San Francisco may have given birth to the interactive media industry, but these days Multimedia Gulch has hot competition for both new companies and new talent.
On the heels of Los Angeles' Mayor Richard Riordan's "Digital Coast" announcement, San Francisco Mayor Willie Brown convened his own multimedia summit today to address San Francisco's industry supremacy.
Part call to action, part collective gripe session, the Gulch summit brought San Francisco multimedia companies together with local government to figure out how the city can keep ahead of the digital Joneses.
"The message is clear. Right now companies want to be in San Francisco, but to keep its attractiveness, the city must address some core concerns," said Fred Quattlebaum, who - with Coopers & Lybrand - authored a study of the local interactive media industry for the event. "This is not the auto industry - this is not an industry that requires a big capital investment. These companies could be anywhere."
Today's Gulch summit was put together by the San Francisco Partnership, a public-private partnership funded by local companies that works to "attract and retain jobs" in San Francisco. As Mayor Brown pointed out, interactive media is a core part of the city's industry, and keeping those companies here is crucial to its health.
According to studies commissioned for today's conference, the number of multimedia jobs in San Francisco has expanded by 70 percent in the last two years. Sixty-four percent of interactive media companies in San Francisco are less than 3 years old. Of the multimedia companies, 44 percent have fewer than 10 employees, 75 percent are privately held, and the majority have revenues of less than US$2 million per year. San Francisco has 181 interactive-media firms, compared to 226 in Los Angeles, 103 in New York, 50 in Boston, and 41 in Seattle.
The question posed today was what, exactly, will draw more companies. As elucidated by Quattlebaum's survey, San Francisco's current new-media industry abhors the lack of affordable office space, limited access to bandwidth, high business-operation costs, and of course, horrendous parking and public transport problems. His study was closely echoed by an impromptu voting session, which used on-the-fly remote voting to tabulate the attendee sentiment. The result: The environment is great, but the costs are just too high.
But what made the group today feel panicky is the fact that one third of all multimedia companies housed in San Francisco are thinking about moving elsewhere. Not only does San Francisco compete with Silicon Valley for industry, but Los Angeles is trying to lure talent with its new Digital Coast campaign, and even less glamorous locales like Minnesota and Rochester, New York are launching targeted marketing crusades. And, as Mary Devereaux, director of the Institute of the Future, pointed out, the emerging globalization of labor means that companies could soon be moving to China, Scotland, or India.
Mayor Brown dismissed the competition's marketing efforts, saying, "It's more important that we do substantive things, which is what our task force is doing. If I can't figure out how to respond to parking problems, it doesn't matter how much I market San Francisco."
Those considerable solutions, however, ranged across the board. Speaker John Doerr, venture capitalist for Kleiner Perkins, thought that broadband infrastructure, better schools, and government-industry coalitions were the answer. A panel of executives from CNET, 3COM, and Macromedia instructed companies to entice talent here via perks: in-house cafeterias; access to upper management; and, of course, stock options.
But what the Gulch organizers offered was less ambitious. The San Francisco Partnership announced a seminar series for new start-ups, new training, and job programs, and a tax fund that will provide grants to entrepreneurs. Also upcoming is a tentative Gulch "multimedia campus" that would serve as a business incubator and learning center.
On behalf of the city, Supervisor Leslie Katz promised quicker business permits, task forces to look into the parking/transit problems, new government-industry liaisons, and a pledge to start up a new "tech corridor" in the impoverished Hunters Point area.
What was crucial, all said, is quick action.
Although San Francisco is well regarded as the place where companies get their start, everyone agreed that it needs to become known as a hospitable location for growth and making money.
