May 2003

DALLAS, TX (2004-05-03) Marla Crockett, KERA 90.1 reporter: If you want to understand the current dynamics in Richardson's Telecom Corridor, all you have to do is visit 740 East Campbell, near Central Expressway.

David Lester, Gallini and Lester Corporate Real Estate Advisers: Three years ago, it was the Southwest Headquarters for Ericsson.

Crockett: David Lester and his partner Joe Gallini represent companies looking for office space. When Ericsson moved to another facility in Plano and downsized, the 10-story building became practically vacant.

Lester: What you find here is going from a large corporate user taking most of the space to entrepreneurial companies starting here with low and cheap rent, free rent, furniture; whatever it takes to start their business.

Crockett: According to Lester, the bust in the Corridor has produced 7-million square feet of available office space - a backlog of 7 years. And that's in addition to the usual turmoil found on this Telecom prairie.

Don Hicks, Professor of Political Economy, University of Texas at Dallas: If you could imagine the vortex of a tornado, that's what the corridor should be described as.

Crockett: Don Hicks is a Professor of Political Economy at UT-Dallas in Richardson.

Hicks: This is a place where the frontiers of a lot of important industries are responding to each other, carrying the entire region along. We're being treated to a real Cuisinart of economic dynamics.

Crockett: And he doesn't predict a quick end to the rapid birth, growth, and death of companies, as the 150-year-old telephone industry continues to collide with the 50-year old computer age. But Ron Robinson, who heads the Richardson Chamber of Commerce and the Metroplex Technology Business Council, sees relief for the area's immediate woes. One of the first signs of recuperation came last summer when tech firms began hiring sales and marketing people to push their products.

Ron Robinson, President, Richardson Chamber of Commerce; President and CEO, Metroplex Technology Business Council: Almost congruent with that is the decision by CEO's to do initial risk-taking. In an upturning economy, risk-taking makes it all happen. So soon you have money flow, and money flow helps build the whole tech economy.

Crockett: Matt Blanton doesn't disagree with Robinson that there are new opportunities in the Corridor, but he does worry about CEO's and their willingness to gamble right now. That's what his company does. STARTech Early Ventures works closely with the Chamber and the city of Richardson to nurture promising small firms - technically and financially.

Matt Blanton, CEO, STARTech: We started just before the bubble, managed through the bubble. Over the course of that time, we've invested $18 million into 30 plus companies. We still have active between 20 and 25.

Crockett: Blanton believes there's a future T-I in this group, but they're all operating in a corridor hit harder than most during the downturn, partly because of the concentration of telecom firms. They set unrealistic expectations for growth, produced too many products, and hitched their wares to the inflated dot-com industry. While some in the Corridor may be waiting for the next big thing, most are preaching diversification and innovation.

Chuck Abraham, CEO, OraMetrix, Inc.: This is our manufacturing operation. These are two of the robots. We have three more in Berlin.

Crockett: The future of orthodontics, according to OraMetrix CEO Chuck Abraham, is robotics and computer imaging. OraMetrix develops treatment plans after studying 3-D models of patients' teeth - and then uses robotic arms to bend orthodontic wires made out of alloys that can be programmed into specific shapes.

Abraham: You'll notice the little grippers on the end. Those are custom-designed by us as well as this box here. It drives the position of the robot and once it puts the wire in the correct position, it applies heat through those grippers, which is what programs the memory into the wire. We're very, very precise. So we don't actually move teeth faster; we just move them more accurately.

Crockett: And that cuts the average time a patient needs to wear braces by 40 percent. The six-year old Richardson company was STARTech's first investment. The firm is working with 23 orthodontists, but has yet to make a profit. Abraham expects that to happen, but says one problem has been finding a way to teach engineers about teeth. Don Hicks says area universities are going to be hearing from a lot of companies like OraMetrix in the years ahead.

Hicks: The university is going to have to take the initiative in putting together learning curricula, styles of learning and content that is untraditional, and that's not easy for a university to do.

Crockett: Schools are also hearing from unemployed tech workers looking for guidance and new skills. Ron Robinson at the Metroplex Technology Business Council says 85 to 90 percent of those laid off in the past few years are parked in North Texas, waiting for the next opportunity. Nancy Korman of Richardson was one of them.

Nancy Korman: It's pretty hard to go from being thought of as 'I'm a big contributor' and 'I'm important' to 'I'm out here by myself.'

Crockett: Korman got laid off from her director-level job at Samsung in late 2001. It took more than 2 years, but she finally landed a contract I-T position with Verizon in January. She's thrilled to be working again, but took a 44 percent cut in pay and feels underemployed.

Korman: I'm working with some very bright people, but I'm used to having quite a bit of responsibility for quite a few people. Now I'm an individual contributor, so there's a big adjustment.

Crockett: Her situation isn't unusual. According to a University of Texas of Arlington survey of rehired tech workers, 86 percent reported getting less pay. Only 16 percent described themselves as satisfied in their new jobs. It was that uncertainty which caused Rusty Daniel of Dallas to leave the industry after he got laid off.

Rusty Daniel: I did not really want to get back in the telecom business. The whole market was just melting away, and I didn't see any reason to jump off a sinking ship onto another sinking ship.

Crockett: So, one month before his layoff benefits expired, a few relatives with hearing problems inspired the former Alcatel manager to invent a new product. He calls it SonicComfort.

Daniel: So I came up with this idea using the same technology as wireless headphones that would allow people to listen to the TV better without turning the volume up and disturbing others in the room.

Crockett: SonicComfort consists of two wireless speakers built into a suede headrest that drapes over the back of a chair. When you settle your head on the pillow, only you hear the sound.

Crockett: Business is fun again for Daniel, even though it's his money at risk and the headrest won't be ready for the market until September. Back in the Telecom Corridor, though, everyone agrees that small companies will lead growth in the region, although anchor corporations like Nortel and T-I have restructured to compete more effectively. Meanwhile, the corridor continues to experience lay-offs and the outsourcing of jobs overseas. There are also hints that non-technical companies are moving in to fill some of the available space and might dilute the Corridor's identity as a high tech strip. Economist Don Hicks:

Hicks: There is absolutely nothing written anywhere that entitles this region or this country to have leadership in a particular industry.

Crockett: He says the corridor and North Texas will have to fight all the time to stay competitive in this continuing transformation to a new age. For KERA 90.1, I'm Marla Crockett.