As models strut down the catwalk, flashbulbs pop and the thumping bass of techno music is drowned out by the shrill screams of hundreds of teenagers. In this crowded hall in Laguna Beach, California, four budding clothing designers are facing off. To determine the winner, the audience members will send a text message with their mobile phones to vote for their favorite design.

It might sound like a reality show, but it's actually the high school internship program of La Jolla Group, an apparel company in Irvine, California. Every September, a handful of teens compete, each of them designing an outfit for O'Neill, La Jolla's surf-inspired clothing line. The winner of the fashion show receives an internship at La Jolla Group, a $4,000 scholarship, free clothes, and a mention in Teen Vogue.

La Jolla Group's CEO, Toby Bost, came up with the idea for the contest in 2007, because of a shortage of designers specializing in surf fashions. As the industry grew, he says, La Jolla and its competitors would frequently poach one another's employees. "I knew that we couldn't keep going on by pinching designers from each other's backyards," he says. "We needed to manufacture long-term talent by targeting students early and focusing them on a design career."

Bost worked with Shelley Sheppard, the director of marketing for O'Neill, the company's most popular clothing line, to develop the concept, which they dubbed Generation Next. Bost and Sheppard planned a six-month program that would culminate in a fashion show featuring O'Neill's spring collection. They would pair four teenagers with their designers, who would guide them through the process of creating a beachy dress and a handbag for O'Neill's junior line for women. Besides being able to form an early relationship with talented young people, there were other benefits to the contest. Working with teenagers seemed like a great way to get some insights about the company's younger customers. "It gave us a chance to get inside the minds of our target audience," Sheppard says. It was also a chance to drum up some publicity.

To find participants for the inaugural competition, Sheppard contacted career placement offices at nearby high schools in Southern California. Interested students were asked to write an essay about what fashion meant to them. Sheppard also contacted Teen Vogue. O'Neill had been advertising in the publication for several years, and the two organizations' marketing teams had worked on some events together in the past. "They said yes right away," Sheppard says. "From then on, our two marketing teams worked together." Teen Vogue offered to co-sponsor the contest and began promoting it to some of its readers via targeted e-mails.

Thanks to La Jolla Group's aggressive push -- as well as a tough job market that has created a high demand for internships -- the company received several hundred applications. One of them was from Rebekka Schuman, then a student at San Clemente High School in San Clemente, California. To Schuman, it seemed like the ideal opportunity to turn her interest in surfwear into a career. "It was like a light went off in my head," she says. The O'Neill marketing team and designers narrowed the pile to 10 applicants and conducted in-person interviews. Then they chose four finalists, including Schuman.

The teens worked with the designers about three days a month for a few hours after school. They put together trend boards of fashions that inspired them. Then they created several sketches of their designs. After that, the employees showed the students how to input their designs into Adobe Illustrator and create a so-called technical package, which specifies the measurements and fabrics to be used in manufacturing. After the dresses were made at O'Neill's factories, the teens did fittings with models.

Then the students focused on putting together the fashion show. That included promoting themselves and learning to be managers. Each of the contestants had to put together a team of 15 students from her high school: five to model clothes, five to help backstage, and five to help market the show by putting up fliers and using Twitter and Facebook to promote the event. One of the finalists even persuaded the cheerleaders at her high school to do catchy chants during football games. Building a team wasn't just about choosing friends, says Schuman. "I asked people who I didn't really know personally but who I thought would be perfect models or marketers," she says. "Everyone I talked to thought it was a really cool thing to be involved in."

Maybe it was cool, but participating in the contest was time-consuming, for both the students and the employees. "Besides this program, the girls had other activities like sports and clubs, and we didn't anticipate how difficult it would be to coordinate meetings," Sheppard says. "Our staff ended up working with them on weekends and late nights, which meant lots of extra hours for them." Schuman says the days leading up to the show were stressful as she and the other students worked several hours a night after finishing their schoolwork.

In the end, the effort was worth it. On the night of the fashion show in 2008, more than 500 people packed the exhibition hall. The turnout and enthusiasm were beyond anything La Jolla Group had expected. Schuman won for her white eyelet dress and faux leather metallic bag. Although there was only one winner, all the teens walked away with an impressive portfolio of designs and an insider perspective on La Jolla Group's industry. "The contest is creating talent for the next generation in surf design," says Bost. "My vision is that this talent will come work with us in the future and design some great lines."

It's too soon to see the program's long-term results, but the company received a record number of applications for its 2009 program and was able to get even more students involved by holding a pep rally at each of the finalists' high schools and providing buses to transport students to the venue to cheer their classmates on. Plus, three of the four contestants from 2008, the first year of the contest, have gone on to study fashion design, including Schuman. She recently started her freshman year at the Fashion Institute of Technology, a design school in New York City, and says that Generation Next altered her college plans. "Before, I was looking at going to local California colleges and wasn't sure what I wanted to focus on," she says. "The experience helped me discover a love for this industry, and now my goal is to build a career in it."