California's Silicon Valley has attracted so many of America's high technology companies that it is choking on its success. Housing costs have become exorbitant, land prices are mushrooming, skilled engineers are harder and harder to recruit.
As a result, high tech is spreading. Satellite centers have developed across the South and West in medium-sized cities with strong research facilities, low taxes, an aversion to labor unions and, just as important, reputations as desirable places to live.
The movement of high tech has produced tangible benefits for the cities that have wooed and won electronics and computer companies. At a time when unemployment nationally is 10.8 percent, these new high tech centers have some of the lowest jobless rates in the country.
The current unemployment rate here, for example, is 3.8 percent and, as of September, Austin had the fourth-lowest jobless rate among 317 metropolitan areas surveyed regularly by the Bureau of Labor Statistics. In North Carolina, the Raleigh-Durham area, another high tech center, was 307th, while Colorado Springs, where an increasing number of high tech firms have located, ranked 237th.
California's Silicon Valley remains the acknowledged center of the high tech industry, but it now has some competition. "We are having trouble keeping industry in California," said Richard Jamison, a senior analyst for the Los Angeles realty firm of Coldwell Banker.
That has opened the way for aggressive recruitment programs by Sun Belt cities seeking light, clean industry rather than autos and steel that formed the industrial base of older northern cities. Where Sun Belt cities once looked north to recruit companies, increasingly they now look west.
"We're getting more than half our prospects from California and the West Coast," said John H. Gray, director of economic development for the Austin Chamber of Commerce.
As a result, high tech is rapidly become the industrial base of many smaller cities in the Sun Belt. In addition to Austin, Colorado Springs and Raleigh-Durham, other places that have successfully developed a high tech image are Phoenix, Albuquerque, north Dallas and increasingly San Antonio, where Mayor Henry Cisneros is trying to promote a high tech corridor along Interstate 35 between his city and Austin, a stretch dubbed "Silicon Gulch."
Boston has long been an acknowledged center of the industry.
Coldwell Banker's Jamison studied the spread of the high tech industry a year ago and found that Colorado Springs and Austin ranked first and second in new acreage devoted to high tech companies. The study also found that 73 percent of the firms covered originated in California and that 64 percent of them had left the state to expand.
One such company is the ROLM Corp., a telecommunications firm specializing in computerized telephone switching equipment. It was founded in California in 1969 and has facilities in both Santa Clara and San Jose. But when company executives decided to expand a few years ago, they found the economic climate in California inhospitable. As a result, ROLM recently has set up facilities in Austin and Colorado Springs.
"It's hard to find anybody who wants to live" in the Silicon Valley, said Klaus Kramer, ROLM's director of construction and facilities.
Kramer said high housing costs discouraged engineers from relocating to California, while land prices had been bid up by developers, making new acreage too expensive for small electronics firms.
Why Colorado Springs and Austin? "They are very desirable places to live," he said, "where housing is reasonable, where the climate is good and where the cities support the expansion of the electronics companies."
Austin has been particularly successful in attracting firms with roots in Silicon Valley. Lockheed Missiles and Space Co. looked at 80 cities across the Sun Belt last year before settling on Austin for its first divisional headquarters outside of California. Others that have moved to Austin recently include Advanced Micro Devices Inc., which put its first major expansion here, and Tandem Computers Inc.
But the cities that have successfully recruited high tech firms have more than moderate living costs and a relaxed atmosphere. They also have what has been called a "high tech infrastructure," which means a pool of skilled labor and strong research facilities.
In Austin, that means the University of Texas, with its excellent engineering college and its huge business school. In North Carolina, that means Research Triangle Park and the Microelectronics Center that was established with an infusion of state money. In Colorado Springs, the attraction is the confluence of defense and aerospace activity. In addition to the Air Force Academy, Colorado Springs now houses the Consolidated Space Operations Center, which will be command headquarters for future military flights of the space shuttle.
Three large non-union companies -- IBM, Texas Instruments and Motorola -- have major operations in Austin, while in the Raleigh-Durham area, only about 3 percent of the workforce belongs to unions.
"You'd be hard pressed to find an area with as low a level of unionization," said Bob Wheeler of the Raleigh Chamber of Commerce.
Firms that have moved from the Silicon Valley to other cities are enthusiastic about their decisions. "Our production in Austin is unequaled, by a large margin, by any other area," said Elliott Sopkin, director of communications for Advanced Micro Devices. "On some of the most complex products we've developed, these guys in Austin turned them out almost flawlessly."
Pat Becker, public relations manager for Tandem Computers, which set up an Austin plant to produce video display terminals for its computers, said the engineers who have relocated to Texas "are ecstatic" about their new home.
The attitude toward high tech is different. Sopkin recalls stopping at a gas station in Austin. When he told the attendant where he worked, the young man replied, "We like your kind of guys. You're clean."