Business English: Silicon Beach brings tech stardust to LA

Silicon Valley has a lot to answer for when it comes to branding. The concentration of technology companies near San Francisco has been such a storming success that it spawned a rash of imitators in cities and regions desperate to lure investors - and add some pizzazz - to their own tech corridors.

Consider Silicon Alley in New York, Silicon Fen outside Cambridge or Silicon Roundabout in London. Further afield, there is Silicon Welly (Wellington, New Zealand) Silicon Waidi (Israel) or Silicon Saxony (Germany).

Does the world need another Silicon anything? A growing band of tech, marketing and finance whizzes in Los Angeles thinks it does. With commercial rents falling across the city it has suddenly become affordable to lease space near the golden sands of Santa Monica and Venice Beach. Dozens of small start-ups moved in and - hey presto - Silicon Beach was born.

  The most important hightech companies in Silicon Valley

Brighton in England had already claimed the Silicon Beach title but Santa Monica and Venice may turn out to be a slightly bigger deal. Google has opened a vast office development in Venice next to Gold's Gym, the place where Arnold Schwarzenegger honed his deltoids in his bodybuilding days. The area is also home to a number of fast-growing tech start-ups: Viddy, a social media video application best described as an Instagram for video, has raised USD30m from investors; Scopely, a new social gaming company, has raised USD8.5m; and TradeYa, a bartering site similar to eBay, is on a fundraising round after striking a deal with a popular bartering programme on cable television which should raise its profile.

Silicon Beach's proximity to Hollywood has also ensured a neat dovetailing between the digital and entertainment industries. Maker Studios, a web video group that has modelled itself on a traditional studio by signing deals with creative talent and using local spaces to shoot its shows, has taken over several buildings in Venice and received funding from YouTube to launch online channels.

Local newspapers and magazines have jumped on the bandwagon with splashy stories about the thriving new scene. But does all the activity merit the hype? Lawyers at Cooley, a big US firm, think so: the company just opened its first offices in the area to take advantage of an expected boom in local start-ups.

The University of Southern California Marshall School of Business is also getting in on the act and recently ran an oversubscribed two-day Silicon Beach event with speakers and investors from local companies. "I was cynical at first but I actually believe there's a real transformation going on," says Andrea Belz, a senior lecturer in clinical entrepreneurship at the USC Marshall School of Business. "The real estate crash has triggered a change: offices are now affordable for companies to set up shop in areas of town that are of interest."

None of these companies has yet broken through into the big time. MySpace was developed in Los Angeles several years ago and won plaudits and admirers when it was acquired by News Corp for USD580m. But it slid into irrelevance: Facebook was a big factor but executives also blamed a lack of software engineering talent in southern California for holding up its ability to innovate. That may have changed, with Ms Belz saying the local talent pool has grown.

What is certain is that after a prolonged recession, any sign of growth is being eagerly seized. And if it fails it will at the very least have added to the glossary of places that have gone for Silicon-enhancement.