PacBiz Times: Technology Forecast: Innovation will be the theme for 2023

The Central Coast might never be Silicon Valley, but the technology scene that exists in San Luis Obispo, Santa Barbara and Ventura counties is strong and consistent.

That isn’t going to change in 2023.

One of the biggest questions around the technology industry, at least to start 2023, is labor. Salesforce, which announced Jan. 4 it would be cutting 10% of its workforce, is the latest of many big tech giants that have announced massive layoffs in the last couple of months.

Mid-sized tech companies have also announced job cuts. But here on the Central Coast, those cuts have been largely avoided.

“Most of those companies laid off because they scaled up really fast and based their projections on pandemic buying and figured out late that the world got more back to normal,” Rob Jupille, a business performance advisor at Insperity, told the Business Times.

Insperity is a Santa Barbara-based human resources company. As such, Jupille offered insight into what workers will be looking for in 2023.
Despite mass layoffs, Jupille believes the power still largely resides with the workforce, who will be demanding much more than just a big paycheck.

“Employers, to get good talent, are going to have to offer perks that are not necessarily monetary. Wellness services, extra time off, schedule, flexibility. Hybrid working isn’t going away and these companies that are mandating a comeback to the office won’t be able to attract the talent as easily,” he said.

MindBody in SLO laid off 450 people in Oct. while Apeel and Impact in Santa Barbara each laid off nearly 100 workers.

In Ventura County, Zume, a robotics company, announced more than 60 layoffs in November as well.

But, as Jupille said, the Central Coast has “largely avoided that because most of our companies locally seem to scale responsibly. It just doesn’t seem like we do these big hires and fires.”

Another big tech giant that announced layoffs last year was Amazon and the fate of that decision reaching the Central Coast is still unknown.
On Nov. 14 the company announced 10,000 layoffs would include divisions with significant outposts in the Tri-County area. Santa Barbara’s State Street houses an Amazon Alexa research unit. Two divisions that were targeted for cuts, according to the reports from the Wall Street Journal and Bloomberg, are Alexa and research.

Peter Rupert, a professor of economics and the director of the UCSB Economic Forecast Project, said keeping an eye on that outcome will be crucial.
But overall he is in agreeance with Jupille that Santa Barbara and Ventura have largely avoided layoffs and don’t expect mass layoffs in 2023.

“The number of job vacancies is the same. It didn’t change over the last couple of months and firms are still hiring,” he said.
Rupert added that the talk of a recession has become more of a “self-fulfilling prophecy.”

“If people believe there’s going to be a recession, then they start cutting back. So, it’s possible that nothing really happened to cause a recession, but all of a sudden people cut back on their spending, and consumption in the national accounts falls so, if people cut back for only because of beliefs, then we enter a recession,” Rupert said.

“The data, as far as I could tell, is not speaking toward a recession.”

Regardless of cutbacks, innovation will continue to thrive on the Central Coast in 2023.

For one, companies like Transphorm and Atomica, both in Goleta, will be trying to secure some funding set aside from the CHIPS Act.

The bill has lofty ambitions, with the total package estimated to be worth about $280 billion, including $52 billion in subsidies to entice companies to manufacture semiconductors in the United States and $200 billion for research into cutting-edge scientific fields such as quantum computing, AI, and robotics.

In November, deputy secretary Don Graves visited Santa Barbara, touring Transphorm, a global semiconductor company, and held a roundtable to receive an update on UCSB semiconductor research.

Overall, the CHIPS Act recognizes the geopolitical necessity to support these critical technologies domestically.

For companies like Atomica, that domestic manufacturing has already taken place in Goleta. The funding would only help the company scale further.

But also out in Goleta exists Google’s quantum computing lab, as well as UCSB’s own continued quantum computing research.

The amount invested in quantum computing is only going up by the year and even if it’s not in 2023, once the technology is fully realized, it could be the next big game changer in the technology sphere.

But with any new forms of technology also comes with using it responsibly. Jim Dunning, the associate vice president of corporate engagement and innovation at Cal Poly, said he believes the ethical use of technology will make great strides.

“Eliminating the bias in those systems will continue in 2023 and that will help increase the diversity in those that are developing that technology, which is important for the region and getting our universities to collaborate,” he said.

With the approval of offshore wind officially coming to Morro Bay soon, Dunning also believes startups and other companies alike will be tempted to come into the area and help make the project a reality.

He also believes that the university’s continued dedication to agricultural technology will continue making great strides.