ANALYSIS: Hi-Tech PR - North Carolina - is it a Silicon sideshow?/Once touted as a center for research and development, Research Triangle Park (RTP) in North Carolina appears to have fallen off the map as a hi-tech hot spot. But those within the Triangle

The Greater Raleigh Chamber of Commerce web site shines like a beacon of what once was. It boasts that the Raleigh-Durham-Chapel Hill metro area, which comprises Research Triangle Park in North Carolina, was named ’The Best Place to Live in America’ by Money magazine in 1994 and ’The Best City for Business’ by Fortune magazine in 1993.

The Greater Raleigh Chamber of Commerce web site shines like a beacon of what once was. It boasts that the Raleigh-Durham-Chapel Hill metro area, which comprises Research Triangle Park in North Carolina, was named ’The Best Place to Live in America’ by Money magazine in 1994 and ’The Best City for Business’ by Fortune magazine in 1993.

The Greater Raleigh Chamber of Commerce web site shines like a

beacon of what once was. It boasts that the Raleigh-Durham-Chapel Hill

metro area, which comprises Research Triangle Park in North Carolina,

was named ’The Best Place to Live in America’ by Money magazine in 1994

and ’The Best City for Business’ by Fortune magazine in 1993.



While very few large companies are headquartered in RTP, this honor is

no surprise, as the area houses major offices for Cisco Systems, IBM,

Biogen, Ericsson, Motorola and Nortel. It’s also home to universities

such as Duke, North Carolina State and the University of North Carolina

at Chapel Hill, which spawn numerous tech-savvy entrepreneurs to help

fuel the local economy.





Lost its luster?



But what has RTP done lately? With Linux vendor Red Hat the only

significant technology IPO to come out of the area in years, RTP has

lost its luster to the outside world as a hi-tech hot spot. In fact, the

area has become more of a Bermuda Triangle for technology companies,

with the majority opting to be bought out, rather than go public.



Mitch Mumma, general partner at venture capital firm Intersouth Partners

in Morrisville, NC, says there were no other VC firms in the area when

they opened 15 years ago. And there were not enough outside VC firms

willing to invest in RTP companies, which hindered their growth.



RTP’s hi-tech explosion was also stalled by the universities, which

chose to license technology straight from their labs and ignored the

benefits of entrepreneurial commercialization, according to Monica Doss,

executive director of the Council for Entrepreneurial Development

(CED).



This lack of momentum has taken its toll on PR agencies in RTP such as

TechKnowledge Communications in Raleigh, which has been operating for 11

years. ’It comes and goes in waves,’ says president Ben Kittner. ’It’s

rising lately, but there were periods when I wondered what was next for

us. Fortunately, things always came through, but it has not always been

booming.’



PR pros outside of the Triangle seem more knowledgeable of RTP’s

failures than its supposed recent successes, and when asked about

emerging areas for hi-tech, are more likely to point to Atlanta, Austin,

Denver or Washington, DC.



’I don’t think (RTP) is a hot spot on our radar screen,’ says

Golin/Harris president Dave Gilbert, adding that they have no clients in

that area.



Richard Edelman, president and CEO of Edelman Public Relations

Worldwide, says they are only servicing one client from RTP, Ericsson.

’They (RTP) have done quite a good job of attracting pharmaceutical

companies, but they’ve hit the wall when it comes to technology,’ he

says. ’It’s a wonderful place to live, but it’s not a place we would put

an office,’ he adds, noting that RTP has the ’Philadelphia problem’ of

being located between two major cities.



Want more evidence? Brodeur Worldwide is the only agency in PRWeek’s

hi-tech top 25 in the area. (Ruder-Finn does service some hi-tech

clients from its Raleigh office). ’We go to locations where it’s

necessary for our clients,’ says Rob Key, SVP and group manager of Cohn

& Wolfe’s New York corporate/technology group. ’There hasn’t been a need

to drive expansion in that area.’



But many within RTP say the area has never slowed down and is now on the

upswing. And they point to Red Hat as the great white hope that promises

future success for the region.



’It’s significant because there was so much attention paid to it,’ says

Mumma. ’(Red Hat) had a lot of PR value for the Research Triangle, but

that’s not the whole story. There’s plenty of other stuff going on in

the region.’





IPOs on the rise



Since the Red Hat IPO, TechKnowledge’s Kittner says there have been more

out-of-town investors. The amount of VC funding leapt fivefold from

dollars 50 million in 1995 to dollars 250 million in 1998, and then

doubled to dollars 500 million this year, according to Mumma. Bill

Glynn, a partner at Southeast Interactive Technology Funds in Durham,

says he now sees a deal a day, and Doss says RTP expects four to five

IPOs in the next quarter. CED’s October Venture Update lists seven new

local companies that received funding the previous month, most of which

are dot-com companies.



According to Janet Swaysland, US GM for Brodeur Worldwide, RTP is

perfect for entrepreneurs looking for a better quality of life than

Silicon Valley or Boston can offer: a family environment, lower cost of

living and quality education. ’A lot of start-ups look at the path that

large companies have cut and say that this is a good place to be,’ says

Graham Wilson, chairman and CEO of Capital Communications in Cary.



The dearth of hi-tech firms in RTP also means that Brodeur can mine the

region unperturbed. Its office, originally launched in 1995 to service

IBM, now services approximately 20 dot-com, hardware, networking and

medical technology device companies in and around RTP. According to

Swaysland, growth at the Raleigh office has been on par with other

Brodeur offices since it opened.



Brodeur may not be alone for long, however. Copithorne & Bellows (now

called Porter Novelli Convergence Group) senior associate Jon Bornstein,

who has been telecommuting from the firm’s Boston office for the past

two years while living in Wake Forest, NC, says C&B plans to open a

Raleigh office during the first quarter of next year. ’There are so many

technology companies here and very few agencies that know how to do

technology,’ says Bornstein, adding that most agencies in RTP specialize

in areas such as sports marketing, community relations and

agriculture.



Kittner says the increase of hi-tech companies in RTP is also providing

opportunity for smaller, local agencies. ’Big companies usually go to a

New York or another out-of-town agency, and there hasn’t been much

opportunities for local firms to do more than project work,’ says

Kittner. ’But when the local dot-coms get funding, there’s more business

for us.’





Where’s the buzz?



So with all these new companies and all this money pouring in, where’s

the buzz? Swaysland argues that Raleigh just isn’t spending much money

to promote the region nationally. The older companies in RTP also

haven’t done much of a PR push, according to Mumma. ’SAS Institute is

the largest private software company in the country, but they have no

interest in PR,’ says Mumma. ’We’re disadvantaged by some successful

companies that are not interested in a national PR blitz.’



What’s next for RTP? ’If you take a look at other areas of the country

and the number of technology IPOs, we lag behind them,’ says Mumma. ’But

the bottom line is that it’s coming.’ And a dose of PR for RTP couldn’t

hurt.



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