Tulsa was a played out oil-and-gas town.
Today, the town's boosters have recast it in the role of telecommunications superpower. The area has more than 54,000 high-technology jobs, which account for roughly 8 percent of local employment, a share that matches well-known technology centers like Raleigh-Durham, N.C.; Dallas; and Stamford, Conn. In the next three years, a recent survey of area employers shows, the region is expected to add as many as 6,000 positions in telecommunications alone.
Tulsa's emergence as a high-technology center seems all the more impressive, said Craig Knutson, chief Oklahoma economist for Southwestern Bell, because it is occurring in a state not widely known for its high-technology infrastructure or its educational system. According to the American Electronics Association, Oklahoma ranks 28th in high-technology jobs among the 50 states and has a per capita income below the national average. The Tulsa area, with roughly a quarter of the state's population, accounts for 60 percent to 70 percent of Oklahoma's high-technology employees and revenues.
That such an unlikely place has become a new-economy hotbed is, in fact, largely a result of the legacy of its previous boom, Knutson said. For one thing, the explosive growth of the city in the 1920s bequeathed it a magnificent legacy of impressive Art Deco buildings, many of which are now attracting Internet and other information-oriented companies, and elegant close-in urban neighborhoods ideal for skilled professionals and managers. Philanthropy fueled by oil and gas wealth has also provided Tulsa, which has a metropolitan population of 800,000, with an attractive civic infrastructure that includes a respectable ballet, an orchestra and art museums that far outpace its larger, cross-state rival, Oklahoma City, and other similarly sized Southwestern cities.
But perhaps more important, the energy legacy -- specifically its management information systems component -- also bequeathed Tulsa a large cadre of employees with high-technology skills, who now work for the city's high-technology businesses. This labor pool, plus a low cost of living, has attracted a host of large information businesses, including the travel-reservation company Sabre Holdings and the communications carrier WorldCom, as well as aerospace companies like Aeromet.
Another important factor in Tulsa's resurgence has been the makeover of the Williams Companies, which was founded in 1908 as an oil pipeline business. Since the early 1990s the company, long an anchor of the old energy economy, has been using the rights of way from its extensive gas pipelines to create one of the nation's primary fiber optic networks and become a leading provider of broadband services for telecommunications companies like SBC Communications. (Two of SBC's rivals, Sprint and Qwest Communications, were spawned by the Southern Pacific Railroad, which used its right of way to find a place in the new economy.)
The Williams Communications unit, which had roughly 200 employees in Tulsa in 1996, now has more than 2,000. The number is expected to double by the end of next year. This surge in employment, including thousands more temporary jobs at Williams itself and others created by its subcontractors, is helping to transform Tulsa's once sleepy downtown. The symbolic center of this new activity is Williams' new 15-story, 45,000-square-foot stacked urban campus, which is being designed to serve as the nerve center of the company's national fiber optic network. Over all, downtown office vacancy rates, which stood in the 20 to 30 percent range in the mid-1980s, have now fallen into the single digits.
Tulsa's emergence parallels the rise of several other "second tier" cities -- places like Albuquerque; Boise, Idaho; and Cedar Rapids, Iowa -- that are finding new niches in the information-age economy. In many cases, these cities offer lower living costs, equally good business climates and a more family-friendly atmosphere than places like Silicon Valley, Boston's Route 128 or Dallas-Fort Worth. | The resurgence of such cities also often parallels -- and is spurred by -- the reinvention of many denizens. A decade ago, for example, Carol Mersch and Tony Bacher were among the last to leave the sinking ship that was Tulsa's old energy economy. Co-workers in the information systems division at Reading and Bates, a local drilling firm, they hung around in order to process the terminations of their fellow workers, before ultimately issuing their own.
"It seemed like half of Tulsa was being terminated," Mersch recalls.
The two technologists decided to start their own firm, Mersch-Bacher Associates, to develop business software products for IBM's newly announced AS-400 computer platform. The company was a big success. Seven years later, in 1996, the two began another venture, an Internet service provider called Webzone, which by 1999 had more than 12,000 subscribers. The partners sold both companies last year for more than $6.5 million. "We started because we didn't have jobs and no prospect of getting one," Mersch recalls. When the oil bust came, it forced a lot of people to rethink their careers." Tulsa's high-technology growth does have its limitations.
Even the most extravagant boosters are not ready to sell downtown Tulsa as a rival to such creative Internet centers as Boston's Cyber District, Lower Manhattan, Santa Monica, Calif., or San Francisco's South of Market. As a bible belt city with a modest nightlife, lacking both a highly recognized research university and convenient air connections, Knutson suggests, Tulsa is unlikely to emerge as a full-fledged information-age capital.
Indeed, most of the growth, whether at giants like WorldCom and Williams or smaller companies, continues to stick largely to the telecommunications and enabling software side of the information boom.
Still, in many ways, such infrastructure concerns -- those that provide the roads or software for the information superhighway -- may prove stronger and more impervious to market fluctuations than the so far largely unprofitable dot-coms that have sparked revivals in other cities.
Typical of Tulsa's new arrivals are companies like SecureAgent.com, which provides encryption software for major corporations. The company's founder, Brent Johnson, spent much of his life in the Bay Area before coming to Tulsa to work as a consultant for American Airlines. In 1992, he founded SecureAgent, not in Silicon Valley but here, in a
place that offered an expanding telecommunications network in a lower-cost business environment. Tulsa is a little-known secret," says Johnson, whose firm employs 24 people and plans to add 40 more in the next 18 months.
He sees costs for engineers, who are paid, on average, roughly 40 percent less than their Bay Area peers, as a major plus for his company, and he likes the relatively low prices for housing and his company's office space in a refurbished downtown structure. "This building has a lot of character," he says, "and this building costs me less than it would have cost me in California 10 years ago."
Being in a technical, as opposed to content-oriented, niche, Johnson says, makes it easier to flourish in a city like Tulsa, which lacks the fine restaurants, and other accouterments of centers like New York or San Francisco. Unlike a media or content firm, Johnson explains, a company like SecureAgent.com is not dependent on regular face-to-face contact with prime customers.
"Our customers are all over the world," he says. "It doesn't matter where we are. We are not going out to lunch with them. We can do just fine where we are."
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