contra costa county: a blueprint for growth - milken...

Contra Costa County: A Blueprint for Growth

California Center October 2012

Armen Bedroussian, Kevin Klowden, and Haoran Zhu with I-Ling Shen

California Center October 2012


Armen Bedroussian, Kevin Klowden, andHaoran Zhu with I-Ling Shen

ACknowledGmentsWe would like to thank Chevron, the Contra Costa Economic Partnership, and the Contra Costa Council for making it possible to undertake this study. The authors would also like to thank Ross DeVol and Perry Wong for their valuable input. Finally, we would like to thank our editor, Melissa Bauman, for improving its readability.

ABout the milken instituteA nonprofit, nonpartisan economic think tank, the Milken Institute works to improve lives around the world by advancing innovative economic and policy solutions that create jobs, widen access to capital, and enhance health. We produce rigorous, independent economic research—and maximize its impact by convening global leaders from the worlds of business, finance, government, and philanthropy. By fostering collaboration between the public and private sectors, we transform great ideas into action.

© 2012 Milken Institute

ExECutIvE SummAry ................................................................................................... 1

IntrOduCtIOn ................................................................................................................ 5

A COunty In trAnSItIOn .......................................................................................... 7

A PAtH fOrwArd ......................................................................................................... 1 1

Industry Strengths .............................................................................................................. 1 1

Broadening Business development and Promoting Economic Growth ..................13

Achieving Objectives requires a three-Pronged Approach ................................... 17

focus 1. Enhance the workforce development Pipeline ................................................18

focus 2. Strengthen Industry Assets and Improve Business Climate .......................... 2 1

focus 3. facilitate Entrepreneurship and Innovation ....................................................25

StrAtEGIES fOr KEy CItIES In COntrA COStA COunty ......................33

APPEndIx: COntrA COStA InduStry PrOfILE ...........................................43

COntEntS

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Charting a strategic economic development plan is no easy task, but for a county full of untapped resources near one of the world’s most dynamic technology and research clusters, opportunity knows no bounds. Despite its competitive advantages, Contra Costa County faces many challenges that must be addressed if it hopes to achieve balanced, sustainable economic prosperity in the years ahead.

The good news is that the county already has expertise in a number of industries: petrochemical manufacturing, telecommunications, construction, financial services, biomedical research and manufacturing, and advanced consulting, to name a few. One key will be effectively incorporating emerging fields and technologies to support and allow these existing clusters to expand.

This report highlights some of the key challenges that Contra Costa County faces, namely, the lag in the creation of higher-paying jobs relative to the Bay Area, contraction in its industrial base, and unbalanced economic growth across the county. Without an effective economic blueprint, these challenges could limit the county’s growth potential.

Contra Costa lags behind Bay Area in higher-paying jobs, 2010

Education, training, and library

Computer/mathematical

Life, physical, and social science

Architecture and engineering

Legal

Management

Business and financial operations

Arts, design, entertainment, sports, and media

Construction and related

Installation, maintenance, and repair

Office and administrative support

Health-care support

Sales and related

Food preparation and serving-related

Community and social Services

Personal care and service

-1.00 -0.80 -0.60 -0.40 -0.20 0.00 0.20 0.40 0.60 0.80 1.00

More abundant in Contra Costa County More abundant in the Bay AreaLQ difference

Relatively low-paying jobs

Relatively high-paying jobs

Source: California Employment Development Department.

In addressing these challenges, we have identified three principal objectives that are critical if the county is to catalyze a more skill-based, diversified economy that takes advantage of its strengths and creates opportunities for emerging knowledge-based businesses.

1) leverage existing industry strengths and target potential synergies

The county and its cities need to prioritize the development of industries with the highest potential synergies with its local and regional workforce, markets, and industry base. Bioscience/medicine, technology/engineering, and consulting/professional services are at the top of that list. The three groups have expanded in the county over the past five years and have also forged close connections with the regional market and local industries such as heavy manufacturing.

ExECutIvE SummAry


2

2) Capitalize on underutilized resources

In 2010, the county had nearly 464,000 working residents, more than 39 percent of whom worked outside the county. According to the U.S. Census, a disproportionate share of county residents engaged in occupations such as science, engineering, management, and mathematics commuted to other parts of the Bay Area. Many may have located in Contra Costa for cheaper housing or quality of life reasons. Knowledge-intensive industries emerging in the county could draw on this talent pool to expand. Land is another underutilized resource.

workforce underutilization in Contra Costa County, 2010

Occupation Talent leakage (% of total)

Life, physical, and social science 66

Architecture and engineering 62

Legal 58

Computer and mathematical 57

Management 53

Business and financial operations 51

Arts, design, entertainment, sports, and media 44

Sources: California EDD, American Community Survey, Milken Institute.

3) Promote partnerships among stakeholders and jurisdictions

Economic development must involve stakeholders from both the public and private sectors. It is imperative that local governments and public agencies focus on maintaining industry strengths and providing more opportunities for private-sector involvement. While some collaboration across departments and jurisdictions already exists, efforts to sustain such networks and create new ones are vital for strategy implementation.

In fulfilling these objectives, we have come up with strategic recommendations and action items in three focus areas. To ensure that these parts work together, each strategy is guided by the three objectives above.

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Executive Summary

FoCus 1: enhAnCe the workForCe develoPment PiPeline

To maintain and strengthen its position in the global economy, Contra Costa needs to increase the synergy between its educated workforce and the knowledge-based economy by fortifying its workforce development pipeline from the K-12 system to post-graduation and vocational training. The following strategies are aimed at stimulating investment in human capital and addressing the mismatch between skills and industry needs.

Strategy Actions

S.1-1 Coordinate curriculum and tailor courses for future needs

A.1-1.1 Sponsor training program

A.1-1.2 Partner with major companies

A.1-1.3 Community outreach

S.1-2 Enrich opportunities for extracurricular learning and training

A.1-2.1 Create internship initiatives

A.1-2.2 Expand science fair and competitions

S.1-3 Promote partnership among local and regional education institutions

A.1-3.1 Sponsor exchange programs

A.1-3.2 Create regional education alliance

S.1-4 Attract regional talent

A.1-4.1 Campus marketing

A.1-4.2 Extend relocation assistance to international and regional talent

S.1-5 Promote job training programs A.1-5.1 Expand vocational training program

A.1-5.2 Lobby for workforce investment funding

FoCus 2: strenGthen industry Assets And imProve Business ClimAte

To build up its industry assets, Contra Costa County must complement its business retention and attraction efforts with a pro-business environment. The county and its cities should facilitate communication between existing employers and the community, introduce effective recruitment initiatives, and promote small-business facilitation programs. The following strategies are aimed at fostering a more business-friendly climate in the county.

Strategy Actions

S.2-1 Streamline business services and improve regulatory environment

A.2-1.1 Evaluate and improve regulations

A.2-1.2 Monitor and improve business services

S.2-2 Create Contra Costa Job Express Way A.2-2.1 Create Job Express Way

S.2-3 Recruit high-potential candidates

A.2-3.1 Create recruitment task force

A.2-3.2 Partner with real estate agencies in referral programs

A.2-3.3 Develop competitive incentives

S.2-4 Market existing strengths and potential synergiesA.2-4.1 Improve Internet business portal

A.2-4.2 Participate and host business conferences and summits

S.2-5 Improve connectivity with regional economic centers

A.2-5.1 Partner with Transportation Task Force for BART extension

A.2-5.2 Improve highway system

S.2-6 Promote community outreach and advocacy A.2-6.1 Participate and sponsor workshops and seminars

S.2-7 Promote local contracting and purchasingA.2-7.1 Prioritize local companies for public contracts

A.2-7.2 Create awards and recognitions for companies promoting local contracting

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FoCus 3: FACilitAte entrePreneurshiP And innovAtion

Entrepreneurship and the capacity for innovation are critical drivers of growth in a knowledge-based economy. Innovations can give birth to a new industry that enhances a region’s core competitiveness, as occurred in Silicon Valley. Entrepreneurs play a critical role in the commercialization of new technologies. Moreover, creating a more vibrant entrepreneurial and innovative environment can reduce the reliance of Contra Costa and its cities on external resources and help develop indigenous growth. To do so, the county and its cities need to widen access to capital, for startups in particular, and enhance the infrastructure that supports such a climate.

Strategy ActionsS.3-1 Promote startups to regional and national venture capitalists

A.3-1.1 Create venture capital committeeA.3-1.2 Create venture capital and startup database and forum

S.3-2 Strengthen and anchor regional innovation networks

A.3-2.1 Create innovation task forceA.3-2.2 Sponsor innovation seminarsA.3-2.3 Partner with local Chamber of Commerce to host innovation expos

S.3-3 Increase collaboration between business association and assistance programs

A.3-3.1 Partner with SBDC to improve existing servicesA.3-3.2 Create awards and recognitions for best performing programs

S.3-4 Create incubators to support startups

A.3-4.1 Create incentives for private incubators to expand in the countyA.3-4.2 Partner with local education institutions to develop incubators

Finally, to achieve sustainable growth across the county, economic development must be better balanced so that cities such as Antioch and Pittsburg are not left behind while wealthier spots like San Ramon and Walnut Creek thrive. In addition to providing strategies for the county as a whole, we provide supplemental recommendations with the goal of facilitating sustainable growth across major job centers. Many cities have detailed economic development agendas. The purpose of this sub-regional analysis is not to provide comprehensive economic development plans for each city, although we do provide specific examples of how cities can leverage their competitive advantages. The purpose is to align cities’ existing strengths and resources with elements of our general findings at the county level.

employment across the county’s major job centers, 2009

Sources: Walls and Associates, Dun and Bradstreet.

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Contra Costa County should be the envy of its peers. The third-largest county in the Bay Area, it boasts a population of more than 1 million. Its diverse industry mix, anchored by a mature industrial base, consists of roughly 77,500 establishments that generated $53 billion in sales and employed 450,000 people1 in 2009. It also has the distinct advantage of its proximity to the Bay Area, the world’s most dynamic commercial and technology center.

Despite these attributes, economic growth has been uneven across Contra Costa County, and job growth—just under 0.5 percent from a year ago2, according to the Bureau of Labor Statistics (BLS)—has been more subdued than that of its more prosperous neighbors. Contra Costa’s major urban centers, Concord and Richmond, are facing high unemployment due to the loss of several thousand manufacturing jobs over the past two decades and a decline in their industrial and commercial bases. Slower growth in higher-paying occupations compared to the Bay Area and the underutilization of resources are also major concerns. As a result of these factors, tax revenue and public expenditures have been constrained across the county, further jeopardizing the development of social and human capital. These challenges can limit the county’s potential for growth in the absence of an effective economic blueprint.

This study lays out a balanced and strategic plan for creating more widespread prosperity, addressing the particular needs of the region’s major job centers and industries. The strategy is based on an assessment of existing regional and local economic conditions and industry strengths, and makes use of existing resources and opportunities.

We have identified principal areas critical to developing a more diverse economy, one that will leverage on existing strengths and create opportunities to grow knowledge-based businesses. To fulfill these objectives, we use a three-pronged approach composed of strategic recommendations and action items. While this blueprint is constructed at the county level, the report also provides supplemental analysis across major job centers within the county. By aligning key elements of the blueprint to existing resources, this section of the report provides specific examples of how cities can build on what are already their strengths.

Our findings, as highlighted through the study’s recommendations, are meant to provide a platform that will engage county and city development officials, stakeholders, and public /civic leadership for input and consensus building that will lead to a more sustainable and brighter future ahead for the county.

The appendix at the end of this report includes a more detailed assessment of the county’s broader industry categories. The analysis helps support some of the key findings of the report.

1 Data (e.g. employment, sales, etc.) presented in this report, other than where specified, are derived from the Walls and Associates’ Dun and Bradstreet-based database (constructed in January 2009). Where appropriate, adjustments were made to the original data to remediate unreliability. For details about the D&B database, visit: http://www.dandb.com/.

2 Based on the latest BLS survey (“Quarterly Census of Employment and Wages”) through 2011.

IntrOduCtIOn

7

Though Contra Costa is one of the most economically influential counties in California, its economy is in transition. Largely dependent on manufacturing, Contra Costa now faces the onset of structural change and the emergence of new technologies and industries that present both opportunities and challenges.

First, Contra Costa has lagged behind the Bay Area in creating high-quality jobs. In the 1990s, Contra Costa was one of the best-performing counties in California. The average wage was on par with the Bay Area overall. However, by 2009 workers in Contra Costa on average were paid much less than those in the Bay Area as a whole. The key reason is Contra Costa’s difficulty creating quality jobs. Our analysis shows that high-paying jobs in general were more abundant regionally (Bay Area-wide) while lower-paying jobs were more abundant locally (Contra Costa). Lower-paying jobs have grown more rapidly than higher-paying jobs in Contra Costa compared to the Bay Area overall since 2003, resulting in the widening wage gap.

table 1: local and regional occupational structure, 2010

Occupation

Location quotients* (relative to California)

Employment growth (2003-10)

Higher-paying than

regional mean wageContra Costa Bay Area Contra Costa Bay Area

Regionally more abundant

Life, physical, and social science 1.25 1.32 8.8% 9.8% X

Architecture and engineering 1.07 1.44 0.5% -8.0% X

Legal 0.96 1.19 32.8% 5.5% X

Computer and mathematical 1.06 1.84 -15.8% 24.7% X

Management 1.05 1.23 2.2% 0.4% X

Business and financial operations 1.17 1.24 13.2% 21.5% X

Arts, design, entertainment, sports, and media 0.71 0.92 37.7% 15.4% X

Locally more abundant

Construction and extraction 1.21 1.02 0.0% -29.8%

Installation, maintenance, and repair 1.04 0.94 0.0% -13.3%

Health-care practitioners and technical 1.23 1.00 39.2% 19.2% X

Community and social services 1.08 0.98 98.4% 20.4%

Health-care support 1.31 0.94 29.2% 23.1%

Sales and related 1.12 0.98 7.8% -8.0%

Food preparation and serving-related 1.09 0.98 60.3% 7.0%

Education, training, and library 1.11 0.89 6.8% -1.1%

Personal care and service 1.23 0.97 40.1% 5.8%

* The location quotient (LQ) is a technique used to identify the concentration of an industry sector or occupation in a local economy relative to a larger reference economy. Throughout our study, we use employment numbers to calculate LQs. In this table, the higher the LQ, the higher the concentration of particular occupations in the specific area.

Sources: California Employment Development Department (EDD), Milken Institute.

A COunty In trAnSItIOn

8


second, the county’s traditional manufacturing sector has contracted. In the early 1990s, manufacturing was the key driver of the economy. Over 12 percent3 of private-sector jobs were concentrated in manufacturing in 1990, compared to less than 7 percent in 2010. Although some industries such as petrochemical, steel, and confectionery products still maintain a strong local presence, the manufacturing base has shed more than 10,000 jobs since 1990. As heavy manufacturing diminished, former workers faced challenges in acquiring new skills and adapting to new industries, contributing to rising unemployment. In the early 1990s, the jobless rate was much lower in Contra Costa than in the wider Bay Area. However, over the past two decades, that trend has reversed.

Figure 1: shrinking manufacturing base

12.0%

6.9%

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Thousands

Payroll employment (R )

Share (L)

Percentage of total employment

Source: BLS.

third, the regional imbalance in economic growth within the county has yet to be addressed. Job growth, in particular, has been uneven, but this is not a surprise given the county’s diverse geographic settings and industry structure in the county. What is more troubling is the lack of growth in the county’s major job centers. Nineteen cities in Contra Costa County provide more than 95 percent of its total employment. Concord, Walnut Creek, San Ramon, Richmond, and Martinez—the largest job centers—combined account for nearly two-thirds of all jobs in the county. Four of the five saw employment decline from 2004 through 2009; only San Ramon enjoyed moderate job growth. Among the 12 cities that grew their employment base during that same period, the new jobs were less likely to be in high-paying occupations such as engineering or high-tech industries. Although Antioch and Pittsburg saw job growth in the past few years, they struggle to direct growth toward more knowledge-based industries.

3 Manufacturing data were calculated based on unemployment insurance data provided by the BLS. These numbers may differ from those based on Dun and Bradstreet and other sources that include the self-employed.

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A County in transition

Figure 2: Job growth across Contra Costa County, 2004-2009

Sources: Walls and Associates, Dun and Bradstreet, Milken Institute.

Figure 3: income distribution across Contra Costa County, 2010

Sources: U.S. Census Bureau, Milken Institute.

Employment change 04-09

Decline

Slow growth (grew less than 20%)

Rapid growth (grew more than 20%)

Personal income

Less than 80% of Bay Area average

80% to 100% of Bay Area average

100% to 120% of Bay Area average

More than 120% of Bay Area average

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The uneven distribution of income provides another dimension of imbalance in the county. In 2009, the average personal income in Contra Costa as a whole was $36,200, slightly lower than the Bay Area average of $36,800. Orinda tops the rankings among Contra Costa cities with a per-capita income of more than $80,000, while the per-capita income of the three bottom cities was less than $25,000. In general, San Ramon, Walnut Creek, and Orinda in the southern part of the county constitute the high end of the wage spectrum, where personal income was at least 20 percent greater than the Bay Area average. Cities along the eastern and the western sections, including Richmond, Pittsburg, and Antioch, represent the lowest segment.

The contraction in traditional economic sectors, wage gaps, and imbalanced growth present challenges and opportunities. To confront the challenges, Contra Costa needs a sustainable development strategy that will increase the number of high-quality jobs, strengthen the industry base, and promote regional balance.

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InduStry StrEnGtHS

Our analysis reveals that Contra Costa has comparative advantages in knowledge-based industries such as petrochemical manufacturing, building construction, telecommunication services, biomedical manufacturing, financial services, and advanced consulting services. These industries offer a higher local concentration of employment and comparative advantages with respect to wages and productivity. Furthermore, they create broad ripple effects across the local economy. Strengths in these industries should be leveraged to further the county’s economic development.

table 2: industry strengths of Contra Costa County

Industry Component NAICS codes

Employment LQs, 2009

Employment, 2009

Employment share, 2009

Average wages (US$), 2009

Employment multiplier

Petrochemical manufacturing 3241, 3251 13.78 8,324 1.9% 91,302 6.7

Telecommunication services 517 2.16 5,552 1.2% 118,713 3.3

Building construction 236 1.44 11,321 2.5% 56,967 1.7

Financial services 52 1.38 30,636 6.8% 85,904 2.7

Advanced consulting 5413, 5415, 5416 1.27 27,378 6.1% 82,001 2.1

Biomedical research and manufacturing 3254, 3345, 541710 1.11 4,568 1.0% 98,276 3.2

Sources: Walls and Associates, Dun and Bradstreet, U.S. Census Bureau, Bureau of Economic Analysis, BLS, Milken Institute.

Petrochemical manufacturing represents a core competitive strength of Contra Costa. Historically, the county has served as a hub of petroleum refining activities in Northern California. The industry’s mature presence includes a handful of key players such as Chevron, Shell, Dow Chemical, and Tesoro. Accounting for 4.5 percent of the county’s $136 billion in total assessed valuation, Contra Costa’s refineries are also a significant generator of tax revenue.4 Petrochemical manufacturing directly employs more than 8,300 workers in the county. With a multiplier effect of almost 7, the industry has much broader impacts across the region. 5 Its ripple effects and inter-industry linkages help sustain jobs in industries such as rail and water transportation, engineering consulting, and construction in Contra Costa County.6

These enterprises form one of the largest industry clusters in the county. Cities such as Richmond, Martinez, and Pittsburg house refineries or chemical factories while San Ramon is home to Chevron’s global headquarters.

4 Lisa Vorderbrueggen, “Contra Costa County Stands to Lose Millions In Tax Revenue From Refineries,” Contra Costa Times, February 16, 2012.

5 A multiplier of 7 means that for every one job created in the petrochemical manufacturing industry, an additional six jobs are generated across all other industries.

6 Contra Costa Council, “2008 Performance Index: Major Drivers of Contra Costa County’s Economy,” 2008.

A PAtH fOrwArd

the benefits of the established industries here are not just the direct employment; they actually support a large number of sectors and clusters. we need to continue to support them

and allow them to grow.— Gary Craft, principal, Craft Consulting;

board member, Contra Costa Council

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Biomedical research and manufacturing is a vibrant industry in the Bay Area. It provides more than 4,500 jobs in Contra Costa, primarily in medical-device manufacturing and biomedical research. These Contra Costa employers account for more than 10 percent of the overall job base in the Bay Area’s pharmaceutical and medical-device manufacturing sector. Companies such as Bio-Rad have their global headquarters in the county, while firms like Fresenius USA have major manufacturing facilities there. Research-based establishments much like the Genome Institute help anchor the R&D activities in this industry. And with green technologies emerging in various sectors, companies with bioscience research capacities are transitioning to incorporate such new fields.

The telecommunications industry in Contra Costa is strong due to the presence of AT&T’s regional headquarters in San Ramon. Verizon is another major player with about 500 employees and a regional office in the county. Together, these national giants have contributed to the county’s reputation as a West Coast telecom hub. The industry, as a whole, employs more than 5,500 workers in the county.

Contra Costa has a strong, diverse financial services industry that ranges from insurance to commercial banking. Bank of America, Wells Fargo, and a number of other financial institutions are key players. Collectively, the industry is responsible for providing over 30,600 jobs in the county, constituting 7 percent of its employment base. While most are engaged in traditional banking, mortgage, and insurance services, the presence of investment banking and investment funds is limited.

Advanced consulting includes engineering, computer system design, and management consulting. It is the most knowledge-intensive segment of the professional services sector. The county has a high concentration of employment and productivity in this industry, suggesting knowledge-based industries are vital and abundant. The core of this industry is entrepreneurs and small businesses, which provide more than 80 percent of the industry’s 27,000 jobs. But big companies like Accenture and Jacobs Engineering are important as well. Their presence in Contra Costa supports the county’s knowledge base and strengthens its ties to the broader regional and national economies.

Construction is important in Contra Costa because it sustains a large number of jobs, directly and indirectly. The industry, largely driven by the health of the overall economy, has been in decline since the financial crisis of 2008. It currently employs about 11,300 workers across the county. As green materials become an essential component of the construction sector, however, this industry cluster will encounter opportunities to embrace this new development.7

Figure 4: major companies distribution across Contra Costa CountyFirms with more than 100 positions


7 Mark Fischetti, “Better Materials Could Build a Green Construction Industry,” Scientific American, September 21, 2009. http://www.scientificamerican.com/article.cfm?id=better-materials-green-construction-industry (accessed July 23, 2012).

Industry

Advanced consulting

Biomedical

Construction

Financial

Petrochemical

Telecom

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A Path forward

BrOAdEnInG BuSInESS dEvELOPmEnt And PrOmOtInG ECOnOmIC GrOwtH

The world has entered an era in which the capacity to manage, adopt, and produce knowledge and information serves as the driver of innovation and economic growth.8 To maintain its competitiveness and foster sustainable growth, Contra Costa should accelerate the diversification of its skill-based economy by targeting three principal objectives.

1) leverage existing industry strengths

and target potential synergies

Contra Costa should build on its existing industry strengths by capitalizing on potential synergies. Key industry clusters such as petrochemical manufacturing must continue to flourish to sustain the jobs they directly and indirectly generate. The county and its cities need to prioritize the development of industries with the most potential synergies with the local and regional workforce, markets, and industries.

By examining regional interdependence, local ripple effects, workforce characteristics, and growth patterns of knowledge-based industries, we identified three industry groups with the most potential synergies: bioscience/medicine, technology/engineering, and consulting/professional services. The three groups have expanded in the county over the past five years and have forged close connections with the Bay Area market and existing industries such as heavy manufacturing, construction, and telecommunications. Not only do these industry groups provide broader ripple effects across the supply chain but they also have the potential to better capitalize on the concentration of high-skilled labor.

In developing these industries, the county and its cities should give particular consideration to clean technologies. East Bay cities are home to green manufacturing and services firms such as SunPower in Richmond. A recent study9 revealed the potential of this emerging sector in the Bay Area. Given this trend, it is important for Contra Costa and its cities to integrate these technologies into its industry clusters.

8 DeVol, R. et al., “Arkansas’ Position in the Knowledge-based Economy: Prospects and Policy Options,” Milken Institute, September 2004.

9 Craft Consulting Group, “East Bay Green Economy Industry Cluster Study,” July 2008.

when one considers community and demographic changes, we expect more

demands for health-care services—not just for traditional hospitals but also related

[bio]science industries required to support and enhance the delivery of medical

services beyond traditional models.— Ken nordhoff, city manager, walnut Creek

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table 3: industries with high potential synergy

Industry/Sector Industry synergy Workforce synergyOverall employment

multiplier in Contra Costa

Employment growth in Contra Costa County,

2004-09

Bioscience/biomedical • Existing regional and local cluster in biomedical

• High concentration of health-care services and research institutions

• High concentration of health-care professionals

4.03 17%

Technology and engineering

• Existing regional IT and electronic clusters

• Potential demand from regional and local chemical manufacturing and financial sector

• High concentration of research institutions

• High concentration of engineering and science talent

2.64 9%

Management consulting and professional services

• Existing clusters

• Broad regional market

• High concentration of business degree holders

2.06 36%

2) Capitalize on underutilized resources

Underutilized resources present opportunities for fueling growth. A key underutilized resource in Contra Costa County is its technically skilled workforce. In 2010, Contra Costa County had nearly 464,000 working residents, but more than 39 percent worked outside the county, primarily in Alameda and San Francisco counties. This leakage of talent is most severe in Richmond, El Cerrito, Hercules, Orinda, and San Ramon. Residents in those cities commute to Berkeley, San Francisco, and San Jose. Our analysis shows that many Contra Costa residents who work in science, engineering, management, and mathematics may have located there for housing and quality of life considerations, but today a significant number are forced to commute to other parts of the Bay Area if they wish to continue working in higher-paying jobs. Because of this mismatch, some sectors such as science and engineering, despite growing locally, still find it challenging to retain talent in the county.

15

A Path forward

table 4: talent leakage by occupation, 2010

OccupationTalent leakage

(% of total)Job growth retention

type*

Location quotient (relative to California)

Contra Costa Bay Area

Life, physical, and social science

66 B 1.25 1.32

Architecture and engineering

62 B 1.07 1.44

Legal 58 C 0.96 1.19

Computer and mathematical

57 D 1.06 1.84

Management 53 A 1.05 1.23

Business and financial operations

51 A 1.17 1.24

Arts, design, entertainment, sports, and media

44 A 0.71 0.92

Note: A: Locally growing occupations that retained mostly local residentsB: Locally growing occupations that failed to retain local residentsC: Locally growing occupations that attracted outside residents more than retaining local residentsD: Locally declining but regionally growing

Sources: California EDD, U.S. Census Bureau (American Community Survey), Milken Institute.

Figure 5: City residents working outside Contra Costa County, 2010


Percent of working residents working outside

Less than 30%

30% to 40%

40% to 50%

50% to 60%

More than 60%

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Figure 6: Concentration of high-paying occupation holders among Contra Costa County residents, 2010

Sources: California EDD, U.S. Census Bureau, Milken Institute.

Land is another underutilized major resource in the county. Compared to San Francisco and Santa Clara County, Contra Costa has more land available, especially in the Tri-Valley and the eastern part of the county. Another advantage is affordability, as rents are relatively low in the county. Average office rents in Contra Costa cities are much lower than in East Alameda, San Francisco, San Mateo, and Santa Clara.

The county and its cities can capitalize on these competitive advantages to attract growing companies that need low-cost space for back-office, manufacturing, and R&D operations or wish to consolidate their activities. Recent examples are the University of California locating a second Lawrence Berkeley National Laboratory in Richmond, and General Electric choosing San Ramon as the site for developing a new software system.

Concentration of high-paying occupation holders

Very low concentration (LQ<0.75)

Low concentration (0.75<LQ<1)

High concentration (1<LQ<1.25)

Very high concentration (LQ<1.25)

17

A Path forward

table 5: office space availability and rent in the Bay Area, Q4 2011

Market City Total inventory

(sq. ft.) Total availability

(sq. ft.) Average asking rent ($/sq. ft.)

Vacancy rate

Western Contra Costa/Alameda

Richmond 2,504,138 648,572 2.3 26%

Berkeley 2,014,880 187,384 2.3 9%

Emeryville 4,007,327 553,011 2.5 14%

Oakland 5,512,330 760,702 2.1 14%

Central Contra Costa and Tri-Valley

Concord 6,178,669 951,515 1.8 15%

Pleasant Hill 1,198,132 89,860 2.2 8%

Walnut Creek 8,288,115 1,500,149 2.2 18%

San Ramon 9,014,657 1,289,096 1.8 14%

San Francisco 82,778,844 9,114,078 3.2 11%

San Mateo 31,186,339 4,117,849 3.2 13%

Santa Clara 58,303,039 8,241,537 2.5 14%

Source: Cassidy Turley.

3) Promote partnerships

In developing workforce and industry clusters, it is critical for local governments and public agencies in Contra Costa County to work across departments and jurisdictions and in conjunction with the private sector. Ill-coordinated efforts result in poor cost-efficiency and even failure. Partnerships across sectors and jurisdictions can also help alleviate conflicts of interest and achieve common goals. In fact, Contra Costa’s public and private sectors have formed many partnerships across various fields. Organizations such as the Contra Costa Council engage in a broad range of economic development initiatives, from participating in workforce training campaigns to providing industry development recommendations. It is important for local governments and public agencies to focus on maintaining industry strengths and to provide more opportunities for the private sector to be involved in economic development.

ACHIEvInG OBjECtIvES rEquIrES A tHrEE-PrOnGEd APPrOACHCentered on our three target areas, we propose a three-pronged economic development model to develop a more diverse, skill-based economy in Contra Costa with greater opportunities for knowledge-based businesses. The three components are workforce, industry assets/business climate, and entrepreneurship/innovation.

Workforcedevelopment

Businessclimate

improvement

Entrepreneurship/innovationfacilitation

18


A region’s workforce provides the foundation of an economy. In a knowledge-based economy, the quality of the workforce—or the supply of human capital—becomes increasingly critical for economic growth. According to Richard Crawford,10 the importance of human capital has increased as the knowledge economy has emerged, and the investment in human capital has exceeded the investment in physical capital since the 1970s.

In this report, we propose strategies to stimulate investment in human capital and address the mismatch between skills and industry needs; foster a pro-business climate through recruitment efforts, improved communication, and cost-efficient incentive packages; and create a vibrant entrepreneurial and innovative environment to reduce the reliance of Contra Costa and its cities on external resources.

In addition to providing strategies for the county as a whole, we will offer recommendations to facilitate sustainable growth in major cities and to improve the balance of economic development so that cities like Antioch and Pittsburg aren’t left behind.

FoCus 1: enhAnCe the workForCe develoPment PiPeline

to maintain and strengthen its competence in the global economy, Contra Costa needs to

strengthen its workforce development pipeline from the K-12 system to post-graduation and

vocational training so that its workforce is a better match for the knowledge-based economy.

strategy 1-1. Coordinate/broaden curriculum and tailor courses for future needs

Contra Costa County has the full range of educational resources: K-12 schools, community colleges, and four-year universities. However, a recent study found that STEM degree programs are insufficient at local institutions.11 As most of the knowledge industries rely highly on workers with STEM backgrounds, this education gap imposes significant disadvantages on the local workforce. Moreover, state budget cuts have made schools hesitant to expand program offerings. Faced with challenges in recruiting qualified workers and researchers, companies are growing keener on investing in education and training programs.

This landscape suggests that the county could introduce more public-private partnership opportunities in local schools to provide more STEM training. For example, in 2011, Shell Oil sponsored the Process Technology Program at Los Medanos College in Pittsburg to offset state budget cuts.12 Also, Chevron will provide funding to boost several STEM programs in Richmond and West Contra Costa County through its California Partnership Program. The program will distribute $1 million to nonprofits focused on facilitating and improving STEM curriculum, training, and infrastructure.13

Local industry players also have the ability to introduce real-world experiences to students through their employees. The county’s diverse industry base offers numerous opportunities for the private sector to get more involved in high schools and colleges. Collaboration among industries, public agencies, and educational institutions should be promoted to close the educational gap.

10 Richard Crawford, In the Era of Human Capital, New York: Harper Business, 1991.

11 Contra Costa Economic Partnership, “Enhancing economic vitality in Contra Costa County through higher education,” July 2010.

12 “Shell Oil Co. Donates $10,000 to Support PETC,” News@Los Medanos College, November 2011. http://www.losmedanos.edu/news/shell.asp (accessed August 13, 2012).

13 Kia Croom, “Chevron Gives $1 Million to Six Richmond Nonprofits,” The Oakland Post Online, November 30, 2011. http://content.postnewsgroup.com/?p=15043 (accessed August 13, 2012).

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A Path forward

mismatch between educated workforce and economic development needs

Contra Costa faces a mismatch between its workforce and economic development needs. It has a bigger share of residents with at least a bachelor’s degree (38 percent) than the state average (30 percent), but Santa Clara, San Francisco, and Alameda counties all have higher concentrations of employment in knowledge-based industries. In addition, Contra Costa residents tend to hold degrees in the arts, management, and education rather than in engineering and the sciences. Compared to the Bay Area, where the highest concentration of degree holders work in engineering and science, Contra Costa has further to go in developing its core competitiveness in R&D-intensive industries that typically require science, technology, engineering, and mathematics (STEM) expertise.

Figure 7: Concentration of degree holders in science and engineering and employment in knowledge-based industries, 2010

Contra Costa Bay Area (excluding Contra Costa)

Loca

tion

Quo

tient

(CA

=1.0

)

Science and engineering degree holders

Knowledge-basedindustry

1.4

0.6

0.4

00

0.2

0.8

1.0

1.2

1.0

1.2

1.0

1.3


table 6: resources for higher education in Contra Costa County

College/University City STEM degree program Vocational training program

Brandman University Walnut Creek None Education, business, health

Cal State University, East Bay Concord NoneBusiness, health care,

technology

Contra Costa College San Pablo Associates Multiple

Diablo Valley College* San Ramon, Pleasant Hill Associates Business, health care

John F. Kennedy University Pleasant Hill None Business, health care, arts

Los Medanos College* Pittsburg, Brentwood Center Associates Multiple

Saint Mary’s College Moraga B.S. Multiple

UC Davis San Ramon None Business

University of Phoenix Concord B.S. and M.S. None

University of San Francisco San Ramon B.S. and M.S. None

Sources: University websites.*indicates distinct campus sites

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strategy 1-2. enrich opportunities for extracurricular learning and training

Practical and extracurricular training are valuable complements to classroom learning. Thanks to the partnership between industry and the public sector, extracurricular programs in Contra Costa are readily available. For example, the Contra Costa Economic Partnership has been promoting and sponsoring extracurricular programs such as summer camps and science and engineering fairs. As K-12 schools encounter budget challenges, extracurricular learning becomes an even more vital component in enhancing the educational experiences of local students.

In particular, the county and its cities need to strengthen their support for education in science and mathematics. For instance, more emphasis should be given to providing students with internships at local companies. Internships, a practice that is critical to the development of human capital, offer students practical training, direction in developing career plans, and a better appreciation and understanding of the workplace. Local government, school districts, and the business community should form closer partnerships to promote internships, expand summer camps, and involve more regional players in knowledge-based industries. A short-term experience can alter the course of a student’s life.

strategy 1-3. Promote partnership among local and regional education institutions

The Bay Area has a number of world-class universities and research entities. They not only contribute to a quality workforce but also act as engines of innovation that generate new products and ideas. Contra Costa must tap into this regional strength. One approach is inter-school collaboration. Offering courses to students from other universities is a common practice in higher education. For instance, Stanford University and the University of California campuses in Berkeley and San Francisco offer exchange programs to each other’s students. Selecting top students in local high schools or community colleges to take certain courses or conduct experiments at these nearby institutions will encourage students with interest in the sciences to explore their academic potential through these world-class educational experiences. This program requires vast collaboration among local and regional institutions and the involvement of governments and even private companies for sponsorship. Once these networks are established, they will provide opportunities for students from every socioeconomic class to be exposed to advanced science education and research.

strategy 1-4. Attract regional talent

California’s first-rate universities turn out a large supply of high-quality business professionals, scientists, and engineers each year. They also serve as magnets that attract world-class companies such as Google, Cisco and HP. Combined, these companies and universities draw talent from all over the world, resulting in the Bay Area’s diverse, international talent pool. According to Saxenian (1999), international talent accounts for a significant portion of the high-tech workforce. In 1990, 29 percent of professionals in high-tech industries were foreign-born, with over 32 percent of them in the scientific and engineering occupations.14 This highly diverse talent pool, especially those in Stanford’s computer science and engineering programs, largely fueled the robust high-tech cluster in Silicon Valley.

14 Saxenian, A. “Silicon Valley’s New Immigrant Entrepreneurs,” Public Policy Institute of California, 1999.

intel international science and engineering Fair in Contra Costa

The Intel International Science and Engineering Fair (Intel ISEF) is the world’s largest pre-college celebration of science. Held annually in May, the Intel ISEF brings together over 1,500 students from more than 65 nations to compete for scholarships, tuition grants, internships, scientific field trips, and a $50,000 college scholarship.

Contra Costa businesses joined K-12 educators to establish an Intel ISEF in Contra Costa county in 2006, making it easier for local students to access the competitions. Before 2006, Contra Costa students had to travel farther to compete. Local sponsors include John Muir Health, Chevron, Dow Chemical, and the Lawrence Livermore National Laboratory.

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A Path forward

table 7: major universities in the Bay Area

Institution International students

UC Berkeley 3,712

Stanford 3,222

San Francisco State 1,564

UC Davis 1,497

University of San Francisco 1,029

Cal State, East Bay 818

UC San Francisco 134

Source: University websites.

Attracting these talents to Contra Costa will be no easy task given a dearth of high-paying job opportunities compared to San Francisco, Alameda, or Silicon Valley and the common perception of Contra Costa border cities as suburban bedroom communities. To address these challenges, the county must create more lucrative incentives for skilled workers and entrepreneurs. The county must revitalize its cities by promoting affordable housing, fighting crime, creating more dense and walkable neighborhoods, and achieving a more sustainable balance of commercial, office, and residential uses in its urban areas.

strategy 1-5. Promote job training programs

Human capital development should go beyond advanced degree-holders. Workers with less education must also be prepared to compete in a more knowledge-intensive economy. This requires a competitive education system for prospective workers and those already in the workforce. Job training targets specific skill sets typically tailored to an industry or company’s needs. Therefore, job training programs require direct interaction with industry. Going forward, the county must ensure that these programs are not only adequately supported but also within reach of all socioeconomic classes. An efficient communication channel should be established between educators and industry players so that programs are forward-looking and address the current and prospective needs of local and regional industries. In addition, the programs should be evaluated regularly.

Implementing this strategy starts with examining the existing system and understanding the challenges, followed by selectively increasing capacity and eliminating underutilized programs. A vast partnership between industry and educational institutions is necessary to ensure that the programs meet future needs. Programs such as RichmondBUILD, a strategic public-private partnership, are positioned to enhance the city’s workforce development pipeline.

FoCus 2: strenGthen industry Assets And imProve Business ClimAte

to build industry, Contra Costa must complement its business retention and attraction efforts

with a pro-business environment. the county and its cities should facilitate communication

between existing employers and the community, introduce effective recruitment initiatives,

and promote small-business programs. recruiting efforts should focus on the following criteria:

first, a candidate must have a clear motive to move to Contra Costa. Second, a candidate should

have some link to the established industry mix that can help broaden its development. third, the

benefits of introducing new firms to the county should exceed the cost of doing so.

22


strategy 2-1. streamline business services and improve the regulatory environment

A business that wishes to expand in or move to the county may need substantial information and services. Many cities in Contra Costa have a business services portal and one-stop business center to expedite the process. The county and cities need to continuously improve these efforts and monitor user feedback to improve the efficiency of their information channels. Meanwhile, local governments should collaborate with chambers of commerce and business partnerships to invent more channels for reaching out to existing employers and potential investors. These efforts should focus particularly on strategic industries such as petrochemical and biomedical manufacturing as well as strategic companies and their partners.

Adequate regulations are also essential to fostering industry growth. Local stakeholders should collaborate on developing zoning, environmental, and workforce regulations that encourage companies to expand and embrace more efficient and cleaner technologies, especially in traditional sectors such as manufacturing. A more welcoming business environment without excessive regulatory hurdles will encourage existing and potential companies to explore their opportunities in Contra Costa County.

small Businesses have Big impact on economic development

Small business is the foundation of Contra Costa’s economy. In 2009, roughly 77,500 business establishments were active in Contra Costa; most employed fewer than 100 people and generated annual sales of less than $500,000 on average. For the economy as a whole, 74 percent of jobs were with small firms.

Unlike corporate giants, small businesses usually encounter challenges in financing, marketing, and staffing, and are particularly vulnerable to market fluctuations. The county and its business community must acknowledge those challenges and commit to helping small business grow.

According to the table below, small businesses comprise a significant share of the county’s core industry segments. In fact, small businesses account for at least 97 percent of all firms in five of the county’s six core competencies. In addition to providing essential support to larger firms in the area, they constitute more than three-fourths of all construction, financial, and consulting jobs.

Contra Costa should undertake a two-pronged growth agenda for small businesses, recognizing that their growth needs differ from an AT&T or a Chevron. First, one agency should facilitate and advocate the efforts. The Small Business Development Centers of Northern California is a regional organization devoted to advancing small-business growth. Contra Costa should form a corresponding entity to syndicate the resources from the local community and the SBDC and serve as an advocate for policies and initiatives. The second dimension is the strategies and policies under all the three focuses.

table 8: small businesses in Contra Costa’s core industries

IndustryNumber of

firms with <100 employees

Small firms’ share 2009

Employee count for firms with

employees <100

Share of employment of small firms in total cluster

employment

Petrochemical manufacturing 34 73.9% 575 6.9%

Telecommunication services 455 97.2% 1,635 29.4%

Building construction 2,803 99.6% 9,057 80.0%

Financial services 4,825 99.3% 23,192 75.7%

Biomedical research and manufacturing

294 96.1% 1,990 43.6%

Advanced consulting 5,638 99.5% 22,708 82.9%


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A Path forward

strategy 2-2. Create Contra Costa Job express way

Competition for talent is common today as the economy becomes increasingly knowledge-intensive. Fighting for the best engineers and programmers is even more common in the Bay Area, where the economy is largely dependent on technologically skilled labor. To ensure that local companies have access to this talent, an effective communication mechanism is necessary.

Entities such as ContraCostaJobs.com and the East Bay Career Center attempt to match local firms with job seekers. But communication between employers and workers is still too complicated, and small firms are at a disadvantage as they compete with larger employers for talent. Contra Costa County should work with national and local job portals to create faster, easier ways for companies of all sizes to compete for talent and for skilled workers to find jobs that match their interests.

strategy 2-3. recruit high-potential candidates

Aggressive recruitment has a number of advantages. First, it shows that county officials are serious about business development, which helps win the trust of target firms. Second, officials can tailor recruitment efforts to fit local needs. Third, it supports general development goals. One drawback is the cost.

The county and its cities should create special initiatives and work with local business programs such as the Economic Development Task Force at the Contra Costa Council to identify potential candidates to recruit. Once candidates are identified, the task force should tailor local incentives to attract them.

table 9: Potential candidates tied to local companies

Potential candidate Employment size Strategic local partner

WPP (Wire and Plastic Products) Plc 153,000 Wells Fargo

KBR Inc. (formerly Kellogg Brown & Root) 57,000 Chevron

Bharat Heavy Electricals 46,274 Bio-Rad

Teva Pharmaceuticals 40,000 Kaiser Foundation Hospitals

NCR Corp. 21,500 Wells Fargo

Invensys Plc 20,357 Shell

FMC Technologies 13,500 Shell, Chevron

StarTek Inc. 8,000 AT&T

Hamon Group 1,305 Jacobs Engineering Group

Aspen Technology 1,269 Jacobs Engineering Group

Pegasystems Inc. 1,103 Kaiser Foundation Hospitals

Clean Energy Fuels 937 Shell

Bottomline Technologies 880 Kaiser Foundation Hospitals

Synchronoss Technologies 758 AT&T

BrightSource Energy Inc. 363 Chevron

Source: Bloomberg.

24


The ideal candidates would be drawn from the technology, consulting, and biomedical areas because they would most benefit from synergies with local and regional industry clusters, workforce resources, and land availability. Recruitment should also focus on strategic partners of local companies. Chevron, Shell, AT&T, Bio-Rad, Kaiser, and others have business partners across the country, many of which are in emerging industries such as bioscience and clean technologies. The decision to locate a new campus facility of Lawrence Berkeley Laboratory in Richmond demonstrates the promise of this approach.15

strategy 2-4. market existing strengths and potential synergies

Marketing makes candidates aware of the advantages that Contra Costa has to offer. Traditional marketing channels include business affairs and tourism, conferences, and television and newspaper advertisements. Websites and social media are increasingly valuable as well. Contra Costa could increase its participation in business affairs, promote business tourism at major industry hubs, and extend its online business portal to reach a broader range of candidates.

Contra Costa’s marketing should highlight the local and regional talent pool, fed by world-class universities. Human capital is one of the most important factors in any company’s location decisions. The Bay Area is a model of the mutually reinforcing relationship between talented job seekers and potential employers; abundant high-quality jobs attract talent to the Bay Area—and vice versa. This virtuous cycle is already at work in Contra Costa. Recently, General Electric announced that it will centralize its worldwide software services in the county with a new facility that will eventually employ more than 400. Previously, PMI Mortgage Insurance moved its headquarters from San Francisco to Contra Costa to shorten employee commute times and obtain direct access to the local workforce. Bay Area counties have used the talent pool to elevate the region’s reputation as a global business hotspot. Contra Costa, with its underutilized talent pool, should better utilize this competitive edge in its recruitment efforts.

strategy 2-5. improve the connectivity with regional economic centers

Their distance from the economic centers of San Francisco and Berkeley may be one reason for the dearth of knowledge-based industries in eastern cities such as Antioch and Pittsburg. These cities need better connectivity to the Greater Bay Area. Eastern cities are linked to the rest of the county and the Bay Area primarily via State Route 4. Additional transportation links should be constructed between Antioch and Walnut Creek. This connection, together with the extended BART, will form a transportation triangle that could stimulate commercial flows in that sub-region.

strategy 2-6. Promote community outreach and advocacy

Interaction and communication between the community and employers is an effective way to strengthen ties between the two, especially among the major players. Heavy manufacturing industries have been an integral part of the local economy—particularly in Richmond, Martinez, and Pittsburg. It is important to acknowledge that these businesses are citizens of the Contra Costa community and that the county’s future prosperity largely depends on a close, positive relationship among residents, governments, and businesses. To strengthen this relationship, more community outreach should be conducted. Major stakeholders should facilitate outreach and communication efforts by sponsoring workshops and seminars that bring together community leaders and local businesses to share achievements that impact the community. The county and its cities can also incorporate key business players into the public decision-making process regarding economic and community development as well as help evaluate companies’ community relationship strategies.

strategy 2-7. Promote local contracting and purchasing

Another approach to stimulate local clusters is to create a business alliance based on local companies’ common interests. One way to achieve this is through promoting local contracting and purchasing.16

15 City Manager’s Office, City of Richmond, “Lawrence Berkeley National Laboratory Selects Richmond for Second Campus,” January 23, 2012. http://www.ci.richmond.ca.us/DocumentView.aspx?DID=8154 (accessed August 6, 2012).

16 Schwartz, J. D. “Buying Local: How it Boosts the Economy,” Time, June 11, 2009. http://www.time.com/time/business/article/0,8599,1903632,00.html (accessed August 9, 2012).

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A Path forward

This strategy offers several benefits. First, it makes the flow of material and information more efficient by creating and strengthening industry clusters. Second, it keeps income and tax revenue inside the county. Third, local contracting and purchasing create more opportunities for local businesses and encourage relocation. The limitations are obvious: The county may have too few suppliers or contractors, or they may be under-qualified. In light of those benefits and limitations, the county should work closely with major local companies to study the feasibility of this approach. The county could create rewards or recognition for companies that promote local contracting and purchasing.

FoCus 3: FACilitAte entrePreneurshiP And innovAtion

Entrepreneurship and innovation capacity are critical drivers of growth within a knowledge-based

economy. Innovations can give birth to a new industry that builds up the core competitiveness of

a Silicon valley. Entrepreneurs play a critical role in the commercialization of new technologies.

to create a vibrant entrepreneurial and innovative climate in Contra Costa, the county and its

cities need to widen access to capital to startups, in particular, and enhance the infrastructure

that supports such a climate.

startups struggle in Contra Costa County

It’s a fact of business life: In California, 39 percent of startups don’t survive their first five years. In Contra Costa, that failure rate is more than 40 percent of startups in knowledge-based industries.

It’s not an insignificant number. Of the more than 11,000 companies formed in the county in 2009, 16 percent were in knowledge-based industries. That is equal to 174 knowledge-based startups per 100,000 residents—behind only Santa Clara, San Francisco, Marin, and Alameda counties.

The startup survival rate in Contra Costa ranks eighth among the Bay Area counties. While most of the region’s counties have survival rates closer to the state average, several have done a much better job at helping startups survive the early years.

table 10: startup survival rates in Bay Area

CountyStartups fail in the

first 5 yearsRank

Napa 33.1% 1

Solano 34.6% 2

Santa Clara 35.3% 3

Sonoma 38.3% 4

Santa Cruz 38.7% 5

Alameda 39.7% 6

San Mateo 40.5% 7

Contra Costa 40.6% 8

San Francisco 41.6% 9

Marin 41.9% 10

San Benito 42.4% 11

Bay Area 38.8%

Sources: Walls and Associates, Dun & Bradstreet, Milken Institute.

26


strategy 3-1. Promote startups to regional and national venture capitalists

Venture capital is vital for entrepreneurs, especially in high-tech industries. In the first quarter of 2010, venture capital investment totaled $2.4 billion in California and $4.6 billion in the U.S. The Bay Area alone absorbed more than $1.6 billion, or 67 percent of the state total. Venture capital investment increased by $230 million in 2009–2010 as financial institutions started to regain confidence in the capital markets.

An abundance of capital, however, does not guarantee an effective supply unless there is a platform for capitalists and entrepreneurs to connect. Geographically, the capital absorption in Contra Costa is fairly low, with startups in San Francisco, Santa Clara, and San Mateo drawing more attention from venture capitalists. The county must actively assist local startups with connecting to venture capitalists. One model is the Tri-Valley Innovation Expo, which brings together innovators, entrepreneurs, and investors. This event primarily serves San Ramon, Dublin, and Pleasanton. The county should work to expand the event’s influence and the list of participants from various sectors.

The county should also create a mechanism to encourage and promote entrepreneurship across target industries. A committee that includes industry veterans and investment professionals could help advance technology transfer and promote high-potential startups or innovations to investors.

strategy 3-2. strengthen and anchor regional innovation networks

The exchange and transfer of knowledge is critical to innovation and the success of a knowledge-based economy. A network that links innovators, industry, and research institutions will accelerate the transfer of information and its transformation into economically viable products.

Contra Costa can build on established networks and associations such as the Contra Costa Council and Innovation Tri-Valley to create a similar program to promote local innovation partnerships. In particular, the county should develop a reputation as a regional innovation network hub by promoting innovation forums and fairs in cities such as Richmond and San Ramon. The Lawrence Berkeley National Laboratory’s upcoming facility in Richmond will provide another valuable asset the local innovation network can leverage. The lab’s strong technology transfer framework will also provide tremendous opportunities for local companies in both traditional and emerging industries.

27

A Path forward

r&d resources: A step in the right direction

Research and development institutions—the most important local and regional innovation assets—are plentiful in the Bay Area. Notable examples include Cal State East Bay and UC Berkeley; the Department of Energy’s laboratories in Berkeley and Livermore; SRI International, a nonprofit that conducts research sponsored by businesses, private foundations, and the public sector; and units controlled by private companies such as Hewlett-Packard and Bio-Rad.

But Contra Costa itself faces a relative shortage of these R&D resources compared to Alameda, San Francisco, and Santa Clara (Silicon Valley) counties. Part of this shortage could be due to a lag in patents production. However, in January 2012, the Lawrence Berkeley National Laboratory announced that a new field station will open in Richmond in 2016 and house more than 800 scientists and engineers in bioscience and renewable energy. This facility will significantly enhance the county’s R&D capacity and could transform Richmond and the eastern part of county into an innovation hub as entrepreneurs and high-tech companies cluster around the station.

Figure 8: total patents registered, 2006-2010

Source: U.S. Patent and Trademark Office.

5,000

0

10,000

15,000

25,000

35,000

40,000

30,000

20,000

45,000

Santa Clara

San Mateo

Alameda

Contra Costa

San Francisco

Santa Cruz

SonomaMarin

Solano

San BenitoNapa

28


Figure 9: research institutions and their proximity to Contra Costa County


strategy 3-3. increase collaboration between business associations and assistance programs

Numerous organizations provide business assistance and networking services to Bay Area entrepreneurs. Organizations such as Meetup facilitate communication among entrepreneurs, while others like the Small Business Development Centers (SBDC) offer comprehensive assistance packages. The following organizations have had significant impacts in Contra Costa and the Bay Area. As more organizations are created, the list will grow. One drawback, however, is that the more organizations exist, the harder the network will be to navigate. Some of the organizations are publicly sponsored, while others are private. Some focus on staffing assistance, others on networking. To improve the efficiency of this system, the county can collaborate with the SBDC.

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A Path forward

table 11: Business associations in the east Bay

Organization Serving area Service nature

Bay Area Entrepreneur Meetup Bay Area Entrepreneurial intermediary

Business Networking International Bay Area Business services

Contra Costa Council Contra Costa Public-policy advocacy

East Bay Economic Development Alliance East Bay Public-policy advocacy

Entrepreneur Foundation Bay Area Entrepreneurial services

SCORE East Bay Business services

Silicon Valley Association of Startup Entrepreneurs Bay Area Entrepreneurial intermediary

Small Business Development Centers Northern California Business services

Women’s Initiative for Self Employment Bay Area Entrepreneurial services

Sources: Small Business Development Centers, Milken Institute.

strategy 3-4. Create incubators to support startups

Incubator programs provide supporting infrastructure and services to startup companies. Using incubators to accelerate the growth of targeted small businesses is a common practice in the United States. The Bay Area has 11 registered incubators, mostly concentrated in San Francisco, Alameda, and Santa Clara counties. While some incubators are operated solely by the private sector, a majority are public-private partnerships. In Santa Clara County, the city of San Jose has been particularly progressive. It is home to three incubators that were directly or indirectly supported by the city’s redevelopment agency. Incubators in the Bay Area provide a wide range of services to startups in many industries, and several partner with universities, corporate laboratories, and independent institutes. Almost all incubators provide networking opportunities to either facilitate the exchange of ideas or improve access to venture capitalists.

To compete with nearby counties, Contra Costa needs to create its own technology incubators. Based on a review of examples in the Bay Area, here are the key steps to creating successful incubators.

successful incubators leverage industry assets. A strong industry base provides critical synergies in human capital, customer base, and technology stocks. Incubators across the Bay Area promote companies that are in line with established local industries such as biotechnology, clean-tech and information technology. To increase the likelihood of success, Contra Costa incubators should focus on the synergies among existing industries, such as chemical, biomedical and technology services.

Public-private partnerships provide important support for incubation efforts. Successful incubators not only provide mentoring and operational services but also serve as platforms for commercialization. Involving private-sector sponsors will facilitate innovation and reduce the need for public support. Municipalities should expand funding mechanisms to support and facilitate new incubators.

Connections to research institutions are critical. According to a recent study by the Bay Area Council Economic Institute, more than 60 percent of the entrepreneurs surveyed in the Bay Area considered themselves underprivileged in access to technologies compared to well-established firms. Many Bay Area incubators have close connections to renowned research institutions. Communication between researchers and entrepreneurs and easy access to advanced laboratories can significantly accelerate innovation. Good candidates for collaboration include community colleges in the county, nearby state universities, and private institutions such as the Department of Energy’s Joint Genome Institute, Bio-Rad Laboratories, and Chevron.

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table 12: Business incubators in the Bay Area

Incubator Locations Industry R&D institution relation

Environmental Business Cluster San Jose (Santa Clara) Clean-tech San Jose State University

Gbiz.me Bay Area Multiple None

La Cocina San Francisco Food None

Molecular Medicine Research Institute

Sunnyvale (Santa Clara) BiotechMolecular Medicine Research Institute

Plug and Play Tech Center Sunnyvale (Santa Clara) ITMultiple (Stanford, MIT, Cal State, etc.)

Prescience International/San Jose BioCenter

San Jose (Santa Clara) Biotech, multipleUC Berkeley, Johnson & Johnson

QB3 Garage San Francisco, Alameda Biotech UCB, UCSF, UC Santa Cruz

Renaissance Entrepreneurship Center

San Francisco Multiple None

Sonoma Mountain Business Cluster Rohnert Park (Sonoma) Multiple None

TechBA Silicon Valley San Jose (Santa Clara) MultipleMultiple (Stanford, University of Santa Clara)

US Market Access Center San Jose (Santa Clara) Multiple San Jose State University

Sources: Haas School of Business at UC Berkeley, National Business Incubation Association.

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A Path forward

table 13: implementation actions

Focus Strategy Actions

F.1 Enhance the workforce development pipeline

S.1-1 Coordinate curriculum and tailor courses for future needs

A.1-1.1 Sponsor training programA.1-1.2 Partner with major companiesA.1-1.3 Community outreach

S.1-2 Enrich opportunities for extra-curricular learning and training

A.1-2.1 Create internship initiativesA.1-2.2 Expand science fair and competitions

S.1-3 Promote partnership among local and regional education institutions

A.1-3.1 Sponsor exchange programsA.1-3.2 Create regional education alliance

S.1-4 Attract regional talentA.1-4.1 Campus marketingA.1-4.2 Extend relocation assistance to international and regional talent

S.1-5 Promote job training programsA.1-5.1 Expand vocational training programA.1-5.2 Lobby for workforce investment funding


F2. Strengthen industry assets and improve business climate

S.2-1 Streamline business services and improve regulatory environment

A.2-1.1 Create main business portalA.2-1.2 Monitor and improve business services

S.2-2 Create Contra Costa Job Express Way A.2-2.1 Create Job Express Way

S.2-3 Recruit high-potential candidates

A.2-3.1 Create recruitment task forceA.2-3.2 Partner with real estate agencies in referral programsA.2-3.3 Develop competitive incentives

S.2-4 Market existing strengths and potential synergy

A.2-4.1 Improve Internet business portalA.2-4.2 Participate in and host business conferences and summits

S.2-5 Improve connectivity with regional economic centers

A.2-5.1 Partner with Transportation Task Force for BART extensionA.2-5.2 Improve highway system

S.2-6 Promote community outreach and communication

A.2-6.1 Participate in and sponsor workshops and seminars

S.2-7 Promote local contracting and purchasing

A.2-7.1 Prioritize local companies for public contractsA.2-7.2 Create awards and recognitions for companies promoting local contracting


F.3 Facilitate entrepreneurship and innovation

S.3-1 Promote startups to regional and national venture capitalists

A.3-1.1 Create venture capital committeeA.3-1.2 Create venture capital and startup database and forum

S.3-2 Strengthen and anchor regional innovation networks

A.3-2.1 Create innovation task forceA.3-2.2 Sponsor innovation seminarsA.3-2.3 Partner with local Chamber of Commerce to host innovation expos

S.3-3 Coordinate business association and assistance programs

A.3-3.1 Partner with SBDC to improve servicesA.3-3.2 Create awards and recognitions for best-performing programs

S.3-4 Create incubators to support startups

A.3-4.1 Create incentives for private incubators to expand in the countyA.3-4.2 Partner with local education institutions to develop incubators

33

The purpose of this sub-regional study is not to provide comprehensive economic development plans for each city in Contra Costa. In fact, unlike the county as a whole, many cities already have a detailed economic development agenda. To promote sustainable growth across the county, it is important to highlight the distinct attributes of its major cities.

The cities were chosen based on their share of county employment and their corresponding roles as the economic anchors of the county. Not only do these cities host most of the jobs in the county but their geographic location and industrial characteristics also create sub-regional economies within the county. Because of these cities’ populations and economic structure, changes in their performance have broad impacts across the county and even beyond.

Figure 10: employment in major job centers, 2009

Sources: Walls and Associates, Dun and Bradstreet.

AntioCh

Antioch’s economy is primarily driven by the services sector, business support, and health-care

services, in particular. the availability of land and relatively low business costs make the city

an ideal choice for land-intensive businesses. However, Antioch (along with Pittsburg) faces a

severe shortage of high-skilled labor, which helps explain its weak performance in knowledge-

based industries compared to the Bay Area and to Contra Costa overall. this shortcoming will

likely continue to impede the development of a more diverse economy. Antioch should focus on

developing its workforce and linking its existing industry strengths to the regional economy.

StAtEGIES fOr KEy CItIES In COntrA COStA COunty

34


Figure 11: major industries in AntiochEmployment size, concentration, and growth, 2009

Other Support Services

Outpatient Care Centers

Other Professional,Scienti�c, and Technical

Nursing CareFacilities

General Medical andSurgical Hospitals

O�ces of Dentists

O�ces of OtherHealth Practitioners

0.0

1.0

2.0

3.0

4.0

5.0

6.0

- 50 100 150 200 250

Loca

tion

quo

tien

t (CA

=1.0

)

2004-09 employment growth index (CA=100)

Navigational, measuring, electromedical, and control

Residential building construction

Lessors of real estate

Nondepository credit intermediation

Agencies, brokerages, and other insurance

Depository credit intermediation

Wired telecommunications carriers

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0 100 200 300 400 500 600 700 800

Loca

tion

quo

tien

t (CA

=1.0

)


Architectural, Engineering,and Related Services


1) work with kaiser hospitals to recruit strategic partners.

Kaiser Foundation hospitals provide more than 2,000 jobs and supply health-care services to East Contra Costa County. The Kaiser system maintains a broad network of consultants, device manufacturers, and trial contractors. The local medical cluster could be expanded by working with Kaiser to recruit its strategic partners in the biomedical manufacturing and services sector, using the lure of abundant low-cost land and potential synergies with local biomedical companies.

2) maintain and expand financial incentives.

Antioch provides financial incentives for business retention, including industrial development bonds, an equipment-only purchase program, and special-purpose taxes. In addition, the city has a state-designated Recycling Market Development Zone that provides tax credits to companies using recycled materials. Antioch should maintain these programs and identify additional funding resources. In addition to public sources such as tax credits and special districts, the city could work with foreign investors under the federal EB-5 immigrant investor program.

3) Provide planning incentives for office and business park development.

Most land in Antioch is zoned for residential purposes, and large parcels are underutilized. The city should better align its long-term planning with its economic development programs. For example, providing more easements for business parks and mix-use development—especially along Route 4 and the proposed BART extension as well as around the Kaiser medical campus— will help enhance the economic climate.

35

Stategies for Key Cities in Contra Costa County

ConCord

with a relatively strong services sector, especially in financial and telecommunication industries,

Concord is one of the largest job centers in Contra Costa. It also serves as the biomedical

industry’s local hub, in which Siemens medical Solutions is a major player. the partial closure of the

naval facility in north Concord presents critical opportunities for economic development. Concord

should look to capitalize on its current industry assets while focusing on new opportunities.

Figure 12: major industries in ConcordEmployment size, concentration, and growth, 2009

Nondepository creditIntermediation

Wired Telecommunications Carriers

Agencies, Brokerages, andOther Insurance

Residential BuildingConstruction

Navigational, Measuring,Electromedical, and Control

Depository CreditIntermediation

Lessors of Real Estate 0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

0 100 200 300 400 500 600 700 800

Loca

tion

quo

tien

t (CA

=1.0

)


Architectural, Engineering,and Related Services


1) strengthen partnerships with local and regional agencies on workforce training programs.

The city currently partners with such organizations as Mount Diablo Unified School District, Diablo Valley College, EastBay Works, and the Contra Costa Small Business Development Center on workforce development. Concord should seek new alliances with Cal State East Bay and John Muir Health to enhance training opportunities that address the needs of established clusters and emerging regional industries such as biomedical and clean technologies.

2) recruit target industries for commercial space at the naval weapons station reuse Project.

The Naval Weapons Station Reuse Project presents an invaluable opportunity for Concord to strengthen its industry base. The city should work with the Greater Concord Chamber of Commerce and local property brokers to recruit high-potential knowledge-based businesses. It should also monitor the industry mix at the project and in the city overall to ensure that developments are in line with Concord’s long-term goals.

3) Promote transit-oriented and mixed-use development around the two BArt stations.

As a major public transit system connecting the city and regional economic centers, BART is one of Concord’s most important assets. The city should continue to capitalize on this asset through promoting transit-oriented and mixed-use development around the stations to create a more livable, diverse urban environment. A more livable landscape helps to attract talent that can, in turn, vitalize the commercial and entrepreneurial climate.

36


mArtinez

the county seat, martinez is the second-largest petrochemical manufacturing center in Contra

Costa. the city is home to Shell and other plastic and petrochemical manufacturers. Interstate

680 links martinez to neighboring cities such as Benicia in Solano County, where a number of

valero refineries are located. the city’s economy is driven by its petrochemical business, with

other sectors such as construction and engineering providing services to the refineries. despite

the vitality of this asset, martinez should broaden its existing industry mix.

Figure 13: major industries in martinezEmployment size, concentration, and growth, 2009

Foundation, Structure, and Building Exterior

Building EquipmentContractors

Building FinishingContractors

Petroleum and PetroleumProducts Merchant

Highway, Street, andBridge Construction

-10.0

0.0

10.0

20.0

30.0

40.0

50.0

60.0

0 50 100 150 200 250

Loca

tion

quo

tien

t (CA

=1.0

)


Architectural Engineering, andRelated Services

Petroleum and Coal Products Manufacturing


1) Partner with shell and Contra Costa County to develop a technology district.

Martinez is planning a redevelopment project in North Pacheco that involves new business parks and incubators. The city should take this opportunity to expand its industry base by attracting more knowledge-based employers. The city should work with major stakeholders such as Shell to identify potential candidates. The city should also partner with major companies and county agencies to design business incentives and pursue enterprise zones.

2) Cooperate with major stakeholders to develop a detailed economic development plan and set

up a monitoring mechanism.

The lack of a comprehensive economic development plan may hinder growth in Martinez. The city should use its ongoing general plan update as an opportunity to design its future economic development blueprint. The Chamber of Commerce, major stakeholders, and the public should be involved. In addition, a monitoring mechanism should be adopted to facilitate implementation.

37


PittsBurG

Home to businesses such as dow Chemical, uSS-POSCO Industries, and johns manville, Pittsburg

is a prominent manufacturing center in Contra Costa. Industry assets include an enterprise zone

where business incentives are available. Pittsburg’s recent economic development plan has the

city promoting strategies that capitalize on these assets. we recommend the following measures

to further its development efforts, with emphasis on expanding its capacity for knowledge-based

industries.

Figure 14: major industries in PittsburgEmployment size, concentration, and growth, 2009

Steel Product Manufacturing

Architectural and Structural Metals Manufacturing Petroleum and Coal

Products Manufacturing

Basic Chemical Manufacturing

-50.0

0.0

50.0

100.0

150.0

200.0

250.0

60 70 80 90 100 110 120 130 140

Loca

tion

quo

tien

t (CA

=1.0

)


150


1) work with industry stakeholders to merge redevelopment and business recruitment efforts.

Pittsburg has identified six redevelopment areas. Industrial sites occupied by Dow Chemical and USS-POSCO are included in the city’s redevelopment plan. In addition, the city is seeking to expand its business incentive districts to attract emerging knowledge-based industries. These two efforts can be merged by partnering with major industry stakeholders to take advantage of their business networks in attracting desirable candidates and to better coordinate recruitment with longer-term redevelopment efforts.

2) Partner with neighboring cities such as Concord to coordinate economic development efforts.

Directly connected through BART and major transportation corridors, Pittsburg can leverage its proximity to regional economic centers such as Concord. In particular, Pittsburg can take advantage of the ripple effects produced by the Naval Weapons Station Reuse Project in Concord to boost its own economic growth. To achieve this goal, the city needs to partner with Concord to better coordinate development efforts in the two cities.

3) expand engineering and scientific education programs at los medanos College.

Los Medanos, one of three community colleges in the county, offers a diverse curriculum and certificate programs. Pittsburg can partner with the college to secure more funding to maintain this strength and to emphasize STEM, entrepreneurial-related fields, and training programs.

38


riChmond

richmond is a regional manufacturing center that is heavily dependent on its strong

petrochemical industry. However, biomedical, renewable energy, and logistics industries are

also drivers in its knowledge-based economy. One challenge richmond faces is maintaining

its strength in heavy manufacturing while fostering a more diverse industry base. But it has

an opportunity to strengthen its innovation capacity through the new local field station of the

Lawrence Berkeley national Laboratory. Promoting strategic public-private partnerships through

programs such as richmondBuild will help enhance the city’s workforce development pipeline.

Figure 15: major industries in richmond

Employment size, concentration, and growth, 2009

Pharmaceutical and Medicine Manufacturing

Navigational, Measuring, Electromedical, and Control

Scienti�c Research and Development Services

Petroleum and Coal Products Manufacturing

Petroleum and Petroleum Products Merchant

Chemical and Allied Products Merchant

Support Activities for Rail Transportation

Support Activities for Water Transportation

-30

-20

-10

0

10

20

30

40

50

60

70

0 150 250 300 350 400 450 500

Loca

tion

quo

tien

t (CA

=1.0

)


200 50 100 50 100


1) expand public/private partnerships in workforce development programs

Richmond is a model of effective and progressive workforce development programs in Contra Costa. The city should maintain this strength through expanding the role of public-private partnerships in those programs. A major element of Richmond’s workforce development program is its designated Workforce Investment Area. However, funding under Title I of the Workforce Investment Act does not provide adequate services to meet current and foreseeable workforce development needs.17 Richmond should expand its partnerships with major companies in the city to secure more funding. The city should also work with companies such as Bio-Rad and SunPower and local school districts and colleges to expand curriculum and vocational training in biotechnology and clean/green technology.

17 City of Richmond. “Workforce Investment Act Local Plan Modification Program Year 2011-12.” http://www.ci.richmond.ca.us/DocumentView.aspx?DID=5589 (accessed August 13, 2012).

39


2) work with uC san Francisco and uC Berkeley to promote local housing, employment, and

entrepreneurial opportunities.

Richmond is near one of the largest pools of educated talent in the country. Those potential recruits can help fuel economic growth if Richmond capitalizes on its location, accessible transportation, and housing costs to attract regional talent to live and work in the city.

3) introduce business parks on underhutilized land around the port to build on existing industry clusters.

The port presents tremendous opportunities for further development, with a number of refineries, solar-panel factories, and a proposed second campus of Lawrence Berkeley National Laboratory nearby. Improving infrastructure, providing financial incentives, and carving out special districts in this port-centered area could attract strategic suppliers, entrepreneurs, and technical consulting companies that would cater to the petrochemical, environmental/green technologies, and professional services industries. South San Francisco applied this strategy to capitalize on the presence of Genentech, a leading biotech company, in developing a biotech cluster.18

sAn rAmon

As the economic engine of Contra Costa, San ramon comprises a broad-based knowledge-

intensive industry mix, largely due to the Bishop ranch Business Park in the center of San ramon.

It is home to the global headquarters of Chevron and key facilities of At&t, IBm, and now GE.

San ramon should continue to capitalize on its reputation and business networks to attract

companies, which in turn will promote entrepreneurship and indigenous growth.

Figure 16: major industries in san ramon

Employment size, concentration, and growth, 2009

Management, Scienti�c, and Technical Consulting

Computer Systems Design and Related

Architectural, Engineering, and Related Services

Nondepository Credit Intermediation

O�ces of Physicians

Oil and gas

Petroleum and CoalProducts Manufacturing

Wired TelecommunicationsCarriers

-40.0

-20.0

0.0

20.0

40.0

60.0

80.0

100.0

120.0

140.0

160.0

180.0

50 100 50 100 150 200 250

Loca

tion

quo

tien

t (CA

=1.0

)


0

Sources: Walls and Associates, Dun and Bradstreet, Milken Institute

18 PriceWaterHouseCoopers, “The Bioscience Industry in South San Francisco,” 2001. http://www.ssf.net/DocumentView.aspx?DID=269 (accessed August 13, 2012).

40


1) Collaborate with Bishop ranch and its major tenants to recruit new companies.

Bishop Ranch, with its prestigious tenants, anchors a vast network representing numerous opportunities. The business park has been taking advantage of this network by encouraging current tenants to refer new lessees.19 Consistent with the city’s economic development goal, San Ramon can facilitate this effort through regular meetings with representatives of tenants and Bishop Ranch to discuss recruitment opportunities. The city can also introduce utility and tax incentives to complement the referral reward.

2) Provide incentives for property owners to convert underutilized buildings to meet the needs

of startups in emerging industries.

Organizations such as i-Gate and Innovation Tri-Valley have been promoting the clean technology industry in the Tri-Valley, which includes San Ramon. Despite its reputation as a hub for prestigious companies, San Ramon is lacking much-needed space for its clean-tech entrepreneurs. The city can promote partnerships with local property owners and provide incentives for them to convert underutilized buildings to provide more flex space.

wAlnut Creek

walnut Creek accounts for 23 percent of all business and engineering consulting jobs in the

county. the city also has a strong bioscience and medical industry, with major players such

as john muir Health, the dOE joint Genome Institute, and fresenius medical Care. with the

consolidation of the Lawrence Berkeley national Laboratory facilities, the Genome Institute may

move to the richmond area. the city should maintain close ties with the Genome Institute and

encourage local companies and entrepreneurs in accessing this newly available resource.

Figure 17: major industries in walnut CreekEmployment size, concentration, and growth, 2009

Insurance Carriers

General Medical and Surgical Hospitals


Computer Systems Design and Related

Legal Services

Architectural, Engineering, and Related Services

-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

- 50 100 150 200 250 300 350 400 450 500

Loca

ton

quot

ient

(CA

=1.0

)


Management, scienti�c, and technical consulting Management, Scienti�c, and Technical Consulting

Sources: Walls and Associates, Dun and Bradstreet, Milken Institute

19 Bishop Ranch, “Bishop Ranch launches leasing referral program,” August 29, 2011. http://www.bishopranch.com/b2b/b2b-blog/new-blogentry-4/ (accessed August 13, 2012).

41


1) revitalize business parks by fostering clusters around anchor tenants.

Some business parks in Walnut Creek have been underutilized, in particular the Shadelands facility. However as rents decline, new opportunities emerge. The city can work with the business parks to market potential synergies with current tenants and foster industry clusters around them. Doing so can target the city’s efforts in expanding firms across emerging sectors20 such as bioscience and clean technology.

2) strengthen partnership with tri-valley organizations and neighboring cities to expand innovation networks.

Located along the center of the I-680 corridor, Walnut Creek has an obvious advantage in expanding its business and innovation networks. The city can partner with Concord and Berkeley as well as Innovation Tri-Valley (which also includes San Ramon) and Brandman University to host innovation expos and conventions to build its reputation as an innovation center to attract innovators, entrepreneurs, and business investment.

20 Lance Howland, “Green company is moving to Shadelands Business Park,” Walnut Creek Patch. http://walnutcreek.patch.com/articles/green-company-is-moving-to-shadelands-business-park (accessed August 13, 2012).

43

APPEndIx: COntrA COStA InduStry PrOfILE 21

Contra Costa’s economy (excluding government) can be grouped into 12 major sectors based on the North American Industrial Classification System (NAICS), including agriculture, mining, energy, construction, manufacturing, trade, transportation, professional services, education, health care, entertainment and art, and other services. Those sectors combined generated nearly 450,000 jobs22 and over $53 billion in revenue in 2009.

Figure 18: share of sector employment and sales in Contra Costa, 2009

0% 5% 10% 15% 20% 25% 30% 35% 40%

Sales EmploymentSectors (NAICS code)

Professional services (51-56)

Trade (42, 44-45)

Health Care (62)

Entertainment, Art (71-72)

Construction (23)

Manufacturing (31-33)

Other services (81)

Education (61)

Transportation (48-49)

Mining (21)

Energy (22)

Agriculture (11)


Five of the broader industry categories—construction, manufacturing, trade, professional services, and health care—are the major drivers of Contra Costa’s economy. Each sector accounts for at least 5 percent of total employment. Combined, they generate more than 72 percent of all jobs. Trade and professional services are the largest contributors to the county’s economy, together generating over 48 percent of all jobs and 57 percent of total revenues.

A. ConstruCtion (nAiCs 23)

Residential and non-residential construction are the major components of this sector, along with a number of support industries. In 2009, more than 6,800 business establishments existed in the local construction sector, with over 30,000 workers and $5.4 billion in sales.

21 While the appendix portrays key highlights of Contra Costa’s industry profile, more detailed information (for all industries and geographies) may be provided upon request.

22 Job counts include all payroll and self-employed. Employment and sales data in the appendix, unless specified, are provided by Walls and Associates (Dun & Bradstreet). Minor adjustments have been applied to ensure compatibility with other official sources.

44


Figure 19: Construction industry concentration, 2009

0 0.5 1 1.5 2

Residential building construction

Land subdivision

Construction of buildings

Highway, street, and bridge construction

Other specialty trade contractors

Building �nishing contractors

Nonresidential building construction

Other heavy and civil engineering construction

Building equipment contractors

Foundation and other contractors

Utility system construction

Location quotient

Bay Area Contra Costa


Although the real estate crisis in 2008 took a major toll on payroll employment in the construction sector, the number of self-employed workers increased (based on the rise in registered establishments during the same period). There were 1,626 establishments in the residential construction sector in Contra Costa in 2004, and 800 were added by 2009. Because construction accounts for a significant portion of the county’s employment base, the sector’s sensitivity to business cycles has implications for overall growth in the region. However, the construction industry’s strong ties to other sectors means that strengthening linkages across industries could stimulate growth and help revitalize the construction sector. Meanwhile, governments in Contra Costa need to further promote local contracting to help their home-grown builders.

Figure 20: Construction jobs in Contra Costa, 1990-2009

0

50

100

150

200

250

300

350

400

0

5,000

10,000

19901991199219931994199519961997199819992000200120022003200420052006200720082009

15,000

20,000

25,000

30,000

35,000

40,000

45,000

IndexJobs

Payroll employment ( L ) Firm-based employment ( L )

Residential permits value Index ( R )


45

Appendix: Contra Costa Industry Profile

B. mAnuFACturinG (nAiCs 31-33)

Manufacturing makes up a smaller share of Contra Costa’s economy than it does the Bay Area’s. While manufacturing contributes over 11 percent of employment and 15 percent of total sales in Bay Area, it accounts for just 6.1 percent of the job base and 8.2 percent of total sales in Contra Costa.

Manufacturing once represented a much larger portion of the county’s economy. In 1990, over 1 in 10 jobs in the county was in a manufacturing industry: petrochemical refineries, steel and metal mills, sugar factories, and others. Over the past 20 years, outsourcing of manufacturing activities nationwide to developing countries like China has contributed to the dramatic decline in local manufacturing jobs. Today, manufacturing is responsible for only 1 in 20 jobs, with thousands of them stemming from Chevron or emerging “light” manufacturing industries such as medical devices and clean energy. Some heavy manufacturing industries, such as petroleum and steel products, have bucked the outsourcing trend. Petroleum manufacturing is the most concentrated industry in Contra Costa (with a location quotient, or LQ, over 21). In terms of LQ and employment contribution, manufacturing is a bigger presence in Contra Costa than in the rest of the Bay Area, where information technology is more concentrated.

Figure 21: manufacturing in Contra Costa and rest of Bay Area, 2009

-5

0

5

10

15

20

25

00 20 40 60 80 100100 120 140 160 180 200

Loca

tion

Quo

tient

(CA

=1.0

)


Steel ProductManufacturing fromPurchased Steel

Basic ChemicalManufacturing

Semiconductor andOther ElectronicComponentManufacturing

Petroleum and CoalProducts Manufacturing

Computer andPeripheral EquipmentManufacturing

Sugar andConfectionery ProductManufacturing

Navigational,Measuring, Electromedical,and Control InstrumentsManufacturing

Contra Costa manufacturing vs. Bay Area manufacturing

Other Leatherand Allied ProductManufacturingLQ: 6.62Growth Index:3,289


From 2004 to 2009, Contra Costa’s manufacturing employment plunged 4 percent, shedding more than 1,300 jobs.23 Its share of total employment in the county dropped 1.4 percentage points from 7.5 percent to 6.1 percent. Ten of the 16 industries that employed more than 500 in 2004 have suffered a decline, with the sharpest drop in electronics manufacturing. Manufacturing of spring products became almost extinct in Contra Costa. On the other hand, manufacturing of leather, electro-medical, and sugar products exhibited notable growth. For example, employment in leather manufacturing jumped from 29 in 2004 to 1,046 in 2009, thanks to the relocation of Mary Frances Accessories.

23 Job counts include payroll jobs and self-employed workers. There is approximately a 0.5 percent-1.0 percent discrepancy between manufacturing job numbers from the Bureau of Labor Statistics (counts only payroll jobs) and Dun & Bradstreet (counts all jobs). As stated previously, all analyses in the appendix are based on Dun & Bradstreet.


46

Clearly, today’s Contra Costa, particularly the cities of Richmond and Pittsburg, is transitioning to a more diverse, knowledge-based economy as bioscience and clean technologies emerge and grow. To continue embracing this trend, the county must build on existing assets in collaboration with key players like Chevron, Shell, Dow Chemical, Bio-Rad, SunPower, and the planned Lawrence Berkeley National Laboratory facility in Richmond.

table 14: manufacturing industries with significant growth, 2004–2009

Growing industryEmployment growth

2004-2009Growth 2004-2009

(percent)

Other leather and allied product manufacturing 1,017 3507%

Electromedical instruments manufacturing 617 22%

Sugar and confectionery product manufacturing 359 61%

Fruit and vegetable preserving and specialty food manufacturing 327 131%

Cut and sew apparel manufacturing 182 110%

Sources: Walls and Associates, Dun & Bradstreet, Milken Institute

C. trAde (nAiCs 42, 44-45)

Trade is the second-largest sector of Contra Costa’s economy. It generated 15.8 percent of all jobs and more than 24 percent of total sales in 2009. Retail accounts for about 79 percent of the sector’s employment and 69 percent of its total sales. In the rest of the Bay Area, retail accounts for less than 10 percent of trade sector employment.

The most concentrated trade industries in Contra Costa have strong ties to petroleum products, medicine, and construction. In the Bay Area, however, beverage distributors and wholesalers of electronics and professional equipment are the most concentrated trade sector.

Figure 22: trade sector in Contra Costa and Bay Area, 2009

0.000.200.400.600.801.001.201.401.60

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

LQ (Bar)Sales Share (Line)

LQ Sales share

Bay Area Top 5 Trade Industries

0.000.501.001.502.002.503.003.504.00

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

LQ (Bar)Sales Share (Line)

LQ Sales share

Contra Costa Top 5 Trade Industries

Beer, Wine,and Distilled

Alcoholic BeverageMerchant

Wholesalers

Beer, Wine, and Liquor

Stores

Electrical and Electronic

Goods Merchant

Wholesalers

Professional and

CommercialEquipment and

SuppliesMerchant

Wholesalers

Electronic Shoppingand Mail-

Order Houses

Gasoline Stations

Petroleum and Petroleum

Products Merchant

Wholesalers

Grocery Stores

Health and Personal

Care Stores

Building Material and

Supplies Dealers


47


From 2004 to 2009, the trade sector in Contra Costa enjoyed growth in employment (11 percent) and sales (13 percent), while the Bay Area’s sector saw a contraction. This contrast is largely attributable to Contra Costa’s retail industries, which grew at an annual rate of 2.8 percent—nearly three times greater than wholesale industries.

While the trade sector does not constitute the major scope of this research, its performance has significant implications for other industries. The healthy growth and resilience of the trade sector provides sustainable tax income for local governments that can fuel economic development across the county. While promoting a more diversified economy, the county and its cities should not neglect the trade sector.

d. ProFessionAl serviCes (nAiCs 51-56)

Professional services make up the largest sector of Contra Costa’s economy. About 34 percent of all jobs and 35 percent of total sales are generated by firms in this sector. There are nearly 38,000 establishments in the professional services sector, accounting for almost half of all non-government establishments in Contra Costa, with trade a distant second at 13.6 percent of all non-government establishments.

This sector can be broken into groups based on the services they provide, including information technology services, financial services, real estate and rental services, professional and scientific consulting, and support and administration services. Professional and scientific consulting is the largest employer, closely followed by support and administration and financial services. General business support, construction and real estate-related services, and information services are the heaviest components of the professional services. Combined, the five industry groups are responsible for over 37 percent of all jobs in the professional services sector.

Figure 23: major professional services industries in Contra Costa, 2009

19,407

11,045 9,061 7,629 7,272

1.21

1.36 1.331.40

1.13

-

5,000

10,000

15,000

20,000

25,000

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

Employment sizeLocation quotient Employment LQ

Other SupportServices

Management,Scienti�c, and

TechnicalConsulting

Services

Architectural,Engineering, andRelated Services

O�ces of RealEstate Agents and

Brokers

ComputerSystems Design

and RelatedServices


Contra Costa has advantages over the Bay Area in this sector. While the Bay Area’s professional services sector is heavily concentrated in information technology, service providers tend to be more diverse in Contra Costa. IT-related services in the county employ just 8 percent of those in the professional services sector. In the Bay Area overall, these companies account for 20 percent of that sector’s jobs.

48


Figure 24: Professional services in the Bay Area and Contra Costa, 2009

Bay Area Contra Costa

SoftwarePublishers

ComputerSystemsDesign

InternetServices

Scienti�cR&D

Services

DataServices

TelecomCarriers

Remediation InsuranceCarriers

BusinessSupportServices

EquipmentLeasing

0.7%

0.3%

1.2%

0.7%

0.2%

2.332.09 2.09

1.841.70

0.00

0.50

1.00

1.50

2.00

2.50

0.0%

0.2%

0.4%

0.6%

0.8%

1.0%

1.2%

1.4%Share of employment LQ

Percent LQ

1.6%

3.1%

0.6%1.1%

0.3%

3.14

2.161.95 1.85

1.55

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%Share of employment LQPercent LQ


From 2004 to 2009, employment in Contra Costa’s professional services sector grew 8 percent to over 146,000. At the sub-sector level, the picture grows more complex. While support and administration services expanded by more than 50 percent, information-intensive industries declined by 23 percent. The decline in employment in information industries such as software publishers and Internet services suggests the county’s IT companies are retreating to other parts of the Bay Area. A friendlier entrepreneurial environment, wider access to IT venture capital, and the proximity of R&D institutions in Silicon Valley and Alameda largely influenced this decline.

Figure 25: ups and downs of professional services in Contra Costa, 2004-2009

Top 10 growingindustries in the professionalsector

Top 10 decliningindustries in the professionalsector

Employment change %, 2004-2009

Other support services

Business support services

Management of companies and enterprises

Facilities support services

Other investment pools and funds

Remediation and other waste management services

Specialized design services

Other telecommunications

Sound recording industries

Commercial and industrial machinery and equipment

Computer systems design and related services

Data processing, hosting, and related services

Waste treatment and disposal

Waste collection

O�ce administrative services

Wired telecommunications carriers

Wireless telecommunications carriers (except Satellite)

Internet service providers and web search portals

Scienti�c research and development services

News syndicates, libraries, and archives

-100% -50% 0% 50%

247%

159%

94%

77%

59%

40%

31%

31%

26%

22%

-21%

-25%

-28%

-30%

-34%

-36%

-36%

-42%

-44%

-47%

100% 150% 200% 250% 300%


49


e. heAlth CAre (nAiCs 62)

Contra Costa’s health-care sector is composed largely of medical and nursing facilities, laboratories, and the offices of independent practitioners. As the third-largest sector of Contra Costa’s economy, health care is responsible for more than 11 percent of all jobs and 8 percent of total sales. Compared to the Bay Area and California as a whole, Contra Costa has a stronger concentration of nursing care facilities and medical laboratories. In fact, the number of health-care jobs in Contra Costa increased 8.6 percent from 2004 to 2009—twice as fast as the county’s employment overall—while Bay Area health-care employment faced a moderate decline during the same period.

The John Muir and Kaiser systems have hospitals and medical facilities throughout the county and contribute significantly to the local economy, particularly in Walnut Creek and Antioch. Though health-care services tend to be local in focus, supplier distribution networks inside and outside the county create much broader ripple effects. Medical research and devices manufacturing, consulting, and support services also benefit from broader networks. Given its size, this sector is critical for stabilizing the local employment base.

Figure 26: health-care services sector in Contra Costa, 2009

Nursing Care Facilities

Medical and Diagnostic Laboratories

General Medical and Surgical Hospitals

Child Day Care Services


Home Health Care Services

0.0

0.5

1.0

1.5

2.0

2.5

3.0

- 20 40 60 80 100 120 140 160 180 200

Loca

tion

quot

ient

(CA

=1.0

)



F. knowledGe-BAsed industry (kBi)

To quantify the knowledge-based economy structure, we developed a series of criteria to distinguish more knowledge-intensive industries from traditional businesses. The classification was first introduced by the Milken Institute in 200424 and further developed in this study. According to our classification, all four-digit NAICS code-level industries include 89 knowledge-based industries and 196 non-knowledge-based industries. Of the knowledge-based industries, 26 are high-tech businesses that are extremely knowledge-intensive.

24 DeVol, R., et al. “Arkansas’ Position in the Knowledge-based Economy,” Milken Institute, September 2004.

50


In 2009, Contra Costa’s knowledge-based industries contributed 112,233 jobs and more than $19 billion in sales to the economy, accounting for 25 percent of total employment and 36.3 percent of total sales. In terms of the employment and sales shares of knowledge-based industries, Contra Costa is on par with California overall but lags behind the rest of the Bay Area, where knowledge-based industries generate more than 31 percent of all jobs and 42 percent of total sales.

In the past decade, Contra Costa’s knowledge-based industries have contracted in absolute size and in share of the overall economy. Since 2004, almost 14,000 jobs in knowledge-based industries have disappeared, accounting for an 11 percent decline in KBI employment. Further, knowledge-based jobs as share of total employment declined by 4 percentage points (29 percent to 25 percent).

A similar but less severe contraction occurred in the rest of the Bay Area (minus Contra Costa). From 2004 to 2009, nearly 65,000 jobs vanished in the region’s knowledge-based industries (which represented 5 percent of KBI employment in 2004). In the same period, KBI as a share of total employment across the rest of the Bay Area dropped by about 2 percentage points (from 33 percent to 31 percent).

Management and technical consulting accounts for one of the largest employment and sales contributions of all KBI industries, followed by a number of other professional services. In addition, the county has a larger share of employment in the petroleum industry than the state average. In contrast, computer and information technology dominate the Bay Area’s knowledge-based industries. Also worth noting: While most major industries in the knowledge-based sector were facing slow growth or a moderate decline, professional equipment suppliers and insurance carriers have experienced significant growth.

Based on how much industries rely on advanced technology, the knowledge-based sector can be further divided into two components: high-tech and non-high-tech industries.

1) hiGh-teCh industries

The 26 industries within the high-tech sector contributed about 8 percent of total employment and sales in Contra Costa in 2009. In comparison, high-tech industries in the Bay Area as a whole accounted for 16 percent of total employment and more than 18 percent of total sales in the same year.

From 2004 through 2009, Contra Costa’s high-tech sector lost almost 6,900 jobs, or 15.7 percent of the sector’s total employment in 2004. In comparison, the high-tech sector in the Bay Area declined by 8.6 percent in employment, with almost 63,000 jobs lost.

Based on employment concentration, Contra Costa has key comparative advantages in a number of industries such as telecommunication, electro-medical manufacturing, and architectural-related services.

Figure 27: high-tech industry in the Bay Area, 2009

Alameda

Contra Costa Marin Napa

San Benito San Francisco

San Mateo

Santa Clara

Santa Cruz

Solano Loca

tion

quot

ient

(CA

=1.0

)

2009 employment relative to 2004 (04=100)

Hig

h Lo

w

Decline Growth

In Contraction

In Transition Star

Emerging


51


2) non-hiGh-teCh knowledGe-BAsed industries

Contra Costa’s non-high-tech, or second-tier, knowledge-based industries employed over 75,000 people and generated almost $15 billion sales in 2009—about 17 percent of employment and 28 percent of sales. In comparison, this sector in the Bay Area overall contributed 16 percent of total employment and 24 percent of total sales.

Despite an 8 percent decline in employment in 2004–2009, the second-tier KBIs significantly outperformed the high-tech sector, where the percentage of job losses was double. Likewise, the non-high-tech KBIs in the Bay Area overall also performed better than the high-tech sector, with a 2.4 percent decline in employment during the same period.

This analysis suggests that compared to the Bay Area overall, Contra Costa’s second-tier KBIs have suffered a greater contraction in employment size. However, if we expand the time horizon of the analysis, it appears that in most years from 1999 to 2009 Contra Costa performed better than Bay Area overall with the exception of 2006. In addition, the 10-year growth analysis reveals similar employment dynamics across Contra Costa’s and the Bay Area’s second-tier KBIs.

Similar to the high-tech sector, we found that second-tier KBIs of Contra Costa do not specialize in one particular sector, instead covering manufacturing and services sectors and a number of product and service lines. In contrast, Bay Area high-tech industries tend to specialize in computer science and Internet services. Seven of the Bay Area’s 10 most locally concentrated KBIs relate to finance.

Figure 28: knowledge-based industries in the Bay Area, 2009

Loca

tion

quot

ient

(CA

=1.0

) Hig

h Lo

w

2009 employment relative to 2004 (04=100)

Decline Growth

In Contraction Emerging

In Transition Star

Contra Costa

Santa Clara

Alameda

Santa Cruz

Marin

Napa

Solano

San Francisco San Francisco San Mateo

San Benito

Bubble size representsthe share of a county’semployment base


52


table 15: Classification of knowledge-based industries25

Knowledge-based Industries (KBI)*

NAICS Tier 1 (hi-tech) NAICS Tier 2 (non hi-tech KBI)

3254 Pharmaceutical and medicine manufacturing 3331 Agriculture construction and mining machinery

3333 Commercial and service industry machinery manuf. 3332 Industrial machinery manufacturing

3341 Computer and peripheral equipment manufacturing 3334 Ventilation heating air-conditioning and comm. manuf.

3342 Communications equipment manufacturing 3335 Metalworking machinery manufacturing

3343 Audio and video equipment manufacturing 3336 Engine turbine and power transmission equipment

3344 Semiconductor and other electronic component manuf. 3339 Other general purpose machinery manufacturing

3345 Navigational measuring electromedical and control inst. manuf. 3351 Electric lighting equipment manufacturing

3346 Manufacturing and reproducing magnetic and optical media 3353 Electrical equipment manufacturing

3364 Aerospace product and parts manufacturing 3359 Other electrical equipment and component manuf.

3391 Medical equipment and supplies manufacturing 3361 Motor vehicle manufacturing

5112 Software publishers 3362 Motor vehicle body and trailer manufacturing

5121 Motion picture and video industries 3363 Motor vehicle parts manufacturing

5171 Wired telecommunications carriers 4234 Professional, commercial equipment and supplies merchant wholesalers

5172 Wireless telecommunications carriers (except sat.) 4237 Hardware, plumbing, heating equipment and supplies merchant wholesalers

5173 Telecommunications resellers 4242 Drugs and druggists’ sundries merchant

5174 Satellite telecommunications 4246 Chemical and allied products merchant wholesalers

5175 Cable and other program distribution 4821 Rail transportation

5179 Other telecommunications 4831 Deep sea, coastal, and Great Lakes water transportation

5181 Internet service providers and web search portal 4861 Pipeline transportation of crude oil

5182 Data processing hosting and related services 4862 Pipeline transportation of natural gas

5191 Other information services 4869 Other pipeline transportation

5413 Architectural engineering and related services 4883 Support activities for water transportation

5415 Computer systems design and related services 4885 Freight transportation arrangement

5417 Scientific research and development services 4889 Other support activities for transportation

6215 Medical and diagnostic laboratories 5151 Radio and television broadcasting

9271 Space research & technology 5152 Cable and other subscription programming

NAICS Tier 2 (non hi-tech KBI) 5161 Internet publishing and broadcasting

2131 Support activities for mining 5211 Monetary authorities - central bank

2211 Electric power generation transmission and distribution 5221 Depository credit intermediation

2212 Natural gas distribution 5222 Nondepository credit intermediation

2360 Construction of buildings 5223 Activities related to credit intermediation

3221 Pulp paper and paperboard mills 5231 Securities and commodity contracts intermediation

3241 Petroleum and coal products manufacturing 5232 Securities and commodity exchanges

3251 Basic chemical manufacturing 5239 Other financial investment activities

3252 Resin synthetic rubber and artificial synthetic fibers 5241 Insurance carriers

3253 Pesticide fertilizer and other agricultural chem. manuf. 5242 Agencies brokerages and other insurance related

3255 Paint coating and adhesive manufacturing 5251 Insurance and employee benefit funds

3259 Other chemical product and preparation manufacturing 5259 Other investment pools and funds

3311 Iron and steel mills and ferroalloy manufacturing 5331 Lessors of nonfinancial intangible assets (except copyrighted works)

3312 Steel product manufacturing from purchased steel 5411 Legal services

3315 Foundries 5416 Management scientific and technical consulting

3321 Forging and stamping 5511 Management of companies and enterprises

3325 Hardware manufacturing 5611 Office administrative services

3327 Machine shops, turned product, and screw, nut, and bolt manuf. 5612 Facilities support services

3329 Other fabricated metal product manufacturing 6211 Offices of physicians

* Definition is based on 4-digit NAICS code industry classification.

25 Ibid

53


table 16: Contra Costa County industry snapshot (by employment)

10 largest industries in Contra Costa County Employment 2009

Other support services 19,407

Elementary and secondary schools 17,724

Full-service restaurants 16,753

Management, scientific, and technical consulting services 11,045

Grocery stores 10,932

General medical and surgical hospitals 10,386

Architectural, engineering, and related services 9,061

Residential building construction 8,391

Offices of physicians 8,044

Nursing care facilities 7,785

10 most concentrated industries in Contra Costa County Location quotient 2009

Petroleum and coal products manufacturing 21.4

Oil and gas extraction 14.9

Steel product manufacturing from purchased steel 7.6

Sugar and confectionery product manufacturing 4.0

Support activities for rail transportation 3.8

Basic chemical manufacturing 3.7

Nursing care facilities 2.4

Petroleum and petroleum products merchant wholesalers 2.3

Wired telecommunications carriers 2.3

Remediation and other waste management services 2.1

Sources: Walls and Associates, Dun & Bradstreet, Milken Institute

table 17: Contra Costa County industry snapshot (by average wage)

10 highest paid industries in Contra Costa County Average wages (US$) 2009

Other financial investment activities 135,256

Management of companies and enterprises 132,679

Scientific research and development services 129,018

Agents and managers for public figures 127,875

Wireless telecommunications carriers (except satellite) 118,713

Securities and commodity contracts intermediation and brokerage 111,318

Electric power generation, transmission and distribution 109,248

Software publishers 108,600

Data processing, hosting, and related services 101,805

Offices of physicians 99,673


54


table 18: Growing and declining industries in Contra Costa CountyBased on changes in employment

Top Growing 1990-1999 2000-2009

1 Management, scientific, and technical consulting Other support services

2 Full-service restaurants Nursing care facilities

3 Computer systems design and related Other financial investment activities

4 Offices of physicians Gasoline stations

5 Grocery stores Justice, public order, and safety

6 Office administrative services Residential building construction

7 Postal service Oil and gas extraction

8 Legal services Other amusement and recreation industries

9 Wired telecommunications carriers Limited-service eating places

10 Investigation and security services Lessors of real estate

Bottom declining 1990-1999 2000-2009

1 Sugar and confectionery product manufacturing Wired telecommunications carriers

2 Basic chemical manufacturing Management, scientific, and technical consulting

3 Clothing stores Full-service restaurants

4 Electronics and appliance stores Activities related to credit intermediation

5 Warehousing and storage Office administrative services

6 Agencies, brokerages, and other insurance Agencies, brokerages, and other insurance

7 Depository credit intermediation Scientific research and development services

8 Executive, legislative, and other general Data processing, hosting, and related

9 Navigational, measuring, electromedical, and control Home health care services

10 National security and international affairs Basic chemical manufacturing

LegendManufacturing

Services & others


55

Armen Bedroussian is a senior economist at the Milken Institute. His work focuses on regional industry dynamics, economic impact analysis, and forecasting of regional and macroeconomic trends. His contributions to many of the Institute’s research projects and publications have provided useful benchmarking tools to business and policy leaders. Bedroussian has co-authored numerous studies, including the annual Best-Performing Cities index, and was directly involved in the groundbreaking research contained in “An Unhealthy America: The Economic Burden of Chronic Disease” and “Mind to Market: A Global Analysis of University Biotechnology Transfer and Commercialization.” His recent work includes “The Global Biomedical Industry: Preserving U.S. Leadership,” “Jobs for America: Investments and Policies for Economic Growth and Competitiveness,” and “North America’s High-Tech Economy.” Before joining the Institute, Bedroussian was an economics teaching assistant in micro- and macroeconomics at the University of California, Riverside, where he received a bachelor’s degree in applied mathematics and a master’s degree in economics.

kevin klowden is director of the California Center at the Milken Institute, where he also serves as managing economist in the research group. He specializes in the study of demographic and spatial factors (the distribution of resources, business locations, and labor), how these are influenced by public policy, and how they in turn affect regional economies. Klowden has addressed the role of technology-based development in publications such as “North America’s High-Tech Economy” and in location-specific studies on Arkansas and Arizona. In addition, he oversaw the year-long Los Angeles Economy project, which examined key workforce and economic development issues in Los Angeles. Klowden was the lead author of “Film Flight: Lost Production and Its Economic Impact in California” and “The Writers’ Strike of 2007–2008: The Economic Impact of Digital Distribution,” both of which analyze the changing dynamics of the entertainment industry. He has also written on the role of transportation infrastructure in economic growth and job creation in reports such as “California’s Highway Infrastructure: Traffic’s Looming Cost” and “Jobs for America: Investments and Policies for Economic Growth and Competitiveness,” as well as in several publications including the Wall Street Journal. Klowden earned an M.A. in economic geography from the University of Chicago and an M.S. in politics of the world economy from the London School of Economics.

i-ling shen is a senior research analyst at the Milken Institute. She specializes in population economics, economic growth, and inequality. Her research has been published in the Journal of Economic Inequality, Economic Inquiry, and various working paper series at the Bank of Italy, the Center for Economic Policy Research (CEPR), and the Institute for the Study of Labor (IZA). Her work was cited in United Nations’ “Human Development Report 2009” and was widely covered by media in the U.S. and Europe. She is an IZA research fellow and a research associate with the Catholic University of Louvain (UCL), and she was formerly a Marie Curie post-doctoral fellow at the University of Geneva. She received her Ph.D. and M.A. in economics from UCL, a master’s degree in public policy from the University of California, Los Angeles, and a bachelor’s in business administration from National Taiwan University.

haoran zhu is a former research analyst at the Milken Institute. His research interests are industrial and economic development, the real estate market and investment, and China’s macroeconomic policies and capital market. Since 2008, Zhu has engaged in several research projects addressing urban issues in China funded by the National Natural Science Foundation of China. Research pieces with Zhu as the lead author have appeared in well-known academic journals and recently published books in China. Zhu received a master’s degree in planning from the University of Southern California in 2011. He also holds a bachelor’s degree in economics and a bachelor’s in engineering in urban planning, both from Peking University.

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