The Bay Area Regional Economic Assessment

1. The Bay Area Regional Economic Assessment Bay Area Council Economic Institute

2. Principal Objectives • Assess the driving forces behind the Bay Area economy • Competitiveness, jobs and growth • Identify impediments to stronger growth and job creation • Provide a shared foundation of economic facts • Make general recommendations strategy going forward

3. Broad Recommendations: Themes • Major themes • Public private partnerships • Closer gov’t/business collaboration • Sub-themes • Opportunities for LMI communities • Sustainable growth

4. Basic Findings Unique economic assets Significant and specific impediments to growth Significant room for policy influence

5. Foundation of Economic Facts Economy Sources of prosperity Impediments to growth Recommendations

6. Bay Area Regional Economic Assessment Headline economic facts

7. 1. GDP/Capita is Relatively High

8. 2. The Bay Area Has Heavy Employment Concentrations in High Value Added Sectors

9. Bay Area Share of Selected U.S. Tech Jobs in 2010

10. 3. Wages Are Relatively High in All Broad Occupation Categories

11. 4. Employment Growth Has Been Slow

12. 5. Wage Inequality is Growing Faster than Elsewhere

13. 6. There is Growing Homogeneity in Regional Economic Activity Locations of New Technology Companies (Startups) 1991 & 2007

14. 7. Significant Commutes are Common

15. 8. Business Starts are The Basis for Growth

16. 9. The Bay Area is not a High Start Region

17. Bay Area Regional Economic Assessment Sources of Prosperity

18. Highly Educated Labor Force

19. Venture Capital Source: PriceWaterhouseCoopers MoneyTree

20. Culture of Innovation

21. Bay Area Regional Economic Assessment IMPEDIMENTS TO GROWTH

22. High Housing Prices

23. Business Views • Business Climate/Views: • Region is a good place to do business: • 56% reported it as either good or excellent, 28% as fair. • Business climate responses were mixed, but slightly positive: • 40% were satisfied, 27% neutral, 26% dissatisfied. • Most were either satisfied or neutral on infrastructure. • Most were satisfied with access to capital. (Over 50%.)

24. Business Views • Regulatory environment was also mixed, but more negative: • 38% were satisfied, 24% neutral, 33% dissatisfied. • Frustrations were voiced regarding lack of consistency between regulations and requirements at the local, regional and state levels.

25. Business Views • Other Thoughts • 62% reported difficulty with meeting workforce needs. • K-12 public education was a concern, with only 32% reporting a satisfied level with the system. • The Bay Area’s quality of life remains a key positive differentiator, with over 90% responding satisfied.

26. Bay Area Regional Economic Assessment Low and Moderate income communities

27. Where are LMI Communities?

28. Notes on Bay Area’s LMI Communities • Commutes are comparable to (a little longer than) average non-LMI commutes • Employment is relatively concentrated in: • Retail trade (13.6%), health care (11.4%), accommodation and food srvcs (11.3%) • Occupations • Office and admin support (15.5%), sales and related (11.3%), construction (7.2%) • Numbers and shares of Bay Area households in LMI categories are growing

29. Sustainable LMI Policies • Grow the broader economy • Evidence shows that when the economy does well, demand for the labor of LMI workers increases • Workforce training • The skills gaps are not just at the college+ level • Workforce training can lift LMI workers and the economy simultaneously

30. Bay Area Regional Economic Assessment Population and Economic Futures

31. Bay Area Population Growth (thousands)

32. Implications and Issues Baby boomer aging and retirement to 2020 and beyond—the challenge of replacing these workers across all occupational levels Decline to 2020 in 35-54 age groups and growth in 25-34 age group A shift in housing demand to smaller units in high amenity areas??

33. Growth in Total Jobs

34. Other Job Findings Projected 690,000 (20.2% job gain 2010-20) of which 270,000 represent a recovery of jobs lost after 2007 Leading growth sectors—professional & business services and health care followed by leisure & hospitality and self employed with large % gain in Information led by Internet services Construction and manufacturing not projected to regain all lost jobs while government, trade and finance will have 2020 levels close to 2007

35. Implications and Issues • Bay Area job growth led by technology and innovation sectors, trade and tourism • Firms in technology report increasing difficulty in finding skilled workers • The region competes for business but at the same time we compete for business by competing for workers and their families • Creating great places to work and live

36. Bay Area Regional Economic Assessment Broad Recommendations

37. Areas for Attention Establish a Business Advisory Committee to the JPC Engage Business Earlier in Individual Agency Plans Harmonize Local Regulations at the Regional Level Focus Economic Development Strategies in Areas Where the Region is Most Competitive Develop a Stronger Focus on Workforce Training and Development Establish an Entity to Lead Regional Economic Strategy

38. Bay Area Council Economic Institute • Regional Analysis • Business & Market Analysis • Ports & Infrastructure Analysis • Economic Impact Analysis • Public Policy Analysis