Transcript California’s Economic Engines

Framing International Trade
Opportunities through the
Regional Economies Project
Barry R. Sedlik
Business, Transportation and Housing Agency
International Trade Partnership Meeting
October 4, 2006
California is not just one economy but is the beneficiary
of the diversity of its nine regional economies.
California’s diversity of world class industries provides
a platform for economic growth and stability.
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Computers & Electronic Products
Bioscience and Biotechnology
Machinery (except electrical)
Transportation Equipment
Chemicals
Agricultural & Food Manufacturing Products
Electrical Equipment Appliances & Components
Tourism
Logistics
Motion Picture/Television Production
Business and Professional Services
Textile and Apparel
Source: Regional Economies Project
California’s industries concentrate within regions to leverage specialized
resources, institutions, and skills.
•Tourism
•Computers & Electronic Products
•Computers & Electronic Products
•Bioscience and Biotechnology
•Tourism
•Logistics
•Agricultural & Food Manufacturing Products
•Chemicals
•Logistics
•Computers & Electronic Products
•Machinery (except electrical)
•Transportation Equipment
•Chemicals
•Electrical Equipment Appliances & Components
•Tourism
•Motion Picture/Television Production
•Textiles and Apparel
•Bioscience and Biotechnology
•Tourism
•Tourism
The State of California is organizing its resources to better
identify its key industries by region and work with local
organizations to help businesses increase awareness of
international opportunities.
Cabinet
Legislature
LW&D
BT&H
CDFA
California Economic
Development Partnership
California
Workforce
Investment
Board
California
Economic Strategy
Panel
Technical Advisory
Group
Economic Vitality
Conversation Partners
California Partnership
for the San Joaquin Valley
California Partnership
for International Trade
California Regional
Economies Project
March, 2006
Proposed Network of Regional
and Economic Development
Organizations
(Local leaders representing business
,
community and civic interests
)
The state’s economic development activities
are based upon the building blocks of
comparative advantage.
Building Blocks of California’s
Economic Comparative Advantage
Effective
Governance
Building
Blocks of California’s
and Civic Leadership
Economic
Comparative
Stability for
Economic Development
Advantage
Efficient Government and
Effective Governance
Regulations
and Civic Leadership
Culture of Accountability
Stability for Economic Development
Government
and
Infrastructure Efficient
and Smart
Growth
Regulations
Culture of Accountability
Quality of Life
Infrastructure and Smart Growth
Competitive-Advantage Industry Clusters
Quality of Life
Drivers
of Economic Growth Industry Clusters
Competitive-Advantage
Drivers of Economic Growth
Research Excellence and Knowledge Base
Research Excellence and Knowledge Base
Magnet for Innovation
Magnet for Innovation
Business, Transportation and Housing
Agency and Housing Agency
Business, Transportation
Infrastructure is a building block of
competitive advantage and an industry
cluster.
Source: California Economic Strategy Panel
The infrastructure cluster is comprised
of major sub-sectors, industries, and
occupations.
SUB-SECTOR
INDUSTRIES
OCCUPATIONS
(Examples)
(Examples)
Planning & Design
Engineering Services
Environmental Consulting Services
Surveying & Mapping (except
Geophysical) Services
Regulation & Administration of
Transportation Program
Civil Engineer
Cost Estimator
Financial Specialist
Landscape Architects
Geodetic Surveyor
Mapping Technician
Equipment &
Materials
Construction Equipment
Construction Machinery
Manufacturing
Asphalt Paving Mixture & Block
Manufacturing
Construction Sand & Gravel Mining
Blow Torch Operator
Welding Machine Operator
Team Assembler
Machine Builder
Motor Installer
Highway & Other
Heavy
Construction
Highway Street & Bridge
Construction
Heavy & Civil Engineering
Construction
Construction Laborer
Landscaping Worker
General Contractor
Concrete Finisher
Maintenance &
Operations
Urban Transit Systems
Airport Operations
Support Activities for Water
Transportation
Support Activities for Rail
Transportation
Operations Manager
Machine Operator
Mobile Heavy Equipment
Mechanic
Cargo Supervisor
Each sub-sector has a range of
high-paying jobs.
Infrastructure Value Chain Wage Growth (Adjusted for Inflation)
Sub-sector & Driving Industries
1990
2004
% Change
Planning & Design
$56,622
$65,141
15%
Engineering Services
$62,916
$74,957
19%
Environmental Consulting Services
$53,096
$61,301
15%
Highway & Other Heavy Construction
$54,690
$61,442
12%
Other Heavy & Civil Engineering
$53,152
$63,549
20%
Highway, Street & Bridge Construction
$55,358
$60,900
10%
Equipment & Materials
$51,241
$52,501
2%
Construction Machinery Manufacturing
$42,149
$48,084
14%
Construction & Mining (except Oil Well) Machinery & Equipment Merchant
Wholesalers
$53,455
$57,972
8%
Maintenance & Operations
$55,466
$56,657
2%
Support Activities for Water Transportation
$71,921
$81,994
14%
All Other Support Activities for Transportation
$32,470
$35,619
10%
Infrastructure Total
$55,448
$61,012
10%
Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages
The concentration of each cluster
sub-sector varies by region.
Source: EDD/LMID, California Regional Economies Employment Series
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Bay Area
Central Coast
Central Sierra
Greater
Northern
Northern
San Joaquin
Southern
Southern
Sacramento
California
Sacramento
Valley
Border Region
California
Valley
Highway & Other Heavy Construction
Equipment & Materials
Maintenance & Operations
Planning & Design
Each sub-sector has innovation components which
form the basis for new industries and international
trade and investment opportunities.
California Statewide
Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages
2004 Employment Concentration Relative to US Employment
1.50
Maintenance & Operations,
68,441
1.30
1.10
Planning & Design, 82,203
0.90
Highway & Other Heavy
Construction, 49,389
0.70
0.50
Equipment & Materials,
7,349
0.30
0.10
-4.0%
-3.0%
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
Average Annual Growth Rate 2000-2004
Highway & Other Heavy Construction
Equipment & Materials
Maintenance & Operations
Planning & Design
4.0%
Southern California Region
1.60
Source: EDD/LMID, California Regional Economies Employment Series
Maintenance & Operations,
23,700
2004 Employment Concentration Relative to California Employment
1.40
1.20
Equipment & Materials,
4,300
1.00
Highway & Other Heavy
0.80
Construction, 13,800
Planning & Design, 13,500
0.60
0.40
0.20
0.00
-4.00%
-3.00%
-2.00%
-1.00%
0.00%
1.00%
2.00%
Average Annual Growth Rate 2001-04
Highway & Other Heavy Construction
Equipment & Materials
Maintenance & Operations
Planning & Design
3.00%
Southern Border Region
Source: EDD/LMID, California Regional Economies Employment Series
2.00
Planning & Design, 5,600
2004 Employment Concentration Relative to California Employment
1.80
Highway & Other Heavy
1.60
Construction, 4,900
1.40
Equipment & Materials, 900
1.20
Maintenance & Operations,
1.00
2,400
0.80
0.60
0.40
0.20
-3.00%
0.00
-1.00%
1.00%
3.00%
5.00%
7.00%
9.00%
11.00%
13.00%
Average Annual Growth Rate 2001-04
Highway & Other Heavy Construction
Equipment & Materials
Maintenance & Operations
Planning & Design
15.00%
Mining the analyses of the Economic Strategy
Panel and Regional Economies Project can focus
international trade and investment targets.
• International trade
– Targeted trade shows and missions
– Sub-regional specialization
• Foreign direct investment
– Sub-regions
– Industries
– Technologies
– Strategic alliances
– Joint ventures
Leveraging the building blocks of comparative
advantage provides a means to grow and sustain
California’s economic prosperity.
PROSPERITY
DIVERSITY
COMPETITIVENESS
INNOVATION
.
A global model for
an innovative and integrated goods &
people movement transportation system
Export-orientated value chain that leverages its
specialization in
the development & operation of
advanced infrastructure systems
A WORLD CLASS INFRASTRUCTURE VALUE CHAIN
Sustainable & secure infrastructure system
that maximizes life-cycles, preserves the
environment, and protects human health
A skilled and diverse workforce
that can meet the demands of an advanced
infrastructure system
California’s diversity of people, regions, and industries
coupled with the state’s world-class research
institutions provides an environment for leadership in
innovation.
Innovation Measure
Amount
U.S. Ranking
Number of High tech Workers
905,000
1st
Average High Tech Annual Salary
$90,600
1st
Statewide High Tech Payroll
$81.9 Billion
1st
Number of High Tech Establishments
41, 900
1st
High Tech Exports
$47.8 Billion
1st
Venture Capital Investment
$10.4 Billion
1st
Research and Development Expenditures
$59.7 Billion
1st
Semiconductor Manufacturing Employment
66,800
1st
Computer and Peripheral Equipment Employment
60,200
1st
Electronic Component Manufacturing Employment
49,300
1st
Source: American Electronics Association. Cyberstates 2006
Innovation is driven by California’s small and mid-sized
businesses which employ nearly 80 percent of the
state’s workforce.
Employees by Size of Firm
2,500,000
2,000,000
Employees
1,500,000
1,000,000
500,000
0
0-4
5-9
10-19
20-49
50-99 100-249 250-499 500-999 1000+
Size of Firm
Source: Employment Development Department
Innovation and productivity gains among California’s
industries result from redefining the processes and
the inter-relationships among the components of the
value chain.
Primary Activities
Inbound
Logistics
Operations
Outbound
Logistics
Marketing
and Sales
The Value Chain
Procurement
Human Resource Management
Infrastructure
Technological Development
Support Activities
Source: Michael Porter
Services
Global trends will force all industries to rethink their
contribution to the value chain and how best to sustain
competitive advantage.
Volume of Trade: 2004 and 2020
1,776 2,557
Seattle
1,798
59,420
15,835
4,478
4,396
NY/NJ
Tacoma
2,043
5,566
1,809
3,382
Virginia
Oakland
6,639
1,860
Charleston
13,101
6,165
(TEUs in
thousands)
2004
2020
9,420
1,437
Houston
LA/LB
Source: U.S. Department of Transportation
1,010 2,152
Miami
1,662
Savannah
Working with the Consular Corps, the State of
California and its local partners will be better
positioned to provide information that improves the
likelihood of mutual job creation.
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Trade shows
Trade missions
Trade transactions
Collaborative efforts
Strategic alliances
Joint ventures
Direct investment
Working together, the virtuous cycle for growing
mutual prosperity is within reach.
PROSPERITY
DIVERSITY
COMPETITIVENESS
INNOVATION
World Leader in Innovation
• California has more than twice as many technology jobs
as second-place Texas.*
• $10.43 billion of venture capital in 2005, 48% of United
States total.*
• Over 63,000 students in science and engineering
graduate programs**
• Ranked #1 in patents awarded (703) to academic
institutions in 2003.**
• 102,202 new business incorporations in 2004.***
* American Electronics Association.
** National Science Foundation.
*** California Department of Finance.
To Take Away
• California is a global market force.
• California’s diversity means mutual
economic prosperity
• California is a leader in innovation.
• California is an integrated system of
several diverse regional economies.
• California is open for business.
California is a Global Player
In 2004, California’s gross domestic product was over
$1.55 trillion
CA Gross Domestic Product as Percent of US Total
13.40%
13.29%
13.24%
13.20%
13.10%
13.17%
13.00%
Percentage
13.00%
12.86%
12.80%
12.52%
12.60%
12.40%
12.37%
12.20%
12.00%
11.80%
1997
1998
1999
2000
2001
Year
2002
2003
2004
California is Global Player
California is the world’s 8th largest economy.
12000
Country
GDP*
11000
United States
11,668
10000
Japan
4,623
Germany
2,714
United Kingdom
2,141
France
2,003
Italy
1,672
China
1,649
California
1,551
Spain
991
Canada
980
Billions of US $
9000
8000
7000
6000
5000
4000
3000
2000
* billions of US dollars
1000
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Source: World Bank. World Development Indicators. 2004 GDP.