BUDDING TECHNOLOGY GETS BOOST\Alliance comes to aid of language software company.

Byline: Deborah Adamson Daily News Staff Writer

Gazing intently into her computer screen, Christine Montgomery has set her sights on the next generation of electronic language translators.

Ensconced in a small Woodland Hills office, Montgomery and her staff of eight at Language Systems Inc. are working on a sophisticated translator that rapidly converts spoken language into other tongues.

The military and law enforcement agencies have expressed interest in the unit, which will enable soldiers to quickly communicate with people in hotspots such as Bosnia or the Middle East and for the police to use it on patrols.

Thanks to a $250,000 matching grant by the state of California, Language Systems has become one of three possible recipients of an additional $2.5 million in federal funds.

"The California grant made a significant difference," Montgomery said. "We would have had to raise the funds somehow."

In the shadow of her success are the quiet hands of the Los Angeles Regional Technology Alliance, which awarded her the money. One of three such state agencies created in 1994, it seeks to nurture technology firms in the Southland.

"This is an industry that we feel is important to our future," said Rohit Shukla, the group's executive director. "(Many of these companies) rarely have the capital to continue research and development to keep their product base or their technology alive."

The alliance provides technology companies information that runs the gamut from government programs to market conditions. It gives matching grants to help companies get federal funds and assists them in finding venture capital.

While Silicon Valley is widely known as California's high-tech center, the Los Angeles area actually is home to more technology firms than the Bay Area.

About 54 percent of the state's technology companies are in the five-county region that includes Los Angeles, Shukla said. Los Angeles County alone has about 5,500 of these firms, out of 19,000.

Eight out of 10 companies have less than 1,000 employees, with the median being 15 to 20 workers for each firm. The industry employs 769,000 in five counties.

Shukla said many companies are located in the north and west parts of the San Fernando Valley, Burbank, Glendale, Pasadena, Camarillo, Simi Valley, West Los Angeles, the South Bay and Orange County.

The alliance was created to help the transition from a defense-dominated economy to more diverse industries. The group nurtures promising sectors such as biotechnology and multimedia, and has helped a number of laid-off defense workers who started their own companies.

Language Systems Inc. is one such firm.

It was formed by Montgomery in 1989 after Logicon, a defense contractor, decided to lay off people in its advanced technology department. A consultant to the firm at the time, she and three others formed the Valley firm and took over Logicon's existing contracts.

Language Systems specialized in analyzing blocks of text for military and other purposes. A year later, it decided to focus on the language translator.

While the alliance was able to give Montgomery's company a grant, a cut in state funding from $8 million last year to $6 million this fiscal year will hurt. Los Angeles has gotten between 40 to 60 percent of these funds.

"It's the wrong time for (the state government) to de-invest in technology," Shukla said. "It is the heart and soul of California's future."

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Photo (Color) Christine Montgomery of Language Systems Inc. is working on a software translator. Hans Gutknecht/Daily News