DATE: Sunday, November 23, 1997             TAG: 9711220632

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY MEREDITH COHN, STAFF WRITER 

DATELINE: SEATTLE                           LENGTH:  193 lines

HAMPTON ROADS LOOKS TO SEATTLE INTER-REGIONAL VISIT TO THE LAND OF MICROSOFT AND BOEING SPARKS HOPE FOR THE FUTURE OF HIGH-TECH DEVELOPMENT

Aboard a packed 737 at 33,000 feet, regionalism isn't all it's cracked up to be.

Hampton Roads mayors and county board members, bank and real estate honchos, college administrators and entrepreneurs - all struggled with carry-ons, tripped over each other's feet and made small talk during six hours in the air last Sunday on the way to the land of Microsoft and Boeing.

Long about Montana, some of the 60-member delegation may have been wondering whether this first inter-regional visit would prove useful in creating high-paying technology jobs for the region.

But by Tuesday morning, the group was able to speak as one. During a 20-minute exercise, ideas spilled onto flip charts. At the top of the lists were better workforce training starting in grade school and continuing through college and beyond, improved transportation and more support for high-tech entrepreneurs. They also called for real cooperation among the cities.

Given recent squabbles over water, sports stadiums, light rail and retail development, the consensus surprised even the participants.

``Are we a real region or a virtual region? Do we act as a region?'' Terry Riley, director of the Hampton Roads Technology Council, challenged the group. ``We are already a high-tech region. We're not just a tourist destination, not just a quality of life region.

``We are that far away,'' he said, holding his fingers an inch apart, ``from being Seattle.''

``We say, `No virtual regionalism,' '' said Delceno Miles of The Miles Agency, an advertising company in Virginia Beach, describing the key lesson she and others learned on the trip sponsored by the Hampton Roads Chamber of Commerce.

Cities like Richmond and Raleigh have been making similar treks to the nation's most economically successful and physically appealing cities for more than a decade. In drizzly Seattle, the Hampton Roads visitors were invited to learn what they could during a three-day whirlwind tour.

In lectures and informal discussions, from atop the 600-foot Space Needle to the University of Washington campus, the Hampton Roads leaders collected details on how high-tech ideas from local entreprenuers were spun into multi-million-dollar companies and how special taxes are being used to improve roads and schools.

Members of the Hampton Roads group said problems at home were never far from their minds: below average wages, increasing highway congestion, under-funded public schools and autonomous cities with no legal obligation to work together.

But by the trip's end, they had picked the most important targets for improvements and groups that should take the lead. They also said they realized that they wouldn't be starting from scratch.

Already fueling the region's economic engine are the federal researchers at the Jefferson Lab and NASA-Langley, Old Dominion University and the Hampton Roads Technology Council. The Hampton Roads Partnership, a regional cooperative formed with public and private money, has been working to improve infrastructure that attracts business, such as transportation, access to technology and workforce training.

Even Seattle-area leaders are not in sync on all topics - the 36 cities in King County, Washington, are currently debating who should pay for 911 service, for example. Still, they work together on transportation, education and support for high-tech entrepreneurs.

To be sure, Seattle has had more than its share of what its officials call ``dumb luck.'' The founders of employment giants Microsoft, Boeing and Weyerhauser located in Washington's Puget Sound region because they happened to be natives.

But the region didn't leave everything to chance.

On the topic of transportation, Seattle area leaders say the roads are still clogged, but they are making headway by improving highways and encouraging public transportation.

``We looked at regions competing with us and their investments,'' said Ron Sims, King County executive, citing Portland, Ore. ``It would be difficult to compete with the jurisdiction to our south if we had no transportation system.''

Two years ago, the county issued $3.9 million in bonds to pay for road improvements, some of them in Seattle, which traditionally had to dig into its own coffers for highway funding. The region also has invested in light rail, commuter rail and bus systems, and commuter parking lots to serve them. Hampton Roads is investigating similar options.

Following requests from businesses, a new tax structure calls for reducing income tax on industry and a car tax. Toll roads, which would snarl traffic even more, are not on the drawing board. Localities have enacted utility taxes and head taxes - levied on businesses based on the number of employees - to help pay for city services.

To develop education, Seattle has worked with its business community to produce a workforce educated in high-tech-related areas such as computers, biotechnology and engineering. City voters recently extended a $69 million Family and Education levy.

Paul Song, president and CEO of ARIS Corp., a seven-year old, $54 million software company, said the high-tech industry's workforce has a 33 percent turnover rate each year because the small pool of qualified employees has its pick of jobs.

``My growth depends on my ability to find qualified workers,'' he said.

Statewide, about 30,000 software jobs remain vacant, according to Kathleen Wilcox, president of the Washington Software and Digital Media Alliance.

In response to the need, the local community colleges - which train, retrain and help develop worker skills - have teamed with businesses to develop industry standards in education. In some cases, businesses have offered training directly to teachers.

In Hampton Roads, ODU, Christopher Newport University and local community colleges have similar programs, and the Hampton Roads Partnership is considering a survey of public school assets.

Jobs around Seattle are growing at more than 3 percent a year, a 50 percent increase over 1995. The average salary at high-tech companies is $42,000, and the 10,000 Microsoft employees make an average of $46,000, from six-figure programmers to $6-an-hour technicians.

In 1996, the average wage for all jobs in the Seattle region was $28,871, compared to $26,600 in Hampton Roads.

Meanwhile, at the University of Washington's Office of Technology Transfer, new high-tech products are born. Since 1975, 60 companies have formed based on research done at the school in areas like biotechnology and computer software.

The results of work done at the university remain in Washington, helping the local economy. Students gain real-world experience during the process, said Bob Miller, director of technology transfer for the school. The university reports that the economic activity it produces is at least 10 times the state legislature's investment there.

But it is money that provides the real fuel for the entrepreneurial engine. Speakers from Seattle's business community said banks have been too conservative in lending to upstart businesses. But venture capitalists and private investors have stepped in where banks fear to tread.

Businesses in Seattle are constantly competing for available money and research aid, said Susannah Malarkey, executive director of the Technology Alliance, a statewide organization of high-tech companies.

The Technology Alliance, a statewide organization of high-tech companies, helped form an ``alliance of angels,'' business people, often retired, who have time and money to invest in fresh high-tech ideas. They work with entrepreneurs on commercial products, a process that often takes 15 years or more in research and development. Support for new ideas and their business is also given by the many successful business people who now live in the city, Malarkey said.

Microsoft, Malarkey said, has about 1,500 millionaires on staff who have been known to start new businesses, invest in others' projects and give generously to the local arts, charities and schools.

Wilcox of the software alliance pointed out that in addition to money, high-tech entrepreneurs need a strong community of accountants and lawyers. New businesses, she said, look for ``clusters,'' groupings of similar companies and support services. Some of the Hampton Roads cities' economic development representatives said they plan to assess what clusters exists and how to cultivate them.

After more than a dozen speakers, many of Hampton Roads' business and city leaders concluded that their region has many of the elements needed to lure and incubate high-tech companies.

``The trip gave us an exciting appreciation for the good things we have in Hampton Roads,'' said Deborah Stearns, executive vice president of Goodman Segar Hogan Hoffler commercial real estate.

But there is work to do, they concluded. Groups including the Hampton Roads Chamber of Commerce, which sponsored the Seattle trip, and the Hampton Roads Partnership are likely to be involved.

The partnership's president, Barry DuVal, who couldn't attend the Seattle trip because of an illness, was named by many in the Hampton Roads delegation as the person who should take the regional lead.

``Clearly we have assets, God-given and man-made, to transform the area into a high-tech leader,'' DuVal said during an interview after the trip.

He wants to step up his improvement efforts in transportation, workforce training and technology development to capitalize on the enthusiasm generated on the Seattle trip. He said he expects support from the public and private sectors.

Virginia Beach Mayor Meyera Oberndorf said he'll get it.

``I can't help thinking that we may be nurturing a Bill Gates even as we speak,'' she said. ``He may be in one of our high schools or colleges. Or she may be. That's pretty exciting.''

The efforts will cost money - which Oberndorf said she will look for in the state legislature, in local coffers and, with residents' support, in selling bonds.

It will all take time, she said.

``It didn't happen for Raleigh, N.C., or Seattle, Wash., overnight,'' Oberndorf said. ``It took 10 or 15 years.''

The flight home - just as long and crowded as the one out west - seemed a little shorter, as the Hampton Roads leaders joked with one another about missing umbrellas and hashed over their Seattle experience.

The challenge, according to Portsmouth's economic development director, Matthew James, is ``to keep the lines of communication open and keep up our momentum now that we're back home.'' ILLUSTRATION: Photo

...Matthew James...

Map

SEATTLE

VP

Graphics

REGIONAL TO-DO LIST

SEATTLE VS. HAMPTON ROADS

[For complete graphics, please see microfilm]

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