Tag Archives: az business magazine december- january 2008

High-Tech Hopes For Arizona

The State, its universities and business groups work to make Arizona a high-tech powerhouse.

When the new millennium arrived, high-technology activities in Arizona were on a slide. The industry was unable to keep pace with the job demands of an expanding population or match employment growth in other economic sectors. That was then.

The state’s high-tech picture is much brighter now. Semiconductor, aerospace, defense and optics firms continue to be major forces in Arizona’s tech industry. But there’s also a growing presence of companies specializing in biotechnology, information technology, nanotechnology, renewable energy and other areas that fit under the high-tech umbrella.

A roll call of companies with their headquarters or major divisions based in Arizona is an impressive one. That list includes names you should recognize, such as semiconductor powerhouse Amkor Technology, optical-engineering firm Breault Research Organization, On Semiconductor and the highly diversified Avnet Inc. It also includes a high-tech Who’s Who: Raytheon, Intel Corp., Honeywell International, General Dynamics, Boeing, Motorola, W.L. Gore & Associates and IBM among others. And they have been joined by relatively recent arrivals such as Jobing.com, Ensynch Inc., Google, Monster, Amazon.com and PayPal.

“With Boeing, General Dynamics, Honeywell, Intel and Raytheon, you’ve got some big players here,” says Ron Schott, executive director of the nonprofit Arizona Technology Council.

Also, while the bulk of these companies are spread across Maricopa and Pima counties, Arizona Department of Commerce spokesman David Drennon points to significant aerospace, defense and agricultural technology activity in the Yuma area and the growth of bioscience in Flagstaff.

None of this happened by chance. It took, Schott says, a lot of hard work by a lot of different groups and individuals.

“If you set up a positive business climate, these people are very, very intuitive and they’re intelligent,” Schott says. “And if they see things that are happening, people who are trying to make it a positive business state, they recognize that.”

The steps that led to the current high-tech business climate are numerous and varied.

Gov. Janet Napolitano formed the Council on Innovation and Technology in 2003 to generate new development strategies. Later, the Legislature passed such measures as the Angel Investment Tax Credit Program to entice investors, and the “sales factor” tax bill, which led to Intel committing $3 billion in a new Chandler-based 300mm wafer-fabrication facility.

Other important developments include the formation of Science Foundation Arizona and the Translational Genomics Research Institute, or TGen.

Also vital is the role being played by the University of Arizona, Arizona State University and Northern Arizona University. It’s no coincidence Google took up residence on the ASU campus.

Alaina Levine handles corporate relations for the U of A’s College of Science. She also coordinates the Professional Science Master’s Degree Program, a workforce development program that serves Arizona’s high-tech industry.

“Individual business leaders know that if they’re going to start a company here or if they’re going to bring a company here, clearly they need to know that they’re going to be able to staff it with very talented individuals and that there has to be a critical mass of those individuals,” she says. “Otherwise, it’s not worth the investment of moving or starting the company here.”

Arizona Business Magazine Dec-Jan 2008Likewise, those universities need to be widely respected for their academics and research programs. The highly regarded Eller College of Management at U of A and the Biodesign Institute at ASU are just two examples of the level of academic excellence found in the state.

Arizona’s rapid growth translates to a need for even more high-value jobs in the tech sector. And further industry growth will require the availability of vital business resources outside of the dominant population centers.

“It’s a positive, glass half-full scenario here in the state,” Schott says. “That doesn’t mean we don’t have problems, but we’re trying to work and focus on those problems and improve the environment the best we can.”

Homebuilders Refining Their Services

In light of the economy’s condition, homebuilders are refining their services to meet the needs of their customers.

The Valley’s housing market continues to ride real estate’s proverbial wave, sometimes enjoying the crest, and right now just trying to survive the trough.

While the current down market isn’t good for homebuilders, it is providing homebuyers higher quality and stronger customer support to go along with the lower prices.

“Salespeople were in an order-taking mode for 10 years,” says Paula Sonkin, vice president of the real estate and construction industries practice at J.D. Power and Associates.

During the housing boom, Sonkin says homebuilders were unaccustomed to servicing the client beyond the initial point of sale. Now they are recognizing the importance of negotiating and developing relationships — new skills they have to learn as customers demand more sophisticated service.

Since a salesperson’s ability to meet clients’ changing needs generally has been subpar, homebuyers are turning to construction managers and on-site project managers who have become exponentially more important over the last year, Sonkin says.

“It’s a huge opportunity for builders, who are making sure construction managers have the people skills to communicate with the homebuyer,” Sonkin says. “Now builders and construction managers are having regular meetings with salespeople. We know the role of the salesperson has changed.”

Another example of how the slow market is good for buyers is better quality of construction. The J.D. Power and Associates 2007 New-Home Builder Customer Satisfaction Study was recently released and shows an increase in home quality since 2006. Sonkin says that’s partly because builders are constructing fewer homes, so they have more time to fix problems before the buyer moves in. According to the survey, satisfaction among homebuyers has remained high in Phoenix and across the country. Phoenix’s overall average for customer satisfaction is 107, while the national average is slightly higher at 111.

The survey shows these four builders rank first in the Phoenix market in their respective categories:

  • Overall Customer Satisfaction: Centex Homes
  • New-Home Quality: Trend Homes
  • New-Home Design: T.W. Lewis Company
  • Mortgage Originator: CTX Mortgage (serving Centex Homes)

The global marketing information services firm annually surveys people who have purchased new homes in 34 markets nationwide. The 2007 study ranks only new homebuilders who closed 150 homes in the 2006 calendar year and whose buyers submitted at least 50 usable surveys about the builder. The Valley, Sonkin says, is a highly competitive market because there are more homebuilders here than in most other places.

“If you think buying a car is a big deal, let’s talk about building a home,” says Sonkin, relaying what J.D. Power III told her 13 years ago as he was on the cusp of embarking on a new business endeavor.

“We did nothing but our homework for two years,” she says, explaining the company set out to uncover what needs existed in the homebuilding industry that the firm could help meet. As it turns out, there was significant need, and the J.D. Power and Associates New-Home Builder Customer Satisfaction Study was born. Builders can purchase the full-length version of the survey, which comes with complimentary consulting services provided by J.D. Power and Associates. Now in its eleventh year, the survey provides current information to industry leaders.

“(The study) is designed for J.D. to work with builders to better (their business),” Sonkin says, adding that the company oftentimes helps builders differentiate themselves from competitors on quality or design. “Our goal is to raise the bar in terms of customer satisfaction with consumer benefits.”

Centex Homes-Arizona started purchasing the survey four years ago.

“The (J.D. Power and Associates) brand is recognized by consumers as credible. The information captured in the survey is terrific,” says John Michell, president of the Arizona division of Centex Homes. “It validates some of the things we have worked so hard to achieve, and it puts a spotlight on areas where we still have opportunities to delight our customers. The team at J.D. Power gives suggestions on ways to improve customer service and training we provide our employees.”

Tempe-based T.W. Lewis Company, which ranks first in new-home design, does not purchase the study because it employs its own third-party surveyor, Woodland O’Brien & Associates, to poll its buyers and provide monthly feedback.

Still, T.W. Lewis Company President and Chief Operating Officer Kevin Egan says J.D. Power’s study has much to offer.

“(The study) would probably be beneficial to a homebuilder that rated poorly or one that lacks sophisticated survey systems,” Egan says. “The biggest value in the J.D. Power survey results is it validates what we’ve been doing, which is designing homes that fit our buyers’ needs and lifestyles.”

Fore more information on the companies mentioned,  please visit the corresponding websites:

www.centexhomes.com/phoenix
www.jdpower.com
www.twlewis.com