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A Closer Look at Economic Opportunity in Rural California

A Closer Look at Economic Opportunity in Rural California. John Melville Collaborative Economics. Overview. California Regional Economies Project Clusters of Opportunity Health Services Regional Experience Rural Entrepreneurship—Initial Findings. Bay Area. -6.4%. U.S. -1.2%. -0.2%.

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A Closer Look at Economic Opportunity in Rural California

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  1. A Closer Look at Economic Opportunity in Rural California John Melville Collaborative Economics

  2. Overview • California Regional Economies Project • Clusters of Opportunity • Health Services • Regional Experience • Rural Entrepreneurship—Initial Findings

  3. Bay Area -6.4% U.S. -1.2% -0.2% California 0.7% SoCal Coast 1.5% N. California 1.9% Border 3.2% Sacramento 4.4% N. Sacramento 4.8% 4.8% Valley Sierra 9.2% -8.0% -3.0% 2.0% 7.0% 12.0% (Percent Change in Total Job Growth, 2000-2003) A State of Regional Economies

  4. ExportOriented PopulationDriven CareerPotential Clusters of Opportunity ClusterofOpportunity

  5. Bridging Workforce and Economic Development Goals Economic Development Cluster ofOpportunity WorkforceDevelopment

  6. Other Health Offices of Health Services: Major Export/ Practitioners: Hospitals Ambulatory, Dentists, Physicians Pop. Driven Emergency and and Other Vocational Rehab. Home Health and Medical Equipment Medical Diagnostic Support Sectors Residential Nursing and Supplies Laboratories Care R&D WIBs, Community & Biomedical: Venture Capital Local Technical Colleges, Biotechnology and Federal and State Infrastructure Universities Bioengineering funding Rural Health Services Cluster

  7. Portfolio of Regional Health Care Clusters for California's Rural Areas 1.8 Northern Sacramento Valley 1.6 21,429 1.4 Northern California San Joaquin Valley 16,911 100,965 1.2 Average Annual Growth Rate (1990-2002) 1.0 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% Employment Concentration (CA Average 1.0) Central Coast 0.8 36,875 Central Sierra 0.6 3,898 0.4 0.2 0.0 Size (2002), Concentration relative to CA (2002) and Growth Rate of Urban Health Care Cluster (1990-2002 A Growing Cluster in Every Region

  8. Bio-pharma Medical Devices Clinical Trials Tele-medicine Health policy Health Services Health Sciences Hospital Care Clinicians Home Health Medicine Pharmacy Biology Opportunities in Health Convergence

  9. Health Care Career Potential Occupational Level

  10. Long-term, Recent, & Potential Residents Current & Potential Visitors Distinctive, Regional Quality of Life Experience Natural Places History, Culture Education Leisure Specialty Food, Beverages,Retail • Amusements • Gambling • Golf • Spectator sports • Sightseeing • Tours • Recreation • Camping • Museums • Art galleries • Live events • Educational (ag-tourism) • Full service restaurants • Wineries • Specialized retail Regional Quality of Place Infrastructure • Residential Infrastructure • Home construction • Architectural services • Services to buildings/dwellings • Maintenance • Global Connections • Infrastructure • Telecommunications • Travel Arrangements • Air transportation • Business support services • Community Infrastructure • Heavy construction • Utilities/public transit systems/waste mgt • Accommodations • Civic/social organizations Leveraging The Rural Experience

  11. Differentiated Relevant to Customization Stage Experiences Needs of Customization Competitive Customers Position Deliver Services Commoditization Make Goods Extract Commodities Commoditization Undifferentiated Irrelevant to Market Premium Source: Pine and Gilmore, 1999, p.72. The Progression of Economic Value

  12. Value Chain Linking Goods, Services, and Experiences

  13. From Commodities to Experiences

  14. Portfolio of California's Regional Experience Employment by Region, 1994-2002 2.00 Central Sierra 16,757 Central Coast 1.80 107,649 1.60 Northern California 37,495 1.40 X-Axis = AAGR 1994-2002 1.20 1.00 Employment Concentration: US = 1.0 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 0.80 Northern Sacramento Valley 35,955 0.60 0.40 0.20 0.00 Size (2002), Concentration relative to the U.S. (2002) and AAGR of the Regional Experience Clusters (1994-2002) Estimated 30% of Rural Job Growth From Leveraging Rural Experience

  15. Quality of Life Experience Occupational Distribution $90,000 $80,000 36,900 $70,000 $60,000 $50,000 $40,000 160,440 $30,000 340,970 $20,000 $10,000 $0 0% 20% 40% 60% 80% 100% Quality of Life Experience Occupational Clusters: Employment Size, Share of Cluster, and Wage Level High-Level Mid-Level Entry-Level Source: California Employment Development Department, US Bureau of Labor Statistics Limited Career Potential in Some Areas . . .

  16. Quality of Place Infrastructure Occupational Distribution $90,000 $80,000 543,550 $70,000 $60,000 $50,000 $40,000 $30,000 1,288,730 $20,000 713,280 $10,000 $0 0% 10% 20% 30% 40% 50% 60% Infrastructure Occupational Clusters: Employment Size, Share of Cluster, and Wage Level High-Level Mid-Level Entry-Level Source: California Employment Development Department, US Bureau of Labor Statistics . . . But Better Potential in Other Areas

  17. The Key is Rural Entrepreneurship • Total number of firms in rural California has grown by more than 20,000 since 1990 thanks to entrepreneurship • Firms created in just the last few years now account for much of today’s rural California economies • Headquarters operations account for most of total firms and employ most people in rural California

  18. 1990 and before 1996 through 1991 2002 through 1997 Rural California Full of Young Firms Age of firms operating in rural California 40% 40% 20%

  19. 90% of Rural Firms are Headquarters Firm distribution, according to ownership 10% HQ/Independent Branch 90%

  20. Rural Headquarters Are Biggest Employer Jobs, distributed by firm ownership 32% HQ/Independent Branch 68%

  21. Rural Firms Stay Put Firm Movement 3% Never moved between counties Moved into or out of county 97%

  22. People Firms Potential Habitat Targeting entrepreneurship in the Sacramento Valley

  23. 1.4 1.3 1.2 1.1 1 0.9 0.8 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Indexed regional farm and non-farm self-employment compared Wage and salary employment with total wage and salary jobs in the Sacramento Valley Region, 1990 - 2002 Non-farm self-employment Source: US Bureau of Economic Analysis Self-employment is growing faster than wage and salary employment

  24. 109,589 firms closed (1989-2002) 15,526 firms moved within the Sacramento Valley from 1989-2002 6,448 firms moved out of the region (1989-2002) 11,406 firms relocated or expanded into region (1989-2002) 139,181 firms created (1989-2002) Firm creation and closure responsible for most “churn” in regional economy

  25. New jobs from existing firms 10% New jobs from firm relocations/expansions into region 22% New Jobs from new firms 68% Most new jobs are from new firms Distribution of Job Creation Within the Sacramento Valley, 1989-2002

  26. Jobs created by new firms comparable to those of existing and relocating firms $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $- Operations of Outside Firms that Relocated or Expanded into the Valley Firms that Started in the Sacramento Valley Headquarters that moved into the Sacramento Valley since 1990 Firms that existed in the Sacramento Valley pre-1989

  27. To Find Out More . . . • Health Services and Regional Experience Cluster Papers • California Regional Economies Project (www.labor.ca.gov/panel/espcrepindex) • Entrepreneurial Sacramento Valley • Great Valley Center (www.greatvalley.org) • Stay Tuned: Patterns of Rural Entrepreneurship Paper, Clusters of Opportunity User Guide/Training

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