Phoenix the next Silicon Valley? It will take money for education

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PHOENIX -- The Phoenix area is seeing some start-up and medium sized companies come into the market because costs are low and they are still close to California. 

But beyond the economics, one business developer says you have to feed companies, and that means more money to higher education.

A once empty Phoenix warehouse has come to life over the last 18 months. Power-One is making electricity inverters for the solar industry.

“About 28 million dollars in this facility,” said VP of Technical Operations, Doug Schendt.

Schendt  said the company started with more than a dozen choices for its North American manufacturing location.  But Phoenix and Arizona made an aggressive play for the business that employs more than 400 people.

“Available real estate, good work force available,” listed Schendt. “University access that had good a program in renewable energy.  A lot of those characteristics were what we were looking for.”

A machine attaches tiny resistors to circuit boards. That is how an inverter begins in a large room filled with million dollar manufacturing machines, work benches and about 50 people. 

That board passes through many hands as those employees attach other hardware, solder small connections, and then there are various phases of testing before it gets the green light.

“You have to have people who can solder and run specialized equipment,” said Schendt.  “We've at times struggled there, but I think we're making headway now.”

Technology companies of all kinds struggle to find a skilled workforce outside areas such as Silicon Valley, California.

“Why does a place like California have such a great reputation for launching technology enterprises,” said Barry Broome, President and CEO of Greater Phoenix Economic Council.  “It's a cultural tendency.  We have that same cultural tendency.”

Broome believes the Valley is ripe to become another technology hub, but he says it won't happen without putting money into higher education.

“Just in our region,” he said. “We need a $2 billion science initiative, just in our region.”

The number sounds impossibly high, but Broome points to public support for sports.

“If you look at what we've done in stadiums, spring training facilities and arenas, we quickly go over a billion dollars in that space,” Broome said.

Back at Power-One, Doug Schendt continues to explain how they are expanding their product line and producing more inverters each month.

“Next month 2,000, and after that staffing to 3,000 boards a day,” said Schendt.

Power-One is hiring 60 more people.  Schendt said they are in Phoenix for the long run.

It may only take a financial commitment and a strategy to make it the next incubator to produce the world’s next great tech companies.

“To make our entrepreneurial environment turn into a tech corridor, we have to do that intentionally,” said Broome.

Broome points to common political rhetoric about government getting out of the way.  He says Arizona and Phoenix have done that for the most. 

Well-funded universities and community colleges may produce the next Steve Jobs or Mark Zuckerburg.