megas of NYC-Philly, Los Angeles-San Diego, and Chicago-Milwaukee have pretty good competition.
    On a map, Dallas and Houston and San Antonio may look far apart, but the reality is they are strongly tied together. In addition to large, fast moving interstates (running between metros), another significant linkage is air travel. Like the heavily used Amtrack on the East Coast, Southwest Airlines, the maverick short haul, no-frills air carrier based in Dallas, has grown over the decades by providing continuous flights between the Lone Star state's major metros. It has provided a level of air passenger service that is only now catching on across the country.
    Aided by such linkages and a ballooning population, Dallas-Fort Worth could be bigger than Chicago in a generation. And Houston wouldn't be far behind. And with San Antonio and Austin growing both growing at double digit clips, Texas could become a dominating Third Coast. In fact, by 2030, the Texas Triangle is projected to have 24 million residents. By comparison, estimates for sprawling and densely populated Southern California (anchored by Los Angeles-San Diego) are not much higher at 27.8 million people. GEO

    Brainy Burgs

    New research on why some cities thrive in the knowledge economy

    The Work Foundation out of the U.K., today announced the start of phase II of its research into so-called knowledge cities, aka Ideopolises. The phase I findings are availalbe in a 108-page report.

    That initial report states that Ideopolises are characterised by:

    • High levels of economic success
    • High levels of knowledge intensity based on The Work Foundation’sdefinition of knowledge intensity
    • A diverse industry base including distinctive specialist niches
    • One or more universities that have a mutually beneficial relationship withthe city, leading to industries built on research strengths, transfer ofknowledge to businesses and the retention of graduates
    • Strong communications infrastructure and good transport links withinthe city and to other cities, including by air, rail and road
    • A distinctive long-term ‘knowledge city’ offer to investors and individuals alike, created by public and private sector leaders
    • Strategies to ensure that all communities benefit from the economicsuccess associated with knowledge.

    According to Alexandra Jones, associate director at The Work Foundation, this new round of research will "examine in detail how cities can play to their strengths against this background - how they can build a sense of place and a distinctive offer for their citizens, how they can collaborate with other cities, and how they can foster multi-agency working to achieve their goals." GEO


    Oil Boom Towns

    Black gold buys metropolitan status

    The Wall Street Journal reported on April 11, 2007, that a plan was unveiled for a 68-story skyscraper in Dubai where each floor rotates every 90 minutes. The architect, David Fisher, calls it "dynamic architecture." The newspaper reported that Fisher's eureka moment came as he listened to a friend in Florida talk about the large difference in pricing for condos that face the ocean and those that do not.
    Fisher's design team includes Leslie Robertson, the innovator behind the World Trade Center design. Interestingly, the designers don't seem to anticipate large construction costs, and argue their design is rather straightforward, it just looks different. All except the all important issue of plumbing. WSJ quotes Robertson as saying, "We have good people working on that." Indicating, in as many words, that it's a technical challenge.

    Dubai Marina at night.

    The fact that the designers are targetting Dubai, one of the 7 emirates of the UAE, is a reflection of the building boom going on in the tiny Middle Eastern nation. Understanding that oil wealth will not last forever, the country's ruler Sheikh Mohammed bin Rashid Al Maktoum is looking to shape Dubai into a world financial center, and tourist haven.
    The country is set to debut the region's first commodities futures exchange, in a joint venture with NYMEX. The commodity the so-called Dubai Merc will focus on first is, of course, oil. Specifically, the Dubai Merc hopes to become a trading center for Arabian Gulf sour crude, the flavor of oil that makes up much of the world's energy markets. Already Dubai crude is a benchmark for Middle Eastern oil flowing to the Asia-Pacific region. In contrast, NYMEX in the U.S. has a huge market based on setting prices for benchmarks Brent crude (from the North Atlantic Sea) and West Texas Intermediate (from West Texas).
    To house its burgeoning non-petroleum industry, the country is undergoing a building boom. [Emporis lists 1,087 buildings in Dubai.] It is in the process of building what will be world's largest building, the Burj Dubai (2,300 feet tall; ETA: 2009), and is planning another building known as "The Burj," meaning "the tower" which would be 3,281-feet tall, or 1 kilometer!
    Just 90 miles away from Dubai another boom town is forming in Abu Dhabi, a fellow UAE member.
    With a similar story to Dubai, Abu Dhabi also hopes to become a regional hotspot. A Fortune Magazine article recently named Abu Dhabi the "richest city in the world." [Author: Barney Gimbel] The reason: Abu Dhabi's 420,000 citizens, excluding foreign workers, have an average net worth of $17 million each. [Emporis lists 215 buildings in Abu Dhabi.]
    Just 15 minutes away from one another by plane, Fortune article points out a friendly rivalry between Dubai and Abu Dhabi. So far, however, Dubai has won the public relations campaign, drawing the bulk of recognition. And in March 2007, Halliburton, famous/infamous for its Vice President Dick Cheney affiliation, announced it would move its corporate headquarters to Dubai--although its 12,000 workers at its current HQ in Houston, Texas, would stay put. GEO

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