Building the New Economy

Travel along the 43-mile stretch of U.S. Highway 101 from San Francisco to San Jose, and you can see the new economy taking shape. It's here, in the cranes towering above San Francisco International Airport, which is adding a $2.4 billion international passenger terminal and light-rail complex to handle the growing army of engineers, programmers, and deal makers who are descending on Silicon Valley. It's here, in the new 709-unit Toscana apartment complex in Sunnyvale, where rent for a one-bedroom starts at $1,475 and where every unit comes with a superfast Internet connection. It's here, in the distinctive blue-and-white buildings of Intel's Santa Clara campus, where a team of construction workers is racing to upgrade a 150,000-square-foot office facility.

Business futurists like to describe the new economy in terms of bits and bytes, of megahertz and nanoseconds, of underground fiber optics and orbital communications satellites. But here, at ground zero, the action is in drywall and concrete, in plumbing and HVAC (heating, ventilation, and air-conditioning) systems. Even a virtual economy requires an actual environment.

Chris Smither builds the buildings that house the new economy. Six years ago, the blond, blue-eyed native of southern California was building a J.C. Penney store in a shopping mall outside of Los Angeles. One day, he recalls, "I looked at my future and said, I don't want to build cinder-block buildings for the rest of my life." Today Smither, 29, is project manager on a $100 million campus for Novell, the Provo, Utah-based software giant. The five-building campus, set on 45 acres just off the Brokaw exit in San Jose, will be home to about 1,000 programmers, engineers, salespeople, and executives. It will offer all the amenities that Silicon Valley's knowledge workers have come to expect, including well-stocked weight rooms and a two-story dining atrium with its own cappuccino bar. "In this area, you have to do everything in your power to recruit the best," Smither says. "It's like building a new stadium for a football team: Everybody does it, because all the teams require it."

Not everybody does it as fast as Smither's team, however. Novell broke ground for the project in September 1997. Since then, Eric Schmidt, the company's change-oriented CEO (who was recruited away from Sun Microsystems), has made lots of changes to the plans for the campus -- going so far as to eliminate one floor from every building. What's more, El Niño dumped two years' worth of rain on the site in just five months. No matter: Smither's project is still on schedule. Novell's troops expect to occupy the facility on December 1, 1998 -- just as the original contract stipulated. "Five years ago, this might have been a three-year project," Smither says. "We're doing it in 14 months."

How can Smither finish such a complex project on time and on budget -- when, these days, it seems impossible to renovate a kitchen without delays and cost overruns? Because he works for DPR Construction Inc., a general contractor and construction-management company that is applying the ideas, practices, and technologies of the new economy to a business as old as the pharaohs.

"Fast" is too mild a word to describe DPR's rise. Based in Redwood City, California, the company was founded in 1990 by Doug Woods, Peter Nosler, and Ronald Davidowski (the D, P, and R of the company's name). It has grown from 12 people to 2,000 people -- and from annual revenues of less than $1 million to an expected $1.3 billion this year. To put that growth in perspective, consider Bechtel Group Inc., perhaps the world's best-known construction company. Bechtel reported 1997 revenues of $11.3 billion -- but Bechtel also just celebrated its 100th anniversary. DPR was founded eight years ago. Today it is one of the fastest-growing general contractors in the United States, with offices in 11 cities around the country.

DPR specializes in building for six industrial sectors: biotechnology, pharmaceuticals, microelectronics, entertainment, health care, and corporate-office development. Its client list reads like a "who's who" of the new economy: Applied Materials, Charles Schwab, Sun Microsystems, Genentech, Pixar. The company has a simple statement of purpose: "DPR Exists to Build Great Things." But delivering on that mission demands radical innovation. DPR has become a fast company in a slow industry by absorbing many of the ideas that drive its clients.

"It's incredible," says Nosler, 58, who was a graduate student in physics before he decided to become a builder, thereby following in the footsteps of his father and grandfather. "Construction companies work with so many new businesses and encounter so many new ideas. But this industry remains so retrograde. DPR was born in Silicon Valley. We've been exposed to new ideas from the computer industry, from Stanford, from the gurus and consultants who migrate to this part of the world."