Washington represents a state that has experienced dramatic growth in high-tech manufacturing and computer-related activities. Hundreds of these companies have clustered in and around Seattle and the technology corridor of Redmond, Bellevue, and Kirkland. Yet, Spokane exemplifies many of the qualities computer manufacturers seek most.

"Spokane offers that type of environment where people can enjoy our mountains and lakes as well as Spokane's cultural events," says Ken Olson, interim president of the Spokane Area Economic Area Development Corp.

Washington offers low business costs, triggered by the state having no personal or corporate income tax. It levies no business and occupation (B&O) tax on items shipped out of state for firms which wholesale goods and has no sales and use taxes on machinery and equipment used in manufacturing operations. It also grants a sales and use deferral/exemption for high-technology companies undertaking research and development (R&D) activities, and allows them a B&O tax credit of up to $2 million.

"And our land, building and utility costs are lower than California's," says Olson. "People are pleasantly surprised at that our utility costs are the lowest in the nation."

But it was Spokane's quality of life that attracted Daines to the area.

"I have a five minute commute to my office," says Danes, after living in the San Francisco Bay area for 25 years and putting up with traffic congestion.

Even Seattle was too crowded for Daines, who claims peace and tranquillity were his top priorities in site selection. He believes Spokane's lifestyle will attract engineers who have grown tired of traditional technology centers, such as Boston and Silicon Valley. Transportation connections also make the city accessible.

"Spokane became very attractive when Southwest Airlines came here," Daines recalls. This allowed him to commute for two years weekly while he relocated.

Today Packet Engines, a manufacturer of high performance Gigabit Ethernet networking solutions, employs 120 people, a far cry from the seven it had in California. And the company continues to grow. Daines expects employment to jump to more than 300 within two years.

Lately, the company has been recruiting new hires from Northern California, Arizona, Texas and Massachusetts.

"We have tapped out the local market," Daines says.

The company keeps tabs with local universities where classes are taught in computers and robotics and the Spokane Intercollegiate Research and Technology Institute (SIRTI). SIRTI helps bring new products and businesses to market. High-tech companies can work directly with SIRTI to tap funding, equipment and facilities.

"But our corporate partners also can benefit from advances in technology and product development generated by SIRTI projects," says Dr. Tony Lentz, SIRTI associate director. "We can help them commercialize new technologies and put innovation to work."

Clusters
Clustering is definitely a phenomenon computer-related companies have in common.

Virginia, which is fast becoming known as Silicon Dominion, demonstrates the impact large corporate announcements have on attracting clusters of companies. In two years, the $1.5 billion White Oak Semiconductor manufacturing plant, $3 billion Motorola semiconductor plant, and $1.2 billion Dominion Semiconductor (Toshiba and IBM) computer chip plant have already resulted in at least 42 semiconductor-related vendors locating to the region.

"The clustering effect is definitely happening for us here," says Jody Bolstad, a spokesman for White Oaks Semiconductor.

But attracting talent is continually an issue with computer manufacturers since maintaining a leading edge is paramount. With such huge semiconductor manufacturing facilities under construction in Virginia, industry observers anticipate approximately 3,000 technicians and operators will be needed over the next five years to fill positions. To help develop a skilled high-tech work force, alliances are being formed within industry groups to encourage students and career-changers to enroll in community college semiconductor manufacturing associate's degree programs.

Helping the effort is the Center for Innovative Technology (CIT), a private, non-profit corporation created by the state to enhance competitiveness by providing business with access to Virginia's technological resources and assistance. CIT operates 13 technological development centers at Virginia universities.

The Big One
California continues to be a haven for companies in the computer industry. The personal computer boom has been a key factor in fueling California's economy. Rising demand for computer peripherals, components and personal computers has driven California companies to expand or relocate, particularly in or to San Jose.

Exclusive Design Co. Inc., a $75 million company, opened its Rigid Disk Drive Product Division site in San Jose in September. Its 103,000 square foot building was the result of a consolidation. Western Digital opened a 129,000 square foot facility in South San Jose, the result of expanding its engineering development and R&D facility. Western Digital is a leading hard disk drive manufacturer.

"Our new location is easily accessible to most any area of Silicon Valley," says Kathy Braun, executive vice president of Western Digital's Personal Storage Group. "The growth of Western Digital in San Jose goes hand-in-hand with the growth of our company around the world."

A real indication of how companies are on the move in San Jose, last year the city topped the $1 billion mark for building permits. Much of San Jose's activity is downtown and in Edenvale on the tip of Silicon Valley.

While Silicon Valley receives much of California's high-tech press, Southern California, in fact, is state's hottest territory for state-of-the-art technological activity. For starters, over 19,000 technology-driven companies call the Tech Coast of Southern California home -- 20 percent more than Silicon Valley. The top 10 percent of these have gross combined revenues of over $51 billion. Technology firms in the six country region that comprises Southern California employ over 500,000 people, over 50 percent more than the Silicon Valley.

"It's our critical mass of intellectuals that is drawing high tech companies here," says Lee Harrington, president and CEO of the Los Angeles County Economic Development Corporation. Southern California alone offers 180 institutions of higher learning. Among them are four campuses of the University of California and UCLA.

Today, the Tech Coast has over 1,200 electronic firms employing over 58,000 people. The electronic components segment of this industry alone consists of over 390 firms employing over 16,000 people in Southern California. For computers, Orange County is the center of the greatest concentration of these companies in California. Its City of Irvine is ranked No. 3 in the nation for computer hardware and services jobs, behind No. 1 ranked San Diego and No. 2 San Jose.

Disc maker Western Digital announced in March that it is moving its 700 employees to a five-building, 450,000 square foot campus in Irvine. The computer systems division of Japan's AIWA America Inc. has also relocated its headquarters from New Jersey to Irvine as part of a larger expansion bid in the computer storage products market.

"We picked Irvine because it is Silicon South," says Dennis Bradshaw, senior vice president, computer systems division. "Our ability to get qualified, technical people was the basis of our move into the area.

But not all companies are attracted to California's coast. Packard Bell, which had been investigating sites in Southern California, decided to locate its manufacturing and assembly facilities inland in Chatsworth, near Sacramento. Its reason: earthquakes. The move will employ approximately 1,400 people. The company had also considered sites in Oregon, Utah and Boston, MA.

Distribution Locale
Earthquakes were reason enough for Avnet, Inc. to choose Phoenix for its distribution locale. Headquartered in Great Neck, N.Y., Avnet has quietly been relocating several key operations to Phoenix since 1987 after some of its California facilities became rattled by a major earthquake. "For us, it was the straw that broke the camel's back," says Roy Valee, vice chairman, and chief operating officer. The cost of obtaining insurance to protect the hundreds of millions of dollars worth of sensitive computer parts in its California warehouse was too great.

Today the company employs over 1,800 employees in Tempe, Chandler and Phoenix, and has become one of the largest corporations in the state. This year the company expects to move its Electronic Marketing Division headquarters to Chandler where it will occupy more than 800,000 square feet.

The company considered several locations throughout the Southwest, but quickly settled on Arizona because of its good weather, transportation links, lower operation costs and proximity to suppliers and customers.