A Closer Look at Economic Opportunity in Rural California John Melville Collaborative Economics.
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Transcript of A Closer Look at Economic Opportunity in Rural California John Melville Collaborative Economics.
A Closer Look at Economic Opportunity in Rural California
John Melville
Collaborative Economics
Overview
• California Regional Economies Project
• Clusters of Opportunity– Health Services– Regional Experience
• Rural Entrepreneurship—Initial Findings
0.7%
3.2%
4.8%
-0.2%
-1.2%-6.4%
4.4%
9.2%
4.8%
1.9%
1.5%
-8.0% -3.0% 2.0% 7.0% 12.0%
Sierra
Valley
N. Sacramento
Sacramento
Border
N. California
Coast
SoCal
California
U.S.
Bay Area
(Percent Change in Total Job Growth, 2000-2003)
A State of Regional Economies
Clusters of Opportunity
ExportOriented
PopulationDriven
CareerPotential
Clusterof
Opportunity
Bridging Workforce and Economic Development Goals
WorkforceDevelopment
Cluster ofOpportunity
Economic Development
Rural Health Services Cluster
Major Export/ Pop. Driven
Support Sectors
Local Infrastructure
Hospitals
Medical Equipment and Supplies
Medical Diagnostic Laboratories
Home Health and Residential Nursing
Care
WIBs, Community & Technical Colleges,
Universities
Biomedical: Biotechnology and
Bioengineering
R&DVenture Capital
Federal and State funding
Offices of Health Practitioners:
Dentists, Physicians and Other
Other Health Services:
Ambulatory, Emergency and
Vocational Rehab.
A Growing Cluster in Every Region
36,875
3,898
16,911
21,429
100,965
0.0
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
Average Annual Growth Rate (1990-2002)
San Joaquin Valley
Central Coast
Northern Sacramento Valley
Northern California
Central Sierra
Size (2002), Concentration relative to CA (2002) and Growth Rate of Urban Health Care Cluster (1990-2002
Portfolio of Regional Health Care Clusters for California's Rural Areas
Em
ploy
men
t Con
cent
rati
on (
CA
Ave
rage
1.0
)
Health Services Hospital Care
Clinicians Home Health
Opportunities in Health Convergence
Health SciencesMedicine Pharmacy Biology
Bio-pharmaMedical DevicesClinical TrialsTele-medicineHealth policy
Health Care Career Potential
High 31%
Med 44%
Low 25%
Occupational Level
Leveraging The Rural Experience
Regional Quality of Place Infrastructure
Residential Infrastructure
• Home construction• Architectural services• Services to buildings/dwellings
• Maintenance
Global ConnectionsInfrastructure
• Telecommunications• Travel Arrangements• Air transportation• Business support services
Community Infrastructure
• Heavy construction• Utilities/public transit systems/waste mgt
• Accommodations• Civic/social organizations
Distinctive, Regional Quality of Life Experience
Natural Places History, Culture
Education
Specialty Food,
Beverages, Retail
Leisure
• Sightseeing• Tours• Recreation• Camping
• Museums• Art galleries• Live events• Educational (ag-tourism)
• Full service restaurants
• Wineries• Specialized retail
• Amusements• Gambling• Golf• Spectator sports
Long-term, Recent, & Potential Residents Current & Potential Visitors
The Progression of Economic Value
ExtractCommodities
Make Goods
DeliverServices
StageExperiences
Differentiated
Undifferentiated
Relevant to
Irrelevant to
Market Premium
Customization
Customization
Commoditization
Commoditization
CompetitivePosition
Needs ofCustomers
Source: Pine and Gilmore, 1999, p.72.
Value Chain Linking Goods, Services, and Experiences
Assets Goods Services Experiences
Natural Film, sunscreenEquipment rentals
Tours, educational programs
Historic Souvenirs Historic lodging Interactive sites, museums
Cultural Regional crafts Regional cuisine Festivals, performing arts
From Commodities to Experiences
Commodities Goods Services ExperiencesGrapes Wine Wine clubs Tasting rooms/tours
Packaging/shipping
Food and wine events
Vacation packages
Educational programs
Estimated 30% of Rural Job Growth From Leveraging Rural Experience
107,649
16,757
37,495
35,955
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0%
Central Coast
Northern Sacramento Valley
Central Sierra
Northern California
X-Axis = AAGR 1994-2002
Portfolio of California's Regional Experience Employment by Region, 1994-2002
Em
plo
yme
nt
Co
nc
en
tra
tio
n:
US
=
1.0
Size (2002), Concentration relative to the U.S. (2002) and AAGR of the Regional Experience Clusters (1994-2002)
Limited Career Potential in Some Areas . . .
Quality of Life Experience Occupational Distribution
36,900
160,440
340,970
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
0% 20% 40% 60% 80% 100%
High-Level Mid-Level Entry-Level
Quality of Life Experience Occupational Clusters:Employment Size, Share of Cluster, and Wage Level
Source: California Employment Development Department, US Bureau of Labor Statistics
. . . But Better Potential in Other Areas
Quality of Place Infrastructure Occupational Distribution
543,550
1,288,730
713,280
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
0% 10% 20% 30% 40% 50% 60%
High-Level Mid-Level Entry-Level
Infrastructure Occupational Clusters:Employment Size, Share of Cluster, and Wage Level
Source: California Employment Development Department, US Bureau of Labor Statistics
The Key is Rural Entrepreneurship
• Total number of firms in rural California has grown by more than 20,000 since 1990 thanks to entrepreneurship
• Firms created in just the last few years now account for much of today’s rural California economies
• Headquarters operations account for most of total firms and employ most people in rural California
Rural California Full of Young Firms
Age of firms operating in rural California
40%
20%
40%
1990 and before
1996 through 1991
2002 through 1997
90% of Rural Firms are Headquarters
Firm distribution, according to ownership
90%
10%
HQ/IndependentBranch
Rural Headquarters Are Biggest Employer
Jobs, distributed by firm ownership
68%
32%
HQ/Independent
Branch
Rural Firms Stay Put
Firm Movement
97%
3%
Never moved between counties
Moved into or out of county
Targeting entrepreneurship in the Sacramento Valley
Habitat
Potential
Firms
People
Self-employment is growing faster than wage and salary employment
0.8
0.9
1
1.1
1.2
1.3
1.4
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
Wage and salary employment
Non-farm self-employment
Indexed regional farm and non-farm self-employment compared with total wage and salary jobs in the Sacramento Valley Region, 1990 - 2002
Source: US Bureau of Economic Analysis
Firm creation and closure responsible for most “churn” in regional economy
139,181 firms created (1989-2002)
109,589 firms closed (1989-2002)
11,406 firms relocated or expanded into region (1989-2002)
6,448 firms moved out of the region (1989-2002)
15,526 firms moved within the Sacramento Valley from 1989-2002
Most new jobs are from new firms
New Jobs from new firms68%
New jobs from firm relocations/expansions into
region22%
New jobs from existing firms10%
Distribution of Job Creation Within the Sacramento Valley, 1989-2002
Jobs created by new firms comparable to those of existing and relocating firms
$-
$20,000
$40,000
$60,000
$80,000
$100,000
$120,000
$140,000
$160,000
$180,000
$200,000
Operations of Outside Firms that Relocated or Expanded into the Valley Firms that Started in the Sacramento Valley
Firms that existed in the Sacramento Valley pre-1989 Headquarters that moved into the Sacramento Valley since 1990
To Find Out More . . .
• Health Services and Regional Experience Cluster Papers– California Regional Economies Project (
www.labor.ca.gov/panel/espcrepindex)
• Entrepreneurial Sacramento Valley– Great Valley Center (www.greatvalley.org)
• Stay Tuned: Patterns of Rural Entrepreneurship Paper, Clusters of Opportunity User Guide/Training