Made possible through generous support from Pacific Gas and Electric Company and Bank of America

1. WELCOME Regional Economic Vitality Conversations Summary Report Briefing For Governor Schwarzenegger’s CabinetPresented by the California Center for Regional LeadershipIn Cooperation with Regional Civic Leadership Organization SponsorsMarch 3, 20051:00 – 4:00 p.m. Made possible through generous support from Pacific Gas and Electric Company and Bank of America

2. Regional Economic VitalityBriefing – Action Agenda California Center for Regional Leadership March 3, 2005

3. Innovation, Investment, Collaboration • Governor Schwarzenegger elected – makes economy a priority • Secretary Sunne Wright McPeak convenes first statewide Economic Vitality Conversation—December 2003 • California Center for Regional Leadership (CCRL) asked to convene Regional Economic Vitality Conversations

4. Regional Economic Vitality Conversations • Antelope Valley • Central San Joaquin • Inland Empire • Northern Central Coast • Northern San Joaquin • Orange County • Sacramento • Southland • Silicon Valley • San Francisco Bay Area • Tri-Valley • San Diego

5. Innovation, Investment, Collaboration • Conversations convened by CCRL’s network of Regional Collaboratives, with many local partners • Conversations facilitated by the Cabinet, framed by economic overview, and addressed 3 questions: • What state actions will have the most immediate impact on California’s economic recovery? • What state actions will result in the most significant long-term improvement to California’s economic competitiveness and comparative advantage • How do we best structure an effective partnership between the Regions and the State around economic strategy?

6. Regional Conversations: Presenting Economists • Jack Kyser, Sr. VP & Chief Economist: Los Angeles EDC • Christopher Thornberg, Senior Economist: UCLA Forecast • Joe Hurd, Senior Economist: UCLA Anderson Business Forecast Project • Doug Henton, President: Collaborative Economics • Stephen Levy, Dir. & Sr. Econ: Ctr. for Continuing Study of the CA Econ. • Michael Locke, President & CEO: San Joaquin Partnership • Robert Fountain, Director: Sacramento Regional Research Institute • Don Perry, Senior Economist: California Labor & Workforce Dev. Agency • John Lehn, CEO: Kings County Economic Development Corporation • Anil Puri, Dean, College of Bus. & Econ: CSU Fullerton • Marney Cox, Chief Economist: San Diego Association of Governments • John Husing, Vice President: Economics & Politics, Inc.

7. California Regional Economies Project • California Regional Economies Project, a partnership between the California Workforce Investment Board and the California Economic Strategy Panel, provides systematic analysis of distinct regional economies • Collaborative Economics • Center for Continuing Study of the California Economy

8. Regional EVC Reports • Regional reports, economist presentations, and Conversation notes can be found on CCRL’s website: www.calregions.org

9. From Dialogue to an Action Agenda • Recommendations synthesized and reviewed in 3 cross-regional meetings (San Francisco, Stockton, Orange County) with economic development experts • Commonly shared issues lifted up into “Innovation, Investment, Collaboration” report • Bringing it all back together: Cabinet briefing March 3, 2005

10. A Framework for California’s Prosperity

11. The Building Blocks of California’s Comparative Economic Advantage

12. State of the State’s Economy • Modest economic recovery underway • Economic restructuring is taking place in every region and requires continuous attention • California is a global leader in key sectors • State government has a critically important role to play to maintain and enhance leadership • The key framework for State action: Innovation, Investment, Collaboration

13. Competing on Innovation – the “Complete Business Climate” • California is not a low-cost state and cannot compete by lowering costs alone • To compete and raise standard of living: State needs a “pro-innovation” strategy • Yield: productivity growth across all industries-- leading to increased investment , return on investment and prosperity • State’s role: • Create fair & balanced regulatory & tax policies • Support essential investments in human and physical infrastructure – the key production factors of people, research and technology, and place

14. The Complete Business Climate Approach

15. Action Agenda Framework:Key Themes • Emphasize and promote the positives -California Assets • Understand fundamental changes in growth and demographics • Retain and grow current employers as the first priority -- by improving the business climate

16. Action Agenda Framework:Key Themes • Focus strategically on important regional and cross-regional “traded” industry clusters • Invest in the workforce (short- and long-term) • Invest in housing, transportation, and other important infrastructure, including quality communities

17. Action Agenda Framework:Key Themes • Government streamlining : focus on customer service and accountability • Government innovation: remove barriers to governmental efficiency • Government stability and sound decisions: solve the structural budget deficit and reform state-local fiscal relationship • Government alignment: state policies and investments must “fit” regional differences, needs and opportunities

18. Action Agenda Framework: Specific Recommendations • Marketing California • Build on assets • Communicate re: problem solving • Focus on existing businesses, especially small businesses – the source of most job creation • Attract and retain intellectual assets -- the source of innovation • Support and align with local and regional marketing efforts • Goal: Sustainable, competitive industries and good quality jobs with good benefits

19. Action Agenda Framework: Specific Recommendations • Critical Industries • Ongoing data/analytic process to identify growing clusters of opportunity • Use data to guide state policies and investments • Develop a State R&D Strategy • Promote collaboration with and among research institutions and other innovation partners • Reinstate and better target the Manufacturing Investment Tax (MIC) Credit; assess cap on MIC and R&D Tax Credits

20. Action Agenda Framework: Specific Recommendations • Education and Workforce Investment • Develop a “seamless” workforce development system, from K-12 to post-doc and lifelong learning • Identify critical skills gaps for key industries; target state funds for job and career advancement • Promote public-industry partnerships to meet industry and worker training needs

21. Action Agenda Framework: Specific Recommendations • Growth and Infrastructure Planning and Investment • Create regional infrastructure plans linking jobs, housing, transportation, ”green” space and land use • Use these plans to determine State funding priorities • Reward jurisdictions for collaboration on regional planning and development • Improve CEQA for better housing and development outcomes while maintaining high environmental quality • Explore and promote options for innovative local “self help” measures for infrastructure financing

22. Action Agenda Framework: Specific Recommendations • Housing • Take all measures necessary to assure a sufficient long-term supply of decent housing, affordable to all income levels • Address prevailing wage rates for construction – determine and use residential rates for residential development • Support fiscal reform to encourage housing production

23. Action Agenda Framework: Specific Recommendations • Economic Leadership Network • Collaborate with and support the Regions to prepare and implement economic strategies • On-going link among Economic Strategy Panel, Workforce Investment Board, Commission on Jobs and the Economy, and other state entities -- and with Regions • Leverage existing network of regional and local organizations and explore the potential for more formal partnerships

24. Action Agenda Framework: Specific Recommendations • Federal Agenda • Organize California Congressional Delegation for strong leadership and coordinated efforts to obtain California’s fair share of funding and appropriate treatment in federal regulations • In particular, State leaders should work with Delegation to promote federal research funding for California – to leverage our intellectual infrastructure

25. The Complete Business Climate Approach

26. We are your Partners

27. What Makes a Region Competitive? Highlighting our Innovation Assets • San Diego Regional Prosperity Index – Competing on the Three E’s – Economy, Environment (Place), Equity (People) • Economic Opportunity in the Sacramento Region – Biotechnology/Life Sciences and U.C. Davis Partnerships • University of California and NASA Partnerships – Bio-Info-Nano Research & Development Institute

28. Sustainable Competitiveness

29. The Three “E” Concept • Sustainable Competitiveness requires a balance of: • Economy • Environment • Equity • All three are important for Quality of Life

30. Strengths of Three E Approach • Consensus on QOL essential Elements • No internal conflict between Elements • Maintaining status quo not acceptable • Focus political will and initiate actions

34. Combining The Es • Each “E” is important, but the strongest regions do well in all three…

36. SUMMARY • Evaluation tool is a work in progress • Common theme among California regions

37. www.sandag.org

38. Our Economic Opportunity in the Greater Sacramento Region:Focus on Biotechnology/Life Sciences Judith A. Kjelstrom, PhD Director, UC Davis Biotechnology Program Director, Advanced Degree Program for Corporate Employees Lecturer in Microbiology and Molecular & Cellular Biology www.biotech.ucdavis.edu March 3, 2005

39. To the Regional Economic Vitality Briefing: There is nothing so powerful as an idea whose time has come. Victor Hugo • Biotechnology is no longer a fledging technology…. • It is a economic driving force in the region and the state, as well as the world. Additional background materials are in packet

40. The Greater Sacramento Region is poised to become a Mixed Biotech/Life Science Cluster. ~100 Life Sciences companies exist in the Valley As of 2004: Over 100,000 Jobs! per EDD California is the sixth-largest economy in the world. The state is the arguable biotechnology leader with clusters in the Bay Area and San Diego. The public and private university systems are some of the best in the nation. California universities oversee $3 billion in academic R&D annually. California has more degreed professionals, managers, and engineers than any other state.

41. UC is a Key Player in these Clusters: Provide Intellectual & Human Capital • The recent UC Impact Study 2003: California’s Future: It Starts Here demonstrates the economic impact on California. • Through 2011, UC’s contribution is estimated to total more than 34,000 undergraduates in science and engineering jobs. • The impact of UC grads in industry clusters is estimated at $887 million in Gross Regional Product for 2002 and $7.4 billion between 2002-2011. • The value and economic contribution of UC related start-ups and spin-offs are great. California headquartered companies founded by UC graduates, had combined revenues exceeding $1.2 billion in 2001. UC Davis Economic Impact Brochure is included in packets

42. UC Davis has Strong Intellectual Capital in the Biosciences • UC Davis Genome Center in the new 6-story Genome and Biomedical Sciences Facility • Center for Biostabilization – blood products • Center for Biophotonics Science and Technology • UC Davis Cancer Center – NCI designated cancer facility • California National Primate Research Center • Center for Comparative Medicine & Mouse Biology Program • Center for Metabolomics • National Center of Excellence in Nutritional Genomics –focus on minority health • M.I.N.D Institute – focus on autism • UC Systemwide Biotechnology Research & Education Program (UCBREP) Interdisciplinary Collaboration is a Hallmark of UC Davis Teaching and Research

43. UC Davis Partnerships • Education/Training • CSU, Sacramento, local Colleges, and K-12 schools • Technology Transfer • Office of Research: Technology-Industry Alliances (TIA) – UC Davis CONNECT • GSM’s Big Bang Business Plan Competition • SARTA (Sacramento Area Regional Technology Association) www.sarta.org • UC Discovery Grants • Collaborations with other academic institutions such as UC Merced, LLNL, UCSF, etc. • UCD Research Park & McClellan Park • To promote research collaborations • To launch spin-off companies

44. The Strength of UC Davis is in the Life Sciences • Division of Biological Sciences • Numerous outstanding majors: Plant Biology; Biochemistry; Molecular & Cellular Biology; Genetics; Microbiology… • College of Agricultural & Environmental Sciences • Undergraduate Biotechnology major is one of the fastest growing majors on campus. • School of Medicine • School of Veterinary Medicine • College of Engineering • Biophotonics and Biomedical Engineering are examples of cross-disciplinary areas. The Designated Emphasis in Biotechnology is an innovative program for PhD students (www.deb.ucdavis.edu)

45. The UC Davis Biotechnology Program is active in Education & Training • Co-PI on an NSF grant-Tools to Teach Molecular Biology & Bioinformatics“Train the Trainers” • Courses for Community College and AP High School Biology teachers • Joint project with American River College • Coordinate the NIH Biotechnology Training Grant & DEB (Designated Emphasis in Biotechnology) www.deb.ucdavis.edu • Interdisciplinary training for predoctoral graduate students • Industry internships (3-6 months) & corporate fellowships • The Advanced Degree Program (ADP) for corporate employees • A PhD program for the working professional • Member of Biotech Advisory Committees • California State University, Sacramento • American River, Solano and Merced Community Colleges • Davis Senior High School

46. Biotech Workforce Needs • The U.S. is moving toward a knowledge-based economy that requires higher skills. • According to the Economic Development Department, California’s biotechnology firms currently employ 100,000 workers: • 14% are vocational and community college grads, 50% BS, 17% MS and 19% PhD (Steven Dahms, CSU). • One estimate is that the Bay Area biotechnology companies will need 150,000 more biotechnology workers by 2015 (Sakai and Markland Day, City of Fremont: Life Sciences Industry Scoping Report, Sept. 2004, p 22)

47. Where will we find Biomanufacturing Technicians? • Hundreds of biotech jobs in Alameda, Contra Costa and Solano counties go begging due to a lack of qualified talent; the most-difficult positions to fill involve skilled technicians with two years of community college or the equivalent laboratory training, who can expect earning $35,000 per year. (“A Critical Analysis of the Local Biotechnology Industry Cluster in Alameda, Contra Costa & Solano Counties,” 2002.) Genentech (Vacaville’s Manufacturing Facility) is doubling in size in the next 4 yrs and will hire close to 600 new workers! (Barbara Smith, The Reporter, July 16, 2004)

48. Training Facilities are Needed Workforce training in biomanufacturing is a critical need, especially for displaced workers. • UC Davis (in consultation with Solano Community College and CSU, Sacramento) has developed a pilot plant proposal –CIBER: California Institute for Bioprocess Education and Research. • Multi-disciplinary Center for advanced bioprocess training that includes pilot-scale equipment for all unit operations common in the production of purified recombinant proteins and other biological products from microbial fermentation and cell culture. • Will be used as a training facility for biochemical engineers and scientists who will be employed in the pharmaceutical and agricultural biotechnology industries, as well as a continuing education resource for the West Coast Biotech industry. • Would also allow strategic training collaborations to be established between the University of California and the surrounding community colleges (especially Solano Community College that also has an established program for training the biotechnology workforce) and the California State University system. • Investment is needed through innovative partnerships: industry, federal, and state to raise $4-5M.

49. If We Build it; Will the Students Come?? • Biotech is Hot, but many students don’t know about it! • We must reach out to the K-12 teachers to help. • We must instill the Ah-Ha experience early (by 5th grade)…. Hands-on learning, discovery-based labs, guest instructors from industry or university, mentoring and job shadowing. Before- or After-School Science Programs. • Community colleges can offer general education courses on Biotech Issues to hook undeclared majors. It can also educate the community about Biotech. See the NSF report on science education:www.nsf.gov/sbe/src/seind02/start.htm

50. Call to Action for the Biotech Workforce • Increase the effectiveness of publicly funded training programs; • Promote alternative education and training opportunities; • Keep older workers engaged in the labor force; • Consider changing immigration policies to better meet future workforce needs; • Need more coordination between academia and industry in creating relevant curriculum Create Regional Life Science Working Groups