There was a line of people spilling out into the street, way beyond the red carpet. One of those little rope fences used to direct the lines in front of ritzy nightclubs was stretched down the sidewalk along the brightly illuminated fa & ccedil;ade. And there was not a single parking spot to be found within a five-block area. Once people squeezed inside, the comment heard most often was, "Whoa, I can't believe this is Spokane."
No, this was not the opening of a film festival at The Met, it was an after-hours gathering of young entrepreneurs and emerging high-tech companies who do business in the Inland Northwest. While many came expecting something like a glorified Chamber of Commerce breakfast, guests were generally blown away. And so were the people behind the Launch Pad V1.0 event held last Thursday at the Holley Mason Building.
"I guess we had about 700 visitors," says Rob Brewster, one of the driving forces behind the event and the owner of the building. "We decided to do something fun in Spokane, something to show what type of businesses our community can look forward to, what kind of energy that's out there among the entrepreneurs."
In the crowded lower level of Brewster's recently remodeled Holley Mason Building on South Howard, companies such as Avista Communications, roguewave, GenPrime and eNetwork Capital.Com demonstrated their latest inventions, while they networked the night away with politicians, educators and investors.
The can-do atmosphere of the event was immediately picked up by one of the evening's first speakers, Spokane Mayor John Powers, who encouraged everyone under 45 to raise their hands, then said: "The future of this city is not in the hands of the 45-year-olds. The future of this city is in the next generation's hands, and if I can ask that generation to do one thing, it's to not repeat your parents' sins. Think about the common good and about working together; the best days are ahead of us here in Spokane."
That evening, it certainly seemed like Spokane was finally getting over its perpetual case of Microsoft envy. Yes, it would be nice if global giants like Microsoft would relocate to our side of the mountains, bringing with them thousands of high-paying computer development jobs. And while the energy situation in California could spur more migration to our region, there are already many high-tech companies doing quite well here in the Inland Northwest. So, economic development experts believe, the region should first work to make its existing businesses succeed. Once that is taken care of, then economic development officials should try to lure companies in from outside the area.
"I believe we're starting to see the economy turn around," says Brewster, who's got several downtown redevelopment projects going. "The economy has been on a downturn the last couple of years, and there is still some uncertainty, what with Telect laying off people and things like that. But I believe we will see more businesses coming over here from the West Coast. We've had a lot of smaller businesses coming up, too."
Brewster's stake in the high-tech industry is his plan to turn the Holley Mason building into a high-tech center, as soon as the building is done housing Lewis and Clark High School this coming July. Holley Mason was one of the biggest eyesores in downtown -- boarded up and full of pigeons -- until Brewster purchased it in 1998. Today it's a beautifully redesigned office building, hot-wired and ready to go.
"We really want to see Holley Mason develop into a center for technology, a building where young entrepreneurs can feel right at home," says Brewster. "Or possibly people interested in working with the high-tech high school that's going to remain in the building, providing internships for the students."
One of the keys to developing a local economy that counts high-tech among its pillars is having a highly educated workforce, ready to fill the jobs as they open. And even though the high-tech industry has been taking a beating in the markets in recent months, the nation's high-tech-fueled expansion is expected to continue. There are more high-tech jobs listed here all the time; check out the Spokane Area Chamber of Commerce's Web site www.spokanehasjobs.com. The high-tech industry is hiring engineers, software developers and Web designers at a steady pace.
"The technology section on that site is booming," says the Chamber's Libby Barnes.
But regardless of job availability, many high-tech firms find themselves advertising in the Inland Northwest without results -- then they end up taking their search for qualified candidates to Seattle, Portland and California.
This is where the Inland Northwest Technology Education Center (INTEC) comes in. This new nonprofit collaboration between area colleges and high-tech businesses such as World Wide Packets, ITRONIX and GenPrime aims to connect the needs of local companies with the colleges in the area.
"I think we have a very well-educated workforce here," says Kim Pearman-Gillman, executive director of INTEC, where she's on loan from Avista. "They are good at the fundamentals, but we need to put them on steroids and get them up to speed on the latest technology.
"We have done surveys looking at what the companies need," she continues. "And I think the real eye-opener was that even companies that are not considered traditional information technology (IT) companies, 10 percent of their workers are actually IT workers." INTEC also found that 76 percent of the companies they polled can't find the employees they need, a problem that's only going to be aggravated by the fact that those same companies expect to grow by 132 percent within a year, and 270 percent within three to five years.
"They'll tell you that they get people with good fundamental skills, but then they need to spend the next six months teaching them how to use the software the way they use it," says Pearman-Gillman. "We believe the missing piece is targeted courses to teach the specific skills the employers need."
These courses can be after-hours at local colleges, or they can be held by companies who join forces and sponsor workshops in their particular area of expertise. Pearman-Gillman also suggests the Inland Northwest may want to reevaluate its strengths and weaknesses.
"We have a very strong medical community here, and in the near future we are looking at the biomedical industry, where we will be developing target courses for this area," she says. "There we are looking at career progression in areas were we have never had it before."
While the public sector can get involved in things like INTEC, there are other ways local governments can make life easier for any company to grow. One complaint that is routinely heard is in the area of permitting for new facilities or expansion, and both the city and the county have been working on addressing those issues. Additionally, the county has considered becoming a limited partner in a high-tech business park in the Valley.
It's impossible to talk about new businesses and the high-tech sector without talking about money. Once an entrepreneur has a viable business idea on the table, the next step is usually to secure funding, and the Inland Northwest is generally not perceived as an affluent area. Local developers like Brewster sometimes struggle to find the capital they need.
"We are going to end up at a standstill if we don't come up with better banking here," Brewster says. "We need bankers who are interested in lending out some money."
Brewster adds that a big part of the high-tech equation is creating a community that the kinds of people who work in the high-tech industry will want to live in. Seattle and Portland provide good models for Spokane to emulate. It's essential, he says, for the area to invest in shops, restaurants, bars and other entertainment facilities, which is where the lenders come in.
"Who is going to leave a $100,000 job in Seattle to come here for $125,000, if there is nothing else to do here and all this cool stuff is going on in Seattle? This city puts more money into strip malls and 'credit worthy' big-box tenants instead of locally owned bars and business," says Brewster. "That's a mistake. We'll never get a diverse and interesting community going if we continue to do this."
But local IT companies have had some luck finding local money.
"I think the resources have always been available. I mean, we had to go and drill down and find them, it's not like they hit you over the forehead," says Chuck Watkins, who started roguewave, a full-service design agency and media software technology company, last November. "You try to align yourself with the right people. We found some capital here in Spokane, but it's never easy. In the end, there is no substitute for generating revenue quickly."
But young companies should not get hung up on the idea that venture capital can only come from local sources.
"LineSoft's big investment came from outside of the area, and Advantage also raised money from outside the area," says Joe Herzog of the Spokane office of Northwest Venture Associates, the largest venture capital fund focused on the Pacific Northwest. "There doesn't need to be a source of capital in your back yard." Herzog adds that, "nationally, the world is awash in venture capital," a trend that also applies to the Inland Northwest.
"When we set up this firm in '96, there was a handful of venture funds in the area. Now there are between 30-40 funds," he says. "When we invest in a young company, we believe it's healthy to have some funding from the area. But we sometimes lack the deep domain expertise in a particular industry, and that's when we try to bring someone in to make a strong consortium."
Herzog says the area badly needs a research university to really take off -- a point that is mentioned by many others -- but he doesn't think the healthcare industry is where the big economic boom will take place.
"I think that will remain a large service sector for us. But as far as biotechnology and research, that generally takes way too much money and way too many Ph.D.s. I don't think that's something we can carry here in this area," says Herzog.
"Still, my personal prediction is that we'll see twice the economic growth in the area during the next 10 years, as compared to the previous 10 years."