More Foreign Firms Calling Fairfax Home
'It Just Makes Sense to Come Here'

By Kim Hart
Washington Post Staff Writer
Thursday, December 7, 2006

John K. Yang fiddles with the blue, pen-shaped computer mouse he has spent three years peddling to local stores and national retail chains.

In Seoul, a team of two dozen businessmen and 150 manufacturers work to produce the ergonomic mouse, designed to reduce wrist strain, for customers in Europe and Asia. In marketing it in the United States, though, Yang is on his own.

He won't be much longer. His company, Waawoo Technology Inc., plans to move its headquarters from Seoul to Fairfax County as soon as it finds office space. Fairfax County's respected school system, diverse community and wide array of business opportunities make the area "a perfect fit" for the company, said Yang, immaculately dressed in a dark suit and bright green tie that matched the mouse packages that filled his Vienna office.

Waawoo Technology will join other foreign companies that are expanding their presence in the county, creating thousands of jobs and contributing millions of dollars to the tax base. In 1997, 17 foreign companies had Fairfax-based operations. Today, more than 350 companies from 30 countries employ about 20,000 people in the area.

The Fairfax County Economic Development Authority has aggressively recruited overseas companies to the area for more than a decade. It has opened satellite offices in key markets such as Tokyo, Tel Aviv and Frankfurt, Germany, and fostered business relationships with foreign delegations. Other local economic development agencies have also stepped in to tout the business communities of Northern Virginia, especially Fairfax County.

"We're constantly asked by embassies and trade groups to meet our member companies to try to partner up with them," said Randall Reade, chairman of the international committee of the Northern Virginia Technology Council, a consortium of 1,100 technology companies. "This is the largest concentration of tech firms outside of Silicon Valley, so it just makes sense to come here."

Nestled between Dulles International Airport and the federal government hub of Washington, Fairfax County has attracted a broad mix of nationalities, and many have set up shop in Reston, Herndon and Tysons Corner. Last month alone, 11 companies from Korea, 2 from Japan, 3 from Israel and 1 from the United Kingdom established or expanded offices in the county. Fairfax officials count about 50 Korean-owned companies, up from four in 2000. Four of the county's largest employers are headquartered outside the United States, including U.K.-based BAE Systems.

Gerald Gordon, president and chief executive of the county's Economic Development Authority, said many companies that establish a presence in the county "start with two to four people, get a contract, make a sale, and then they start growing dramatically."

Yang has found success in Fairfax, placing his product on the shelves of CompUSA and negotiating with Best Buy and RadioShack to do the same.

"This is a huge market, close to the federal government and lots of technology companies," he said. "If you want to be a global company, you have to be in the U.S., and we want to be in Fairfax."

Yang's office is housed in the Korean Business Development Center, a small-business incubator in Vienna, financed largely by the Korean government that helps Korean-based companies launch in the United States. Nine companies operate from the center, and the number of applicants has risen steadily in the four years since it opened.

Getting established, though, is not without difficulty. Obtaining work permits, visas and lines of credit is a long process for which many businesses, especially start-ups, are not prepared. Translating legal documents can also be a challenge, and the aggressive business culture of the United States sometimes catches companies off guard.

Madan Kondayyagari founded USM Business Systems Inc., a Chantilly IT consulting company, shortly after moving from India 10 years ago. It took nearly 18 months of working 17-hour days before he felt comfortable in the business community.

"We speak English, but this is still a foreign country," Kondayyagari said. "You have to accommodate another culture."

Other companies face hurdles even after establishing their U.S. presence. David Callahan, senior adviser of the Korea Business Development Center, said some companies have a hard time surviving outside the center's incubator program. Of the nine companies that have graduated from the program, one went out of business, another moved back overseas and four have stayed in the county.

"As with any small company, some will grow into the market and some won't," Callahan said, adding that some ventures don't get enough support from the parent companies back home.

The county's Economic Development Authority and the Northern Virginia Technology Council steer new companies to local real estate agents, lawyers and banks to help them get started. Individual countries have also set up offices in Fairfax to assist their companies relocating to the area. In Vienna, the Hungarian Technology Center opened three years ago to help companies expand in the United States. Also in Vienna, the Virginia Israel Advisory Board promotes the area to Israeli start-ups, and the South East England Development Agency plans to open an office next month.

Strategic Thought Inc., a British software company, benefited from the resources of its parent company 3,000 miles away. The company, which opened a U.S. office to be closer to federal customers and the local talent pool, has grown quickly since it opened a temporary, one-person office in Herndon two years ago. After landing contracts with NASA and Lockheed Martin, Strategic Thought moved in October to a new space in Herndon with enough room to accommodate 10 hires.

"Many [agencies] prefer to do business with a U.S. company," general manager Karl Pringle said. "If you're here in the market, you just hear things on the street you wouldn't hear otherwise."

Pringle said Strategic Thought chose Fairfax County because of its proximity to Dulles and relatively inexpensive office space.

"The time difference back to the parent company is less of an issue here, and you can get anywhere in the U.S. very easily because it's a travel hub," he said.

Fairfax has also attracted entrepreneurs. Seven years ago, Kiran Gullapalli followed friends and family to Fairfax from Hyderabad, India, and worked as an information technology consultant for several large companies. He then decided to start his own venture, Rapid Refill Ink, which refills and recycles printer ink cartridges. He opened his first store in Herndon in February and hopes to open two others in the area next year.

"This is an emerging high-tech region, so I've gotten a great response from small and large companies," Gullapalli said. "This area is very conducive to innovative businesses."

Yang has similar reasons and said the community, with its well-regarded schools and diverse neighborhoods, was a big selling point when the company chose to locate its U.S. operations in Fairfax.

Fairfax County's concentration of high-income consumers and technology-friendly markets is similar to Korea's business climate, so companies make an easy transition to the country, said Do Hyun Woo, the center's director.

The Economic Development Authority spends about $500,000, around 7 percent of its annual budget, to run offices in Seoul, Frankfurt, Bangalore, London and Tel Aviv. It plans to open a sixth office in a Latin American city.

Spending such resources on overseas offices has not always been popular. Five years ago, the Fairfax County Board of Supervisors criticized the agency as spending money to benefit foreign businesses rather than revitalizing faded areas of the county. Some politicians urged the agency to form partnerships with other countries without spending so much money.

But Gordon said the agency is more concerned with investing in the county's tax base. "Trade is a wealth generator, but it doesn't fill office space and help pay for public schools," he said. "I think people acknowledge the return has been much greater than the investment."

The technology council's international committee, which is organizing a venture capital event for March, has hosted groups from Argentina, Belarus, Latvia, India and Egypt. This month, organizations from Ukraine, Japan and Russia will visit Fairfax.

"Theoretically you can start a business in the middle of North Dakota as a way to get into the U.S., but you really need to be in an area where there's a high concentration of similar businesses around you to learn the lingo, get the best advice and meet people face-to-face," said Reade, of the Northern Virginia Technology Council. "The caliber of people I meet on a weekly basis is just astounding."

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