Green Technology Report1 (5)

8/3/2019 Green Technology Report1 (5)

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Jobs in L.A.

Green Technolog

Secto20

Prepared for tDepartment of Water and Pow

and the Workforce Investment Boa

of the City of Los Ange

ECONOM

ROUNDTABA Nonprofit, Public Policy Research Organizat


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Jobs in L.A.sGreen Technology Sector

January 2006

Prepared for theDepartment of Water and Power

and the Workforce Investment Boardof the City of Los Angelesthrough a contract with the

Milken Institute

Patrick BurnsDaniel Flaming

ECONOMIC ROUNDTABLEA Nonprofit, Public Policy Research Organization

315 West Ninth Street, Suite 1209, Los Angeles, California 90015www.economicrt.org


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Background of this ResearchThe Economic Roundtable was requested to investigate jobs in Los Angeles Green Technologysector in the fall of 2005, as an addition to research done for the Los Angeles Economy Project(publicly released December 2005). This research was underwritten by two branches of the Cityof Los Angeles: The Department of Water and Power (DWP) and the Workforce Investment

Board (WIB). Both the DWP and the WIB share an interest in expanding work opportunities inliving-wage industries and occupations in the citys economy. Further, both are interested inseeing Los Angeles become a center of production for green goods and services, providingrenewable or less-polluting sources of energy, as well as technologies that help reduce pollutantsfrom the existing economic base, transportation infrastructure, and residential communities.Growth in this segment of the economy would enable Los Angeles to improve its environmentalquality, achieve job growth and gain competitive advantage in the Green Technology sector.

This report has been prepared by the Economic Roundtable,which assumes all responsibility for its contents. Data,

interpretations and conclusions contained in this report are notnecessarily those of the Department of Water and Power, the

Workforce Investment Board, or the City of Los Angeles.

This report can be downloaded from the

Economic Roundtable web site:

www.economicrt.org


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Table of Contents

EXECUTIVE SUMMARY .................................................................................................1

1. JOBS IN LOS ANGELES GREEN TECHNOLOGY SECTOR...................................3Overview........................................................................................................................3

Key Policy Questions.....................................................................................................3

Groundwork for Creating a Green Technology Strategy...............................................4Identifying Green Technology Businesses ....................................................................4

Geography of Los Angeles Green Technology Businesses........................................10

2. IDENTIFYING AND ANALYZING GREEN TECHNOLOGY INDUSTRIES.........13

Industry Characteristics of Green Technology ............................................................16

Summary of Findings about Green Technology Industries.........................................18

3. RIPPLE-EFFECTS OF GREEN TECHNOLOGY INDUSTRIES IN LOS

ANGELES ECONOMY ..............................................................................................21

Three Case-Studies of Industry Supply Links .............................................................25Highlights of Analyzing the Ripple-Effects of Los Angeles Green

Technology Industries..................................................................................................28

4. OCCUPATIONS USED IN GREEN TECHNOLOGY INDUSTRIES AND JOB

OPPORTUNITIES FOR L.A. RESIDENTS ................................................................29

Skill Profiles for Two Case-Study Occupations..........................................................32

Ethnic Distribution of Workers in Green Technology.................................................33Highlights of Green Technology Occupations ............................................................34

5. GREEN TECHNOLOGY TARGET INDUSTRIES THAT PROVIDE THEGREATEST ECONOMIC BENEFIT...........................................................................35

Highlights of Green Technology Target Industries that Provide the GreatestEconomic Benefit.........................................................................................................38

6. PUBLIC POLICY RECOMMENDATIONS ................................................................39

7. IMPORTANT REMAINING QUESTIONS .................................................................41

APPENDIX........................................................................................................................43


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List of Tables and Figures

Tables

1 Number and Grouping of Green Technology Businesses in Los Angeles .................52 Industrial Classification of Green Technology Businesses in

Los Angeles County..................................................................................................13

3 Economic Data Used to Identify Initial Targets among Industries Capturing

Los Angeles' Green Technology Sector....................................................................354 17 Most Promising Industries with Green Activity ..................................................36A Cross-Tab of Green Technology Vendors in Los Angeles

County by 6-Digit NAICS ........................................................................................43

B Top 15 Los Angeles Co. Industries by Green Technology Employment, 2002 .......47

Figures

1 Geography of Los Angeles County Green Technology Vendors .............................11

2 Location Quotient for Industries Capturing Green Technology Businesses ............143 Top 15 Los Angeles Co. Industries by Green Technology Employment .................164 Employment, Wage and Job Change Data for the Industries that Capture Los

Angeles' Green Technology Sector...........................................................................17

5 Output and Value Added by L.A. City Industries with Green TechnologyComponents, 2002 ....................................................................................................21

6 Employee and Owner Compensation as a Percent of Value Added in L.A. ............22

7 Total Output per Worker by Industry, Los Angeles County 2001 ...........................23

8 Regional Purchase Coefficients by Industry, Los Angeles County 2001.................249 Input Commodities for the L.A. County Residential Repair and Maintenance

Industry, 2002 ...........................................................................................................25

10 Input Commodities for the L.A. County Electrical and Signal Testing InstrumentsIndustry, 2002 ...........................................................................................................26

11 Input Commodities for the L.A. County Environmental and Technical Consulting

Industry, 2002 ...........................................................................................................2712 Los Angeles' Most Numerous Green Technology Occupations, 2002.....................29

13 Wages of the Largest Occupations in L.A.'s Green Technology Industries, 2005 ...30

14 Training Time Required for L.A.'s Largest Occupations in Green TechnologyIndustries, 2005.........................................................................................................31

15 Skills Required for Refuse and Recyclable Material Collectors ..............................32

16 Skills Required for General Maintenance and Repair Workers................................32

17 Ethnicity of L.A. City Residents Employed in the Largest Green Technology

Occupations...............................................................................................................3318 Promising Industries with Green Technology Activity ............................................37


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1

Executive Summary

Los Angeles has unrealized opportunities to become a growing provider of green goodsand services, and through this growth to create decent jobs that benefit all residents of thecity. To realize these opportunities Los Angeles has to make up lost ground because,compared to the U.S. economy, it has a below-average share of jobs in every significantgreen technology industry. Strengths that Los Angeles can build on include:

A large diverse economy with significant strengths in many green technologyindustries.

Ambitious environmental goals and the need for innovative technologies toachieve those goals.

A growing consumer market for green products and services.

Significant public sector requirements for green products and services.

Exceptional intellectual assets in local universities and research institutions.

Los Angeles green technology industries were identified and analyzed to identifypromising targets for growth and job creation. Three filtering criteria were used toidentify industries with:

500 or more jobs in the City of Los Angeles

Stable or growing employment

Average monthly wages in 2002 of $2,500 or more

Seventeen promising green technology industries in the city that meet these criteria arelisted below. This initial list of target industries represents the most promising

commercial components of L.A.s green technology sector and is recommended as astarting point for a public economic development strategy. The criteria used to identifythese industries should continue to be used flexibly and to be informed both by hard dataand specific opportunities in crafting and implementing a broad, multi-targeted approachto creating green technology jobs. This broad array of industry targets avoids a made-or-break strategy that hinges on the success or failure of a single target, and also takesadvantage of many strengths in the regions large and diversified economy.

Utilities

Water & Sewage SystemsConstruction

Residential Building Construction

Building Equipment Contractors Building Finishing Contractors

Nondurable Manufacturing

Petroleum Product Recycling

Cleaning Compound ManufacturingDurable Manufacturing

HVAC Equipment Manufacturing

Other Electrical Equip Manufacturing

Wholesale

Misc. Durable Goods Wholesaling

Wholesale ElectronicsProfessional Services

Legal Services Architecture & Engineering

Computer Systems Design

Scientific & Technical Consulting

Scientific Research & DesignWaste Management

Waste Collection

Remediation & Waste Management


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2 Jobs in L.A.s Green Energy Technology Sector

This first phase of research into jobs in L.A.s green technology sector provides the basisfor recommending the following eight actions by the city:

1. Adopt goals for green technology in L.A that include: Creating new jobs for city residents that include career paths out of the low-wage

consumer services sector (retail, restaurants, housekeeping, landscaping, etc.) intoliving-wage jobs in the green technology sector.

Ensure equitable access to opportunities for all residents of Los Angeles.

2. Build connections between Los Angeles green technology industries and markets fortheir goods and services:

Meet with green technology business leaders to learn about their plans, needs,priorities, and suggestions for public assistance.

Provide opportunities for local businesses in green technology industries to learnabout public sector needs for green products and services.

Where possible give local preference or require local content for public purchasesof green products and services.

3. Promote the greening of Los Angeles, including energy and resource conservation,sustainable transportation, green architecture, recycling, waste reduction, andpollution prevention.

4. Identify how Los Angeles job training, economic development and businessassistance programs can be used to support the growth of green technologybusinesses.

5. Ensure that workers of all ethnicities have fair opportunities to compete for higher-paying green technology occupations that require specialized skills.

6. Investigate opportunities for economic growth in industries that provide importantgreen technology inputs but are under-represented in the local economy. Thisincludes upstream suppliers of green technology industries identified in this reportas well as suppliers identified through further research and implementation activities.

7. Strengthen links between L.A.s research universities and green technology industriesto increase technology transfer, consulting assistance, and business start-ups.

8. Strengthen Los Angeles capacity to support the growth of green technologybusinesses by investigating critical unanswered questions about this sector of theeconomy. This report begins to build a foundation for a cutting-edge public initiativeto link green technology and targeted economic development. Many questions aboutgreen technology have yet to be answered and Los Angeles is challenged to buildlocal institutions capable of implementing strategy-driven, targeted economicdevelopment initiatives.


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3

Section 1: Jobs in L.A.s Green Technology Sector

Overview

Los Angeles has been a path breaker in setting increasingly ambitious environmental

goals and introducing innovative technologies to achieve those goals. The City

commissioned this study to investigate the job opportunities that would result frombecoming a center of production for green goods and services that provide renewable

or less-polluting sources of energy, and help reduce pollutants from our existingeconomic base, transportation infrastructure, and residential communities. The objective

is to spur job growth and build competitive strength in the Green Technology Sector,

thereby capturing some of the economic benefits from environmental markets that L.A.has helped create.

Key Policy Questions

Can the business establishments that generate green products and services, as well as the

manufacturers and service providers that supply them, expand in Los Angeles to creategood paying jobs that benefit local residents equitably? The answer to this broad

question rests on answers to several smaller questions:

How many businesses with environmentally linked activities already operate in

the L.A. region?

Is the green technology sector expanding?

How many of their suppliers are locate here?

Which suppliers benefit most from growth in this industry?

What types of jobs does the green technology sector provide?

What types of skills are necessary to work in this sector?

Can entry-level workers find job opportunities in this sector?

These questions address the potential contributions of green technology to the second and

third pillars of environmental sustainability: economically beneficial industrial growth

and socially equitable job growth for L.A. residents including residents struggling tosupport their families.

1Ideally, green technology in L.A. will also contribute to the first

pillar of sustainable development - environmental sustainability, however the issue of

environmental impacts from environmentally linked businesses is outside the scope ofthis study.

1 The concept of three pillars of sustainable development is attributable to the Brundtland Commission,

which stated: "Humanity has the ability to make development sustainableto ensure that it meets the needs

of the present without compromising the ability of future generations to meet their own needs." We are

indebted to USC Professor Jennifer Wolch for her analysis of the intellectual history of the environmentalsustainability movement.


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Groundwork for Creating a Green Technology Strategy

This report lays the groundwork for an economic development strategy for Los Angelesgreen technology sector. It details the types of green technology industries andoccupations currently in L.A., and the economic impacts that would occur if this sectorgrows. The research conducted to create this report included the following steps:

1. Identifying green technology businesses using DWP business lists and othersources.

2. Identifying the industries that green technology businesses are part of, andanalyzing those industries

3. Identifying the ripple-effects that green technology industries have on otherindustries in L.A.s economy.

4. Identifying occupations used in green technology industries and job opportunitiesfor L.A. residents.

5. Applying filtering criteria to identify target industries in the green technologysector that provide the greatest economic benefits.

6. Formulating initial public policy recommendations.

7. Identifying critical unanswered questions.

Identifying Green Technology Businesses

How many businesses providing green technology goods and services are located in theCity of Los Angeles and surrounding Los Angeles County? Our search carried out inSeptember 2005 yielded a list of almost 300 of these establishments operating locally, or0.08 percent of the all wage and salary establishments in the countys economy.2 Fortypercent of the countys green technology establishments were located in the City of LosAngeles. The list of green technology establishments was compiled from business

directories, Internet searches, newspaper articles, and existing lists from L.A.sDepartment of Water and Power and the California Energy Commission.

2 The California Employment Development Department reported that there were 373,898 establishments inLos Angeles County during the 1st Quarter of 2005. These Quarterly Census of Employment & Wages(ES202) data cover only employers enrolled in the Unemployment Insurance Program, and exclude self-employed persons.


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Economic Roundtable 5

What kinds of services and products do these Los Angeles-based green technologyestablishments provide? Each of the almost 300 green energy technology establishmentswas assigned to one of eleven different categories in order to identify functional

groupings within this sector of the economy. The largest number of establishments is inthe Solar Power category (92), followed by the Environmental Consulting category (75).The functional breakout of green technology businesses is show in Table 1:

Table 1: Number and Grouping of Green Technology Businesses in Los Angeles

Type of Green BusinessCity of Los

AngelesBalance of LosAngeles County

Los AngelesCounty Total

1. Alternative Fuel Vehicles 5 16 21

2. Biomass / Waste-to-Energy Power 7 9 16

3. Construction 5 8 13

4. Environmental Components Manufacturer 7 11 18

5. Environmental Components Distributor 1 1 2

6. Environmental Consulting 31 44 75

7. Fuel Cell Manufacturer 0 3 3

8. Solar Power 43 49 92

9. Waste Disposal 13 24 37

10. Water Purification 2 7 9

11. Wind Power 1 3 4

(Unclassified) 3 3 6

Grand Total118

(40%)178

(60%)296

(100%)

The wide range of goods and services produced by Los Angeles Countys greentechnology sector, as captured in these eleven categories, is described below.

Alternative Fuel Vehicles: Passenger and industrial vehicles that use less fuel and emitfewer pollutants into the air, with the aim of delivering speed, range, and power similar tointernal combustion engine vehicles. Vehicles using fuels other than traditional fossilfuels are particularly emphasized. This group includes the design and manufacturing of:

Engine and exhaust systems and parts designed to reduce vehicle emissions, suchas fuel cell, hybrid (combination gas and electric) and compressed natural gaspower sources.

Vehicle emissions testing equipment, such as onboard emission sensors.

Rechargeable battery systems that collect and store energy. Electric vehicle conversion kits.

Electric propulsion systems and conversion kits for bicycles and scooters.


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Biomass / Waste-to-Energy Power: Processing organic matter (tree cuttings, householdgarbage) or industrial waste products to yield electrical energy, usually through burningto produce heat or steam energy that is then converted into electricity by turbines.

3

Examples of these processes being used in Los Angeles include: Converting animal fats and used cooking grease into biodiesel fuel products.

Converting methane gas generated by decomposing waste buried in local landfillsinto electricity.

Producing electric power from industrial digester gas using turbine generators.

Construction: Building residential or commercial buildings that incorporate designs,materials, or technologies that use less energy for heating, cooling, lighting andappliances, and produce fewer pollutants in the form of sewage, gray water, ash, solidwaste, and smoke. Building repair and service companies are included in this group.Some establishments specialize in the installation of green building technologies, such asambient heating systems, that are constantly changing. (Establishments primarilyinvolved in solar panel installation are classified here under Solar Power.) Theconstruction establishments of the Los Angeles green technology sector include thefollowing:

Foundation drilling/environmental services.

Environmental and pollution control relating to construction equipment.

Installers of blowers, fans and air purification equipment for buildings.

Soundproofing with fiberboard panels made from biodegradable rice straw.

Environmental engineering services company, remedial construction.

Design and installation of radiant heat, and general "green materials"

construction.

Environmental Components Manufacturing: Manufacturers of green technologyproducts and components. These establishments are competing to design, test,manufacture and market new technologies for applications such as air filtering systemsused in commercial buildings and water filtering systems used in waste water treatmentfacilities. Examples of environmental components being manufactured in Los Angelesinclude:

Micro-turbine engines for high efficiency gas power, such as in hybrid buses.

Ambient air pollution monitoring and control instrumentation.

Environmental controls, heat, transfer, electric and power management and

generation systems and aircraft landing and engine systems for aerospace. Activated carbon, air and water purification equipment; solvent recovery systems.

Combustion related equipment for refineries, petrochemical, chemical,pharmaceutical, off-shore gas and oil industries.

Efficient, specialty combustion equipment including pilots, burners, and flares.

3 Refer to the US Environmental Protection Agencys Landfill Methane Outreach Program (LMOP)program, which promotes the use of landfill gas as a source of green energy. http://www.epa.gov/lmop/


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Electronic air pollution detection devices for consumers and industry.

Transducers for measuring pressure and temperature.

Gas energy engineering and installation of cogeneration facilities.

Environmental Components Distribution: Marketing, wholesaling and retailing greentechnology products, generally without changing the products themselves. This is a smallgroup in Los Angeles County and includes the following types of business:

Distribution of environmental abatement and ion exchange recovery equipmentfor domestic and overseas markets in Asia.

Distribution of environmental instruments for monitoring and controllingpollution.

Environmental Consulting: Helping clients remain in good standing with federal, stateand local environmental regulations. Since environmental reviews have become aninstitutionalized part of real estate development process, and since most manufacturingindustries are regulated in regards to air, water and ground pollution, there is a largenumber of these consulting establishments in Los Angeles County. Some examples oftheir work include:

Environmental analysis and compliance, environmental restoration.

Phase I property assessments and certifications, soil profiles.

Environmental impact reports, site historic surveys, aerial photography.

Laboratory testing services; analysis of groundwater and soil.

Legal services concerned with environmental regulation, natural resources andland use.

Civil and utility engineering design, architecture, GIS computer mappingconstruction management and CAD services to public and private sector clients.

Transportation and rideshare planning to reduce traffic.

Emission credit brokering services related to air quality.

Fuel Cells and Batteries: Fuel cells convert hydrogen and oxygen into water, capturingthe electrical energy from this chemical reaction, which is about twice as great as the heatenergy captured by an internal combustion engine using the same amount of fuel.Batteries are electro-chemical storage devices that can produce an electric current. Thesetechnologies have potential for high-efficiency and low (or zero) pollution, making thema promising branch of green technology. Regular lead-acid battery manufacturers are not

included as green, but a small number of local establishments making specializedbatteries for use with fuel cells and alternative fuel vehicles are included. Here are a fewsample profiles of establishments in this group:

Developing, manufacturing and selling fuel cells from 12 watts to 5 kilowatts.

Manufacturing hydrogen sensors for hydrogen fuel cell power systems.

Designing and manufacturing equipment that optimizes fuel cell systemperformance.


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Fuel storage and delivery systems that allow internal combustion engines to runon clean-burning fuels, such as low-emission hydrogen and natural gas.

Solar Power: Manufacturing, distributing and installing devices using photovoltaic celltechnology, which converts sunlight into electricity.4 These establishments includephotovoltaic cell engineers and manufacturers, solar panel installation companies, andutility companies that purchase solar power and distribute it across their power grids.Here are some examples of solar power companies in Los Angeles:

Manufacturing photovoltaic cells, panels, and concentrator photovoltaic cells.

Manufacturing, designing, and installing photovoltaic module equipment,photovoltaic module laminators, solar cell sorting equipment, photovoltaicmodule testing equipment, and customized photovoltaic modules.

Manufacturing, wholesaling, and exporting photovoltaic systems, solar waterheating systems, combined solar electric and liquid heat transfer systems.

Manufacturing photovoltaic solar cell arrays used in several recent NASAmissions, including one of the Mars rovers.

Distributing and installing solar modules, DC inverters, controllers/regulators,solar accessories, solar module mounts.

Waste Disposal: Handling the waste products of other businesses, processing garbage formunicipalities, and cleaning-up emergency spills and contaminated soils. Theseremediation and waste management services also include water filtration services andhandling the industrial pollutants particular to the ports. Some examples of these types ofservice include:

Recycling hazardous wastes including: used oil, degraded petroleum products,diesel, contaminated fuels, gasoline, hydrocarbon solvents, jet fuel, oily water,water soluble oils, contaminated groundwater, and tank cleaning.

Bio-organic remedial products and services for soil and water related problems.

Designing and manufacturing fluid preservation equipment that eliminates thedisposal of oils, water, and other fluids used in maritime transportation, airlinetransportation, and industrial applications.

Designing and building hazardous and radioactive waste encapsulation systems.

Designing and manufacturing gas analyzers and systems for monitoringenvironmental and greenhouse gases in the ambient air, vehicle exhaust and stackgases.

Analyzing tract sub-surfaces to find old landfills, buried drums, graves, buriedutilities, faults, groundwater and pollution, removal services.

Brokering, packing and exporting recovered fiber materials from garbage.

4 Electrical current is created when sunlight strikes photovoltaic cells (such as those mounted in a panel ona roof), causing electrons in the cells to be dislodged. Source: The Solar Electric Power Association,http://www.solarelectricpower.org


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Removing and managing hazardous and non-hazardous liquid or solid waste,traffic control, emergency spill response.

Hazardous waste management, hazardous waste transportation, remediation, leadand asbestos remediation, facility clean-up, and emergency response clean up andcontainment.

Materials recovery to extract recyclables from municipal solid waste and divert itfrom landfills, and construction and demolition recovery to divert buildingmaterials and scrap from landfills for reuse.

Water Purification: The water purification group captures two types of services:1) cleaning polluted water from industrial sources so that it can be discharged intomunicipal sewer systems, and 2) further treating and purifying water so that it is ofsufficient quality to be used as drinking water. Examples of local establishments include:

Manufacturing water purification, wastewater treatment, and liquid filtrationproducts for residential and commercial application.

Reverse osmosis water treatment and desalination systems.

Water treatment chemicals and service for cooling towers, steam boilers, hot andchill water closed loops chemical cleaning, cooling tower repair.

Manufacturing wastewater and industrial wastewater treatment systems andequipment.

Manufacturing water well casing and screens for construction of monitoringwells.

Wind Power: There are two types of wind power establishments in this group, although

neither has a significant presence in Los Angeles County. Small-scale wind powersystems are a small but fast growing segment of the national and regional grid. Theseconsist of small wind turbines that provide less than one megawatt of electricity. Utility-scale wind power, the type that is of most interest to the DWP, consists of "wind farms"with large-scale turbines capable of generating up to several hundred megawatts ofelectrical power for the grid.

5The few local establishments in this group include:

Full service wind turbine sales, service and equipment installation, includingrepair and operation of many different brands of small to medium scale windturbine generators.

Marketing wind tower parts and equipment, such as steel rolling machines tobuild wind towers that also offering consultation services for groups interested in

starting up small wind farms.

The varying sizes of the different functional categories of the green technology sectorpartially reflect the strengths and weaknesses L.A.s economy and natural setting. Forexample, the regions natural resource endowment includes an above-average capacity

5 For more information on this part of the green technology sector, refer to the American Wind EnergyAssociation, http://www.awea.org/


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for solar energy production, which is our largest functional category. Conversely, windpower is a much smaller part of Los Angeles green technology sector.

Los Angeles particular mix of green technology businesses is also an outgrowth of ourregulatory standards and highly developed industrial economy, which help stimulate theenvironmental consulting and waste disposal / remediation groups. The environmentalconsulting group derives much of its business from helping real estate developers andother businesses, as well as community residents, comply with growing concerns aboutenvironmental impacts. The waste disposal / remediation group responds to the overalleconomys need to reduce the steady output of waste products going into our landfills, airand water. The innovative technologies used to achieve these goals are a potential boonto the local economy and may offer opportunities for Los Angeles to leverage its growingabilities to mitigate negative impacts upon its own environment into an export sector thatcan provide goods and services to the rest of the U.S. and other countries.

Geography of Los Angeles Green Technology Businesses

Where are green technology businesses located within Los Angeles County? Asmentioned above, 40 percent of the approximately 300 green technology establishmentsstudied for this report are located in the City of Los Angeles. Figure 1 shows the locationof these businesses by functional category.

While construction and solar power establishments, for example, are scattered throughoutthe county, there are some discernable geographic concentrations of other greentechnology vendor categories. Waste disposal / remediation firms are concentrated in the

cities of Los Angeles, Vernon, Huntington Park, Torrance and Irwindale. Environmentalconsulting is concentrated in downtown Los Angeles, West Los Angeles, Santa Monica,Western San Fernando Valley, Pasadena, and Torrance. Alternative fuel vehiclebusinesses are concentrated in Carson, Gardena and Torrance.


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Economic Roundtable 11Figure 1: Geography of Los Angeles County Green Technology Vendors


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13

Section 2: Identifying and AnalyzingGreen Technology Industries

What industry classifications do green technology businesses fall into? Answering this

question allows us to link the approximately 300 green technology firms identified in Los

Angeles County to larger industry data sets that provide information about wages,training time, overall size, growth trends, survival rates, and economic impacts of

different industries in L.A.s economy.

Table 2: Industrial Classification of Green Technology Businesses in Los Angeles County

Green Technology Businesses by Group

NAICS Industry TitleAlternativeFuelVehicles

Biomass/Waste-to-Energ

y

Construction

Env.

ComponentsDistributor

Env.

ComponentsManufacturer

Env.

Consulting

FuelCellandBatteries

SolarPower

WasteDisposal

WaterPurification

WindPower

GrandTotal

22 Utilities 3 3 2 8 16

23 Construction 7 62 1 70

31 Manufacturing (Non-Durable) 1 1

32-33 Manufacturing (Durable) 10 1 3 13 2 3 12 4 1 49

42 Wholesale Trade 3 1 1 1 9 5 1 2 2344-45 Retail Trade 1 3 1 1 6

48 Transportation and Warehousing 1 1 2

54 Prof., Scientific, and Tech. Services 7 3 2 67 6 5 90

55 Mgmt. of Companies & Enterprises 1 1

56 Waste Mgmt. & Remediation Services 2 1 1 20 24

61 Educational Services 1 1

81 Other Services 1 1

92 Public Administration 5 5

Grand Total 21 14 13 2 20 74 3 92 37 9 4 289Note: Cells with ten or more establishments are shown in boldface type. Establishments with unknown grouping and/or

industrial classifications are not displayed.

From this point onward in this report our analysis of the green technology sector focuses

on these formal industry classifications (from the North American Industry ClassificationSystem NAICS), looking at the city and countys total industry base in classifications

where green technology activity is apparent. A cross tabulation of the approximately 300

green technology firms by NAICS title is shown in Table 2. The table divides LosAngeles Countys twenty-one alternative fuel vehicle establishments into the primary


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activity of each establishment: ten are manufacturers, seven provideprofessional,

scientific, and technical services, three are wholesalers, and one is a retailer. Some

insights gained from this table include:

The majority of biomass/waste-to-energy establishments are created by utilitycompanies (NAICS 22) and government agencies (NAICS 92), while solar power

firms are more numerous and concentrated in private construction, mainly solar panel

installers and roofing companies.

Of the 37 firms in the waste disposal group, the majority (20 establishments) are

directly engaged in waste collection, treatment and disposal. However, the other 17establishments are involved in a range of support activities that include the

manufacturing of specialized equipment, as well as professional, scientific, andtechnical services.

The solar power group, in addition to being concentrated in private construction, alsoincludes a number of support activities such as manufacturing solar panel parts and

control equipment (12 establishments), the wholesaling and retailing of solar units

and parts (12 establishments), and the professional, scientific and technical supportservices (6 establishments) involved in creating new technologies.

Viewed altogether,

L.A.s green tech-nology sector is

highly diversified,

with a broad rangeof production ac-

tivities (research

and development,manufacturing,

sales and distribu-

tion) and services

(remediation, en-gineering, legal,research and de-

velopment, and

testing laborato-

ries) located here.

How does theshare of greentechnology jobs in

L.A.s economy

compare with thestate and nation?

We answer this

question by

Figure 2: Location Quotient for IndustriesCapturing Green Technology Businesses

0.00 0.50 1.00 1.50 2.00

Transm. & Power Train Parts

Mfg (336350)

Air Purification Equipment Mfg.

(333411)

Remediation Services

(562910)

Res. Plumbing, Heating, & A/C

Contr (238221)

Environmental Consulting

Services (541620)

Res. Electrical Contractors

(238211)

Single-Family Housing Constr.

(236115)

Roofing Contractors (235610)

R & D in Phys, Eng & Life

Sciences (541710)

Semiconductor Device Mfg

(334413)

Engineering Services (541330)

Measuring & Control Device

Mfg (334519)

Testing Laboratories (541380)

Water Supply and Irrigation

Systems (221310)

Hazardous Waste Treatment

and Disposal (562211) Los Angeles Co

California

Source: U.S. Census Bureau, EPCD, 2003 County Business Patterns.


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looking at a more detailed breakout of industries in Figure 2, which shows how LosAngeles County and Californias employment in 15 detailed industries that employ themost workers in green technology compares to the nation. This analysis technique is

called a location quotient and it compares the share of industry employment in the localeconomy to the national economy to identify specializations in the local economy. Alocation quotient of1.00 means that an industry has the same degree of concentration inthe local economy (Los Angeles County or California) as in the national economy. Alocation quotientgreater than 1.00 means that our local economy is specializing in anindustry (as measured by employment) because the industry is more concentrated herethan in the national economy. Figure 2 illustrates that while the State of Californiasshare of employment in several green technology industries is greater than the nation as awhole, Los Angeles Countys share of employment in all of these industries is below thenational average. Several Los Angeles County industries with green technologyemployment come close to being equal to the national benchmark, including:

Industry Title (6-digit NAICS Code) L.Q.Hazardous Waste Treatment and Disposal (NAICS 562211) ................................ 0.98Water Supply and Irrigation Systems (NAICS 221310) ........................................ 0.97Testing Laboratories (NAICS 541380) ..................................................................0.97Measuring & Control Device Mfg (NAICS 334519)............................................. 0.92

Part of this finding can be explained by Los Angeles Countys broadly diversified overalleconomy. Yet it is also true that many of these industries have declined along withL.A.s high tech aerospace industries and its overall durable manufacturing sector. Thatsaid however, L.A.s residual technological strengths related to green technology and thelarge local demand for green products and services suggest that:

1) There is significant potential for expanding the green technology sector of theeconomy, both by helping new businesses start-up and by greening existingbusinesses and industries.

2) Planning and incentives by local government can help spur economic growth ingreen directions.

This second conclusion is drawn from Los Angeles experience providing rebates forresidents and businesses to install solar panel power systems and connect them to theDWP grid. This incentive program is partly responsible for the rapid growth of solarpanel installation establishments in Los Angeles, where public subsidies help offset thecost of rooftop systems.6

6 In September 2000 the City of Los Angeles' Department of Water and Power began a solar buy-downprogram to increase the installation of Solar Photovoltaic (PV) rooftop systems among residential andcommercial customers. This one-time Incentive payment dramatically reduced the cost of SolarPhotovoltaic (PV) rooftop systems. The incentive ranges from $3.25 to $4.50 for each system watt, with amaximum allowable of $45,000 for residential and $1 Million for commercial customers. This LADWPSolar Program subsidy fund (which was exhausted in early 2005) could be combined with a 7.5% State ofCalifornia solar income tax credit, calculated against the cost of installed, grid-connected solar electricsystems. Source: LADWP website http://www.ladwp.com/ladwp/cms/ladwp000787.jsp


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Industry Characteristics of Green Technology

What share of L.A.s potentially green industries do we know to be involved in greenactivities? The 2002 employment data for the 300 establishments discussed earlier wasmatched against overall county employment for the same industries, as shown in Figure 3and presented in greater detail in Table B of the Appendix. What we see is that only avery small share of employment in potentially green industries is in fact known to begreen. This demonstrates that there is great potential for further greening in L.A.seconomy.

Most data about employment, wages and growth-trends in the U.S. economy is industry-based. These industry datasets provide valuable information, but a consequence of using

this data to learn about the characteristics of green technology establishments is that weare including many non-green establishments in the information we use to describe eachindustry. For example, although the portion of Los Angeles Countys Motor VehicleParts Wholesale industry (NAICS 4231) that we identified as having green activity had1,655 jobs in 2002, this was only 3 percent of the 51,723 total jobs in the overall MotorVehicle Parts Wholesale industry. Therefore, an assumption needs to be made that greentechnology establishments have employment, wage and growth-trend characteristics thatgenerally resemble the industry group that they fall within. This is not an unreasonable

Figure 3: Top 15 Los Angeles Co. Industries by Green Technology Employment

- 10,000 20,000 30,000 40,000 50,000 60,000

Power Train Eq Mfg (3336)

Machinery Manufacturing (3333)

Other Electrical Eq Mfg (3359)

Petroleum Products Mfg (3241)

Animal Processing (3116)

Motor Vehicle Parts Mfg (3363)

Building Equip. Contractors (2382)

Electronic Component Mfg (3344)

Structural Contractors (2381)

Instruments Mfg (3345)

Plumb & Heating Eq Whls (4237)

Computer Systems Srv (5415)

Sci & Tech Consulting Srv (5416)

Arch & Engineering Srv (5413)

Motor Vehicle Parts Whls (4231)

Employment

Total LA Co. Employment (Except Green Tech.)

Green Technology Vendor Employment

Source: Economic Roundtable research;

U.S. Department of Commerce. "County Business Patterns 2002: California". Washington, DC: U.S. Government Printing office .


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assumption, since Los Angeles green technology sector is not a separate economy, butembedded within industries shaped by similar economic factors.

The industries that capture Los Angeles green technology sector are displayed in Figure4. The most desirable industries for targeted job creation strategies are those in theupper-right quadrant of the graph that had growing employment from 1996 to 2002 andpay high average monthly wages.

L.A. City employment in nine major green technology industries that have stable orgrowing job levels and pay average wages of at least $2,500 a month is as follows:

Building Equip Contractors 11,217 jobsScientific, Tech Consulting 10,419 jobsArchitectural, Engineering Services 9,565 jobsComputer Systems Design 8,452 jobsScientific Research and Development Services 3,775 jobsElectrical Component Manufacturing 1,162 jobsWaste Remediation and Management 928 jobsHVAC Equipment Manufacturing 608 jobsPower Train Equipment Manufacturing 431 jobs

Figure 4: Employment, Wage and Job Change Data for the Industriesthat Capture Los Angeles Green Technology Sector

(Number of Jobs Represented by Size of the Circles)

Building

Equipment

Contractors

Scientific,

Technical

Consulting

Architectural

& Engineering

Services

ComputerSystems

Design

Instru-

ments

Mfg

Building

Exterior

Contractors

Motor

Vehicles

WhlseElectricalGoods

Whsle

Electronic

Comp Mfg

Machinery

Whsle

Scientific

R & D

Services

MotorVehicle

Parts Mfg

Water,

Sewage

Systems

HVAC

Hardware

Whsle

ElectricalComponent

Mfg

Waste

Treatment,

Disposal

Waste

Remediation

& Mgmnt

Electronic

Equip Repair

ElectricalEquip Mfg

HVAC

Eq Mfg

Machinery Mfg

Power Train

Eq Mfg

-80%

-60%

-40%

-20%

0%

20%

40%

60%

80%

$2,000 $2,500 $3,000 $3,500 $4,000 $4,500 $5,000 $5,500 $6,000

Average Monthly Wage in 2002

Job

Change1996-2002as%o

f2002Jobs

JobDecline

JobGrowth


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City employment in a cluster of 6 green technology industries that pay high wages but areexperiencing job losses is as follows:

Instruments Manufacturing 7,432 jobsElectronic Component Manufacturing 4,417 jobsWater, Sewage Systems 2,803 jobsWaste Treatment, Disposal 976 jobsElectronic Equipment Repair 740 jobsElectrical Equipment Manufacturing 622 jobs

These high-wage industries, especially the ones with the largest and/or growingemployment, represent the best initial targets for expanding the green technology sectorin the City of Los Angeles. The city should also explore ways in which industries on thesecond list (experiencing declining employment) can be assisted in turning around theirrecent job losses.

Summary of Findings about Green Technology Industries

This analysis of the industries in which green technology firms are classified reveals thefollowing:

1. Green Technology products and services come from a range of industries that isnearly as diverse as the regional economy.

2. When compared to the U.S. economy, Los Angeles is under-represented in everymajor industry with green technology components.

3. Within Los Angeles industries with green technology components, only a verysmall fraction of output has identifiable linkages with green markets.

4. Los Angeles large and diverse industrial base has competitive strengths related togreen technology, despite the regions under-developed role in this sector. Theseinclude:

Nine major green technology industries with stable or growing employmentand average wages of at least $2,500 a month, including:Building equipmentcontractors, Construction, Scientific and technical consulting services, andArchitectural and engineering services

Six green technology industries with declining employment but average

wages over $3,000 a month, including manufacturers of instruments andelectrical and electronic equipment

5. Already a leader in creating new environmental markets through public incentiveprograms and small-business start-ups and innovation, there appears to bepotential for growth in Los Angeles green technology industries if existingbusinesses and entrepreneurs:


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Are able to learn about new markets for their environmental products andservices. The City of Los Angeles can assist this process by educating localfirms in green industries about of the public sector market for green productsand services. These events could expand to include private-sector buyers ofgreen technology products and services.

Are effective in competing for a share of those markets. Many of the greentechnologies shown in Table 1 are developed and sold through markets thatare national or even international in scale. Thus, when a local municipalitywants equipment installed to convert landfill methane into energy, or a SantaClarita homebuilding company wants to add solar panels to 100 new units,companies from across the U.S. and sometimes abroad compete for theseorders.

Strengthen capabilities for drawing on the intellectual assets of localuniversities and research institutions to develop cutting-edge products andservices.

Successful economic development policies for the green technology sector are less aboutfocusing on a handful of specialized industries and more about connecting existingindustries with green markets. This report argues that city government can play astrategic role in helping build these connections.


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21

Section 3: Ripple-Effects of Green TechnologyIndustries in Los Angeles Economy

What is the impact of the green technology sector on Los Angeles County's overalleconomy? We answer this question by using an input-output model to study theindustries that capture Los Angeles green technology sector and answer the followingmore specific questions:

What is the total output (value of sales) for each industry, and what share ofoutput comes from the value added by local companies, versus the value added bynon-local companies further back in the supply chain?

What share of the value added locally in each industry returns to employees in theform of compensation?

What share of purchases by different industries comes from within Los AngelesCounty?

How much revenue isrequired to create onejob in each greenindustry?

The amount of total output(sales) and local value addedby the largest industries inL.A.'s green technologysector are shown in Figure 5.For example,Engineering &Testing Lab companies had$5.4 billion in total output(sales) in Los AngelesCounty during 2002, with$4.0 billion (74 percent) of

that being the value added bylocal companies themselves.The remaining value ofoutput is attributable to inputspurchased from suppliers.

Figure 5: Output and Value Added by L.A. CityIndustries with Green Technology Components, 2002

$0 $2 $4 $6

Single-fam housing

constr

Measuring & control

device mfg

Engineering srv &testing labs

Environmental

consulting srv

Trans & power trainparts mfg

R & D phys, eng &

biological

Semiconductordevice mfg

HVAC, electrical &roofig const

Air purification equip

mfg

Waste treatment,

remediation

Irrigation systems

Billions of Dollars

Value Added

Output

Source: IMPLAN Input/Output Model for Los Angeles County, 2002


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Industries in L.A. City's green technology sector with the highest output are:

Single-Family Housing Construction $7.6 Billion

Measuring and Control Device Manufacturing $7.3 BillionEngineering Services and Testing Labs $5.4 BillionEnvironmental Consulting Services $3.7 BillionTrans and Power Train Parts Manufacturing $2.9 Billion

The five industries that add the greatest value within the City of Los Angeles are:

Engineering Services and Testing Labs $4.0 BillionMeasuring and Control Device Manufacturing $3.4 BillionSingle-Family Housing Construction $3.3 BillionEnvironmental Consulting Services $2.8 BillionResearch and Development in the Physical,

Engineering and Biological Sciences $1.5 Billion

When we consider who will benefit from public investments to support growth in greentechnology industries it is information to look at the share of revenue that goes to workersas compensation versus the share that remains with company owners as profit or savings.Figure 6 displays employee andowner compensation as a percentof value added in the City of LosAngeles green technology in-dustries in 2002, using input-output data. Industries that passa high percentage of their value

added along to employees ascompensation, such as Semicon-ductor Device Manufacturingand Measuring and Control De-vice Manufacturingtend to becapital-intensive durable goodsmanufacturers, deriving most oftheir value added from workerfabrication and assembly activi-ties. These industries pass on amuch greater share of the value

they add to employees than istypical in Los Angeles County.TheEnvironmental Consulting,Waste Treatment and Remedia-

tion andIrrigation Systems in-dustries resemble the county av-erage much more closely. These

Figure 6: Employee and Owner Compensation as aPercent of Value Added in L.A.

0% 20% 40% 60% 80% 100%

Irrigation systems

LOS ANGELESCOUNTY AVG.

Waste treatment,remediation

Single-famhousing constr

Environmentalconsulting srv

Engineering srv &testing labs

HVAC, electrical &roofig const

Trans & powertrain parts mfg

Air purificationequip mfg

R & D phys, eng &biological

Measuring &control device mfg

Semiconductordevice mfg

Owner Income

EmployeeCompensation

Source: IMPLAN Input/Output Model for Los Angeles County, 2002


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are less capital-intensiveindustries.

How much revenue isrequired to create onejob? This aspect of theinput-output model de-scribes the amount ofoutput (sales) neededfor each industry to adda new job. As show inFigure 7, there is sub-stantial variation amongthe industries in Los

Angeles green technol-ogy sector. This varia-tion is largely explainedby whether industriesare labor- or capital-in-tensive, since those withhigher total output perworker (such as MotorVehicle Parts Manu-facturingand Semicon-ductor Device Manu-

facturing) generally require greater investments in physical plant and capital. At thebottom of Figure 7, well below the average county output per worker, is theMiscellaneous Store Retailers industry. This industry is labor intensive and hascomparatively low total output (sales) per worker. Although the industry requires lowertotal output (sales) to add each new job, the productivity of each individual worker is alsolower, resulting in jobs that often pay low wages.

What share of industry purchases come from within Los Angeles County? Thisimportant question can be answered by the input-output models Regional PurchaseCoefficient, which distinguishes between supply inputs coming from inside versusoutside of Los Angeles County. The Regional Purchase Coefficient identifies the degree

to which increased output (sales) will have local impacts. Figure 8 again highlights thebiggest industries in Los Angeless green technology sector, and reveals that ten of themobtain 80 percent or more of their supply inputs from within Los Angeles County. (Theaverage Regional Purchase Coefficient for all industries in Los Angeles County is 77percent.) Industries with the highest Regional Purchase Coefficients include:

Water, Sewage and Other System: 100% New Residential Construction: 100%

Figure 7: Total Output per Worker by Industry,Los Angeles County 2001

$0 $100,000 $200,000 $300,0

Misc. Store Retailers (411)

Sci Research & Dev Services (446)

Maint. & Repair Constr. Non-Res (43)

Air Purification Equipment Mfg (275)

Mgmt Consulting Services (444)

Arch. & Engineering Services (439)

Maint. & Repair Constr. Res. (42)

Residential Additions Constr. (35)

Wholesale Trade (390)

Environmental Consulting Srv (445)

New Residential Construction (33)

Waste Mgmt & Remediation Srv (460)

Measuring & Control Device Mfg (321)

Semiconductor Device Mfg (311)


Source: IMPLAN Input/Output Model for Los Angeles County, 2001.All LA Co. Industries = $74,141 (- - - - - -)


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Wholesale Trade: 100%Residential Additions Construction: 100%Miscellaneous Store Retailers: 95%

Arch. and Engineering Services: 90%Maintenance and Repair Construction, Residential: 88%Management Consulting Services: 80%Environmental Consulting Services: 80%Waste Management and Remediation Services: 80%

At the other end of the scale, theAir Purification Manufacturers industry was found tohave no local suppliers, and thus would have limited impact upon the Los AngelesCounty beyond paying out compensation to its own employees, land rent, and local taxes.Overall, however, Figure 8 shows that Los Angeles' green technology industries producepowerful ripple effects in the local economy.

Figure 8: Regional Purchase Coefficients by Industry,Los Angeles County 2001

0% 20% 40% 60% 80% 100%

Air Purification Equipment Mfg (275)

Semiconductor Device Mfg (311)

Sci Research & Dev Services (446)

Measuring & Control Device Mfg (321)


Maint. & Repair Constr. Non-Res (43)

Waste Mgmt & Remediation Srv (460)

Environmental Consulting Srv (445)

Mgmt Consulting Services (444)

Maint. & Repair Constr. Res. (42)

Arch. & Engineering Services (439)

Misc. Store Retailers (411)

Residential Additions Constr. (35)

Wholesale Trade (390)

New Residential Construction (33)

Precent of Inputs Purchased in LA Co.All L.A. Co. Industries = 77.0% (- - - - - -)Source: IMPLAN Input/Output Model for Los Angeles County, 2001.


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Three Case Studies of Industry Supply Links

To illustrate the economic ripple-effects that result from increased purchases from local

suppliers (also known as upstream effects) when an industry grows, we discuss input-output modeling projections for three industries.

1. Maintenance and Repairof Residential Structures(Figure 9). Most greentechnology establishmentsthat fall within this industrymodify existing residencesby installing photovoltaic

solar power systems. Somealso retrofit homes toaccommodate energy ef-ficient technologies, suchas ambient heating andmodifications that makehomes eligible for LEEDcertification7. The largestcommodity suppliers of theMaintenance and Repair of

Residential Structures in-

dustry are listed in Figure9, along with the percent-age of inputs provided byeach supplier. The majorinputs include constructionsupplies (such as WoodKitchen Manufacturing,Wood Windows and DoorManufacturing,Ready-Mix Concrete ManufacturingandPlastic Plumbing Fixtures).Several commodities have few if any suppliers located in Los Angeles County: Ready-Mix Concrete Manufacturing,Heating, Ventilation, Air Conditioning (HVAC) and Re-

frigeration Manufacturing, Sawmills, andPainting and CoatingManufacturing. Thegreen technology establishments that are included in the larger, mostly non-green Main-tenance and Repair of Residential Structures industry are likely to purchase a similarmenu of commodities and to make a significant portion of purchases within the county.

7 Visit http://www.usgbc.org/LEED/ to learn more about environmentally sustainable building standards.

Figure 9: Input Commodities for the L.A. CountyResidential Repair and Maintenance Industry, 2002

0% 1% 2% 3% 4% 5% 6%

Paint & Coating Mfg

Arch. & Engineering Svc

Sawmills

HVAC & Refrigeration

Plastics Plumbing Fixtures

Ready-Mix Concrete Mfg

Truck Transportation

Wood Windows & Door Mfg

Wood Kitchen Cabinet Mfg

Wholesale Trade

Percent of Overall Commodity Inputs

Total Inputs

LA County Inputs

Source: IMPLAN Input/Output Model for Los Angeles County, 2002.


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2.Electricity and SignalTesting Instruments (Fig-ure 10). This industry

makes instruments formeasuring and testingelectricity and electricalsignals, such as volt andohm meters, watt meters,and semiconductor testingequipment. The major in-puts for Los Angeles basedcompanies include a vari-ety of electrical compo-nents with a low share of

production occurring lo-cally:

8Semiconductor

Manufacturing(30 percentcoming from L.A.County),All Other Elec-tronic ComponentsManufacturing(36 percentfrom L.A. County), andElectricity and SignalTesting Instruments (40percent from intra-industry

trade within L.A. County).

Inputs also include professional and technical services, which have a high share of localprocurement: Management Companies (80 percent from L.A. County), Custom ComputerProgramming(80 percent from L.A. County),Advertising and Related Services (90percent from L.A. County), andArchitectural and Engineering Services (70 percent fromL.A. County).

Green technology companies in this industry create the components that control andmeasure power generation in solar, wind and biomass/waste-to-energy systems,

8 Note: The Wholesale Trade industry should be treated with caution when interpreting Input-Outputanalysis of upstream suppliers. While this broad industry group does handle the merchant wholesaledistribution of many materials, parts and equipment demanded by green technology vendors, therebycreating its own demand for jobs, it is principally an intermediary in the flow of goods. Thus in Figure 10,where theElectricity and Signal Testing Instruments industry case study is considered, Wholesale Trade isshown as a 100 percent local supplier industry. This does not mean, however, that the manufactured goodsthat the Wholesale Trade industry handles were made in Los Angeles County. It only means that theWholesale Trade companies were based in Los Angeles, and that they handle goods that are manufacturedboth inside and (increasingly) outside of the county.

Figure 10: Input Commodities for theL.A. County Electrical and Signal Testing Instruments

Industry, 2002

0% 2% 4% 6% 8% 10%

All other forging

& stamp

Real Estate

Arch. &

Engineering Svc

Advertising &

Related Svc

Custom

Computer Prog.

Mgmt.

Companies

Wholesale

Trade

Elec. & Signal

Testing Instr

Other Electronic

Comp Mfg

SemiconductorMfg


Total Inputs

LA County Inputs



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determine pollution levels in air and water, and allow HVAC systems to self-regulate asinternal temperatures change. The types of purchases made by green technologyElectricity and Signal Testing Instruments companies probably resemble those made by

the larger number of non-green companies in this industry, relying upon both non-localelectronics manufactures and local professional service providers. This industry maywell present an opportunity for import substitution, enabling locally designed andmanufactured electronic devices to account for a larger share of local purchases.

3.Environmental and Other Technical Consulting Services (Figure 11). Thisprofessional service industry assists other businesses and organizations with envi-ronmental compliance, assessing and coping with contaminated soils and spills, anddesigning strategies for green building and development. Much of the value added bythis industry comes from in-house human capital, including scientists, engineers,planners, and environmental lawyers. Most of the inputs that these businesses rely upon

come from within the Los Angeles County economy (76 percent), including:Real Estate(office space), Tele-communications (phones and Internet), Office Support, StaffingServices, andBanking Services. In addition, major labor inputs are obtained locally from:Employment Service andArchitectural and Engineering Service companies.

Because most industryinputs are procuredlocally, theEnvironmental and OtherTechnical Consulting

Services industry creates

significant upstreamimpacts that arecomplimentary to avariety of other greentechnology activities:

Construction ofenvironmentallysustainable residentialand commercialbuildings requirescompliance with a

steadily evolving setof standards andmeasures.Constructioncompanies needenvironmentalengineers, forexample, to obtain

Figure 11: Input Commodities for the L.A. CountyEnvironmental and Technical Consulting Industry, 2002

0.0% 0.5% 1.0% 1.5% 2.0% 2.5%

Services to Buildings

& Dwellings

Banks

Design Licensing &Royalty Companies

Business Support

Svc

Other Support Svc

Office Administrative

Svc

Telecommunications

Arch. & Engineering

Svc

Real Estate

Employment

Services


Total Inputs

LA County Inputs



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certification of green buildings, which often results in added sales and rentalrevenue.

Waste Management and Remediation businesses that provide ecosystem servicesthrough technologies for improving air quality from point sources, cleaning andpurifying water, and reducing toxic contaminants in the soil depend on theEnvironmental and Other Technical Consulting Services industry to certify thequality of their remediation work, both in laboratories and courtrooms.

Alternative Fuel Vehicles, Fuel Cell and Biomass / Waste-to-Energy businesses areall relative upstarts within the global green technology sector, with a few small-sizedbusinesses in each category. Prototypes are developed in old warehouses andinventors garages, sometimes attaining the scale and investment capital needed tomanufacture their products through partnerships and joint ventures. To avoid risk andreduce cost, these entrepreneurial businesses outsource work to environmental andtechnical consultants who manage financing, engineer prototypes for assembly-line

production, custom-fit products into client-specific settings, and otherwise performservices that the entrepreneurs cannot handle themselves.

Highlights of Ripple-Effects from L.A.s Green TechnologyIndustries

1. Several of Los Angeles green technology industries purchase 80 percent or more oftheir supply inputs from within the county. These industries produce the largest localeconomic and job multipliers.

2. The share of added value that goes to employees in different green technology

industries ranges from 44 percent to 93 percent. Manufacturing industries pass on alarge share of locally added value to workers.

3. Industrial inputs required by green technology industries typically can be divided intothree categories:

Category of InputApproximate ShareMade in L.A. County

Manufactured components 50 percent local

Specialized services and out-sourced labor inputs 80 percent local

General work space and office equipment 80 percent local

4. Manufactured goods (such asElectricity and Signal Testing Instruments) tend to havea greater share of their inputs coming from suppliers located outside of the county,while service products (such asEnvironmental and Other Technical ConsultingServices) have the highest share of local input suppliers.

5. Industry inputs that come largely from outside Los Angeles represent potentialopportunities for import substitution through local economic development initiativestargeted on those industries.


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29

Section 4: Occupations Used in Green TechnologyIndustries and Job Opportunities for L.A. Residents

What do we know about occupations within the City of Los Angeles largest green

technology industries? Occupation-based datasets can provide a useful overview of jobsin green technology businesses, which spread across many industry categories (utilities,

construction, manufacturing, professional services, and waste remediation). Many

occupations, such as electricians and carpenters, secretaries and clerks, engineers andarchitects, are found in many different green industries and add up to a significant

regional job pool. This section describes the characteristics of these jobs.

What are L.A. Citys most numerous green technology occupations? The occupations

listed in Figure 12 were identified by applying an industry-occupation matrix to theinventory of local green technology industries shown in Section 2. Six of the citys top

20 green technology occupations are in construction, accounting for 25 percent of jobs.Professional occupations provide a significant share of jobs: Civil Engineers (2 percent),

Architects and Draft-ers (2 percent), andBuilding Architects (2

percent). Other large

occupations are office-based jobs: General

and Operations Man-

agers (3 percent), Of-fice Clerks (2 percent),and Executive Secre-

taries (2 percent).

This occupational dis-

tribution reflects thefact that the work per-

formed by green tech-

nology businesses inour sample is strongly

skewed towards con-struction and modifi-cation of residential

and commercial build-

ings (such as solar

power installations) aswell as office-based

work carried out by

Figure 12: Los Angeles Most NumerousGreen Technology Occupations, 2002

246

254

262

272

295

356

375

404

405

410

443

504

527

542

605

724

791

1,192

1,304

1,380

0 200 400 600 800 1,000 1,200 1,400 1,600

Electronics Engineers

Maint. & Repair Workers

Construction Managers

Helpers--Electricians

Engineering Managers

Secretaries, General

Architects, Building

Refuse & Recyclable Collectors

Architectural Drafters

Sheet Metal Workers

Bookkeepers and Auditors

Civil Engineers

Exec. Secretaries

Office Clerks, General

1st-Line Supervisors of Constr.

General and Operations Managers

Construction Laborers

Plumbers and Pipefitters

Carpenters

Electricians

Employment

Source: Economic Roundtable Research, CA Census of Employment and Wages (ES-202) , 2002.


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professional consultingorganizations.

What wages are paid inLos Angeles biggestgreen technology occu-pations? Not surpris-ingly, the occupationswith the highest averagehourly wages ($35 perhour and higher) aremanagerial and profes-sional (Figure 13).These occupations also

have the highest entry-level wages.

9While

these occupations maybe out of reach forworkers struggling withlimited skills and otherbarriers to employment,there are a number ofblue collar and pinkcollar occupations thathave lower education

and skill requirements.Additionally, several occupations (such as construction) have significant wageprogressions from entry-level to average earnings:

Occupation Entry-Level Hourly Wage Overall Avg. Hourly WagesCarpenters $13.11 $21.87Plumbers and Pipefitters $11.53 $20.87Sheet Metal Workers $11.12 $20.82

These wage levels are similar to the Citys entry-level and average wages for alloccupations, which were $15.32 and $23.28 respectively, in 2005.

How can hopeful workers get hired into these jobs and what skills and knowledge do theyneed too acquire to compete successfully for work in Los Angeles green technologysector? Poor and/or unemployed workers, in particular, have longstanding and urgentneeds to connect with jobs like these that will provide substantial economic progress forthem and their families, and also stimulate economic ripple effects through theirhousehold spending.

9 The entry level wage is equal to the average of the bottom third of wages in any given industry.

Figure 13: Wages of the Largest Occupations inL.A.s Green Technology Industries, 2005

$0 $10 $20 $30 $40 $50 $60





Bookkeepers & Accountants



Executive SecretariesSheet Metal Workers

Plumbers & Pipefitters

Carpenters

Architectural & Civil Drafters

Electricians

CITY OF LOS ANGELES



Civil Engineers



General & Operations Managers


Hourly Wages

2005 Entry-Level Hourly Wage

2005 Average Hourly Wage

Source: CA Employment Development Dept. "L.A. Co. SOC Title & Wage Data, 2005."


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We can answer thesequestions by determiningthe length of training and

the skills needed to enterthe most numerous greentechnology occupations,especially those payingliving wages that are ac-cessible to entry-levelworkers. Average train-ing time for all occupa-tions in the City of LosAngeles is 1.5 years.Green technology occu-

pations that require aver-age or less than averageamounts of training timeinclude: 10

Electricians,Ar-chitectural Drafters

Plumbers andPipefitters

Sheet MetalWorkers

Maintenance andRepair Workers

Carpenters

Bookkeepers and

Auditors

General Secretaries

Electricians Helpers


General Office Clerks

Refuse and Recyclable Collectors.Required training time for these and other occupations are displayed in Figure 14. After

workers are employed in these jobs, subsequent training can lead to opportunities forwage progress in linked occupations, as shown earlier in Figure 13.

10 Data on the training time for different occupations is drawn from Job Zones of the O*Net(Occupational Information Network) system, which is a comprehensive database of occupationalinformation. Job Zones were converted into calendar years. The entire database is on-line at:http://online.onetcenter.org/

Figure 14: Training Time Required for L.A.s LargestOccupations in Green Technology Industries, 2005

0 1 2 3 4 5






Bookkeepers and Auditors

Carpenters


Sheet Metal WorkersPlumbers and Pipefitters

Architectural Drafters

Electricians


Exec. Secretaries

Civil Engineers




General and Operations Managers


Years of Training RequiredNote: All LA Co. Occupations = 1.47 years ("- - - - -")

Source: CA Employment Development Dept.-LMID. 2005 OES Employment & Wages by Occupation;

O*Net Occupational Information Netw ork, Version 5.5


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Skill Profiles for TwoCase-Study Occupations

What skills will hopeful workers needto master in order to compete forthese jobs? Each occupation has aunique set of skills, knowledge, tasksand work activities. Skill profiles fortwo case-study occupations are pre-sented here:Refuse and RecyclableMaterial Collectors and GeneralMaintenance and Repair Workers.

1.Refuse and Recyclable Material

Collectors: Operation and controlof equipment is the most importantskill to compete for jobs in this occu-pation (Figure 15). Los AngelesCounty had an estimated 3,060 per-sons employed in these jobs during2004, with entry-level wages of$12.54 per hour, and average overallwages of $19.41 per hour, which isequivalent to an average annual wageof $40,363. These wages are quite

attractive given that typical occupa-tion training is less than 3 months.

2. General Maintenance and RepairWorkers: A variety of skills are de-manded, which typically require be-tween one and two years of training(Figure 16). Thus, workers need ex-tensive vocational and classroomtraining to compete for jobs in thisoccupation. Los Angeles County had

an estimated 1,780 persons employedas General Maintenance and RepairWorkers during 2004. The typicalentry-level wage is $15.01 per hour,and the overall average wage is$22.54 per hour, which is equivalentto an average annual wage of$46,875. This occupations combi-

Figure 15: Skills Required for Refuse andRecyclable Material Collectors

0 20 40 60 80 100

Speaking

Learning Strategies

Reading Comprehension

Monitoring

Judgment & Decision Making

Active Listening

Troubleshooting

Repairing

Equipment Selection

Service Orientation

Mgmnt of Material Resources

Coordination

Operation Monitoring

Equipment Maintenance

Time Management

Operation and Control

Score (max=100):

Level of SkillNeeded

Importance toEmployers

Source: O*NET Occupational Information Network, Version 5.5.

Figure 16: Skills Required for General

Maintenance and Repair Workers

0 20 40 60 80 100

Complex Problem Solving

Time Management

Coordination

Operation Monitoring

Operation and Control

Monitoring

Active Listening

Learning Strategies

Active Learning

Reading Comprehension

Repairing

Equipment Selection

Critical Thinking

Troubleshooting

Installation

Equipment Maintenance

Score (max=100):

Level of SkillNeeded

Importance toEmployers

Source: O*NET Occupational Information Network, Version 5.5.


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nation of manual skills (Equipment Installation,Equipment Selection,Repairing) andthinking skills (Troubleshooting, Critical Thinking,Active Listening,ReadingComprehension) can be applied to a variety of different technologies, giving workers the

opportunity to move laterally in the labor market in addition to climbing job ladderswithin specific sectors, such as green technology.

Ethnic Distribution of Workers in Green Technology Jobs

The ethnic distribution of Los Angeles residents working in jobs commonly found in thegreen technology sector is similar to that of the overall labor force (Figure 17). Thissectors low-wage, low-skill occupations are dominated by Hispanics/Latinos, who makeup over 60 percent ofConstruction Laborers,Refuse and Recyclable Collectors,Electricians Helpers, Carpenters andHand Material Movers. Whites/European-Americans make up over 55 percent of managerial and professional occupations. Asian-

American and Pa-cific Islanders arealso strongly repre-sented in profes-sional occupations,comprising 39 per-cent ofElectronicsEngineers, 37 per-cent ofArchitec-tural and CivilDrafters, 25 percent

ofCivil Engineers,and 26 percent ofSoftware Engineers.African Americansare concentrated inclerical, systemsoperations and handlabor occupations.

The degree to whichethnic groups are

concentrated inoccupations withmarkedly differentskill sets, averagewages and job lad-ders echoes largertrends of inequalityin the city and is a

Figure 17: Ethnicity of L.A. City Residents Employed in theLargest Green Technology Occupations

0% 20% 40% 60% 80% 100%

ALL EMPLOYED LA RESIDENTS

ALL GREEN TECH JOBS




Carpenters

Material Movers, Hand

Plumbers & Pipefitters


1st-Line Supervisors Constr.

Electricians

Customer Srv. Reps.


Sheet Metal Workers

Executive Secretaries

Architectural & Civil Drafters

Bookkeepers & Accountants



General & Operations Managers

Architects

Civil Engineers

Waste Treatment Operators


Software Engineers


Hispanic White Asian Black Other Source: 2000 Census 5% PUMS

for the City of Los Angeles.


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matter of concern. As green technology jobs increase in Los Angeles, proactiveeconomic development strategies are needed to avoid replicating the digital divide ofthe 1990s, where computer access, Internet use, and jobs in high tech fields were im-

pacted by race and ethnicity. The city needs to ensure equal access to opportunities in thegrowing green technology sector through economic development strategies that createinclusiveness for individual workers and also for the broader neighborhoods in whichthey reside.

Highlights of Green Technology Occupations

1. Six of the 20 largest occupations in green technology industries are in construction,accounting for 25 percent of jobs. Several of the construction occupations havesignificant wage increases between their typical entry-level and overall occupationalaverage.

2. There is a cluster of green technology occupations that both have low skillrequirements and pay living wages. These occupations represent good opportunitiesfor workers to make economic progress after relative short intervals of training.

3. Case studies of two green technology occupations (Refuse and Recyclable MaterialCollectors and General Maintenance and Repair Workers) show that they draw upondistinct and different sets of skills. They are emblematic, however, of the variety ofdifferent work opportunities that can be found in the green technology sector.

4. The ethnic distribution of Los Angeles residents working in green technology

occupations is similar to that of the overall labor force. Workers of all ethnicitiesshould be ensured fair opportunities to compete for higher-skilled and higher-payingoccupations.


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35

Section 5: Green Technology Industries that Providethe Greatest Economic Benefit

Strategic data about Los Angeles green technology industries has been compiled as partof this project to filter local impacts and identify target industries for job creation. Table3 lists the data that was integrated to weigh the trade-offs between economic impactsgenerated by different green technology industries.

Table 3: Economic Data Used to Identify Initial Targets among Industries Capturing LosAngeles Green Technology Sector

Number of Establishments

In Los Angeles City 2002

In Los Angeles County 2002

Average Monthly Employment Average Monthly Employment in

2002

Job Change between 1996 and2002

Job Change as percent of 2002Employment

Average Monthly Wages

Average Monthly Wage 2002

Change in Average Monthly Wagesbetween 1996 and 2002

Wage Change as percent of 2002Wage

Training Time

Average Job Zone

Percent of Jobs Requiring 1 Year or

Less of TrainingIndustry Multipliers (LA County)

Output Multiplier

Employment Multiplier

Value Added per Worker

Output per Job

Employee Share of IndustryExpenditures (per Dollar)

Indirect Business Taxes per Dollarof output

Source: Data analyzed for initial industry targets is drawn from the City of Los Angeles Economy Project 2005, theQuarterly Census of Employment and Wages (ES-202), O*NET Occupational Information Network, and theIMPLAN (Minnesota IMPLAN Group) 2001 and 2002 Impact Analysis for Planning System.

Three minimum criteria were used in this study to identify green technology industriesthat appear to be economically and socially sustainable:

1. At least 500 jobs in the city of Los Angeles so that there is an identifiable basefor growth.

2. Stable or growing employment between 1996 and 2002.3. Average wages of at least $2500 per month in 2002 (this wage threshold is

equivalent to $30,000 per

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