A tech boom won’t be heard in Orange County anytime soon, and the region will probably settle into economic growth on par with the national average, says University of California-Irvine Economics Professor Amihai Glazer.
The number of notable area tech firms decamping here for Silicon Valley in recent years, and the potential for similar relocations going forward, there is a large reason for the muted forecast, he said.
“There is a lot of evidence that firms that use lots of talent like to be near other firms that use that similar talent,” Glazer told the Business Journal this month.
“If you have a large presence, that’s going to attract others. That’s true in Silicon Valley, with tech. It’s true of San Diego in bio-technology.”
He noted that hard drive maker Western Digital Corp. moved its headquarters designation from Irvine to San Jose, and hot cybersecurity firm CrowdStrike Holdings Inc., which went public a month ago, shifted its base from Irvine to Sunnyvale.
Both firms still have sizeable presences in the area.
1.3% Job Growth
Glazer outlined his view of Orange County’s future less than a month after Chapman University economists, led by president emeritus James Doti, issued its latest forecast for the area.
Orange County with 1.3% job growth this year will fall behind California’s 1.5%, according to the Chapman forecast. A “major reason” for the gap is the 8% growth in information-related jobs in Silicon Valley compared with “virtually no growth” in the sector in Orange County, Doti said.
Despite the high-tech difficulties, Orange County’s unemployment rate was 2.4% in May, well below California’s 3.5% for the month, according to the state’s Employment Development Department.
Glazer, who has been at UCI for 40 years, has specialized in studying tech and retail giant Amazon, which this month turned 25 years old.
Despite having a few notable local locations, he describes the e-commerce giant’s presence here as modest.