The next big thing: beyond the glitz and glam, L.A. is a risk-taking capital of invention.

YES, Hollywood has always drawn the headlines.

But underneath the glitz, an army of engineers and inventors has been busy in garages, research labs and warehouses churning out an impressive array of innovations.

L.A. gave the world the first laser, e-mail, artificial heart, insulin pump, commercially viable aircraft and freeway--not to mention the first independent movie studio.

Innovation, it seems, is a constant in the still-young history of L.A. And why not? Dreamers and risk-takers have always been drawn by the region's huge marketplace. Add in the topnotch research institutions and industry networks that have grown up here, and the result is a thriving hive of activity.

"Innovation is going on all around us," said Al Osborne, founder of the Harold Price Center for Entrepreneurial Studies at UCLA. "Southern California is a new, entrepreneurial community, willing to allow people to take risks and fail and then come back better and stronger."

It's in that spirit that the Business Journal introduces a weekly section called "Innovation" that examines the companies doing new and creative things in Los Angeles. There's plenty to explore: at least 2,000 patents a year are granted to L.A. residents or L.A.-based facilities.

In 1999, the most recent year for which the U.S. Patent and Trademark Office released metropolitan area breakdowns, 2,348 patents were issued to local filers. This puts L.A. County in fourth place nationwide, behind the Bay Area, Boston and Chicago, but ahead of New York and San Diego--as well as research clusters in North Carolina.

Academic sponsors are one reason. Last year, 34 patents were issued to researchers at UCLA alone, while another 140 patent applications were filed.

These are leading to significant numbers of products entering the market. In the past 10 years, Caltech's Office of Technology Transfer has taken equity stakes in more than 90 startup companies based on technologies developed there. Eleven of the companies have gone public or been acquired.

Then there are the serial entrepreneurs, people who time and again come up with a new idea, take it to market and then go public or sell to a larger firm.

So how did L.A. get to be such a center for innovation? It starts, of course, with the weather. The region's Mediterranean climate played a role in starting three key industries in the early years of the last century: motion pictures, aerospace and space technology.

In 1910, just as the fledgling aircraft industry was launching, the Los Angeles Chamber of Commerce ran a big advertising campaign for an air show at Rancho Dominguez. The chamber touted the area's clear weather as ideal for daredevil pilots and plane makers to test their craft.

The show was a success and within two years, people like Donald Douglas had come out to L.A. for the purpose of building military or civilian aircraft. In 1920, Douglas co-founded Davis-Douglas Aircraft Co. with headquarters in Santa Monica. Fifteen years later, Howard Hughes founded Hughes Aircraft Co., cementing L.A.'s role as the center of aircraft manufacturing.

New school

Simultaneously, L.A. became a center for astronomical and pure scientific research, again thanks to the weather. In 1904, astronomer George Ellery Hale established an observatory atop Mt. Wilson, taking advantage of usually dry and clear nights for ideal observing conditions. As the observatory gained fame, Hale teamed up with Amos Throop to transform a small college in Pasadena into a top-notch scientific research institution that is now the California Institute of Technology.

"You had these parallel runs of astronomy and aeronautics that would come together in the early 1930s with the creation of the aeronautical laboratory at Caltech," said Kevin Starr, professor of history at the University of Southern California and former state librarian. That lab designed the DC-3 aircraft that became the first profitable commercial airplane. It also incubated the rocket technologies that would later launch the Jet Propulsion Laboratory.

"It set up a cross-fertilization of ideas that would lay the foundation for decades of innovation to come," Starr said.

The weather also played a crucial role in launching L.A.'s most famous industry: film production. In the first decade of the 20th century, some of the first motion picture production companies set up shop in L.A., taking advantage of generally reliable weather and ideal lighting conditions for film production.

In 1911, Al Christie and David Horsley founded Nestor Studios, the first movie studio in Hollywood. Others followed, seeking to escape the clutches of an East Coast film production oligopoly headed by Thomas Edison's Motion Picture Patents Co. Among this crop of filmmakers: Cecil B. DeMille, D.W. Griffith and Carl Laemmle.

The film industry added another crucial element to L.A.'s innovation mix: creativity. "L.A. became a center for design and professional services, many of which began to service the entertainment industry," said Ross DeVol, economist at the Milken Institute in Santa Monica.

World War II and the Cold War put the focus back on the aerospace industry. As federal dollars poured in by the billions, aerospace companies like Northrop, TRW and Rockwell were churning out innovations like clockwork in missile technology, stealth radar evasion technology, lasers, and communications satellites.

Meanwhile, L.A.'s car culture was spawning a new wave of innovation, from the Arroyo Seco Parkway that opened as a freeway in 1940, to drive-thru restaurants. Later, L.A. became a center for the auto design industry.

Growing pains 

After the Cold War ended, local aerospace went into sharp decline. It took awhile, but laid-off engineers began to form their own companies. Some veered into the intersection of technology and entertainment that led to companies like Santa Monica-based video game maker Activision Inc.

Immigrants have added a new perspective.

"Over the last 20 years, we've created a real salad bowl of cultures here that has spawned a whole new set of entrepreneurial ideas," said DeVol. One example: Andrew Cherng's Panda Express fast-food chain.

While innovation continues, there's growing concern that L.A. is falling behind other areas, particularly in transferring technologies from the research lab to the marketplace. Unlike Stanford University in Silicon Valley or the Massachusetts Institute of Technology in Cambridge, Mass., which have been spinning off innovations into companies for decades, local universities have only really started doing this over the last 10 to 15 years.

"We're way behind Stanford and MIT," said Bill Johnson, professor of engineering and applied science at Caltech who is also on the board of a spin-off company known as Liquid Metal Technologies.

Johnson started a predecessor spin-off in the 1980s that specialized in metal coatings with a flexible, glassy structure. He went outside Caltech to start commercializing the coatings, hooking up with a now-defunct Orange County oil services company before co-founding his own company.

UCLA's technology transfer program is older than Caltech's, but for years was tied up in bureaucratic knots as the entire University of California administration wanted a say in the licensing of technologies.

Only now is there talk of integrating the university's vast research programs with the business and management savvy of the Anderson School of Management, according to Bob Foster, executive director of the Center for Management in the Information Economy at UCLA.

This type of assistance would be welcomed by Ben Wu, a bioengineering professor at the UCLA School of Engineering who, along with orthodontics professor Eric Ting, is developing a protein that can be used to repair fractured bones. Wu, Ting and several other partners have each put in tens of thousands of dollars of their own money into the effort.

"I enjoy the open, collaborative spirit here at UCLA that enables us to solve all the little scientific problems that crop up," Wu said. "But we're not trained in the business aspects, so taking our product to market is moving more slowly than I had expected."

In the longer run, other factors of concern include the quality of K-12 and community college education and the high cost of housing. But L.A. still has plenty of strengths going for it that are likely to keep it a center of innovation for decades to come.

Said Osborne: "The creative people are still here and this remains a trend-setting place with leading-edge thinking."

Beautiful Minds

Test your knowledge of L.A.

1. What product was patented by the late actor Paul Winchell, known as the voice of Tigger?

a) Artificial limb

b) Artificial lung

c) Artificial heart

d) Artificial hip

2. Which wasn't invented in L.A.?

a) Drive-in movie

b) Valet parking

c) Drive-through restaurant

d) Freeway

3. Clothes designer Rudi Gernreich came up with these female fashions, except:

a) Topless bathing suit

b) Panty hose 

c) Designer jeans

d) Thong bikini

4. Which toy was invented by local aerospace engineer Lonnie Johnson?

a) Legos

b) Tinkertoys

c) Silly Putty

d) Super Soaker

5. Googie architecture, created in Los Angeles, has which of the following characteristics?

a) Upswept roofs

b) Large domes

c) Sheet glass windows

d) Flying saucer shapes

e) All of the above

6. Which food item wasn't created in L.A. County?

a) Hot fudge sundae

b) Popsicle

c) Cobb salad

d) Cheeseburger

7. The Heimlich maneuver was first demonstrated at which L.A. hotel (1974)?

a) Biltmore Hotel

b) Ambassador Hotel

c) Beverly Hilton

d) Century Plaza Hotel & Suites

8. True/False: The Zamboni machine was invented in Los Angeles.

--David Nusbaum

Key:

1. c 2. a 3. b 4. d 5. e 6. b 7. a 8. T