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

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

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

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

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

6. HEADLINE ECONOMIC FACTS Bay Area Regional Economic Assessment

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 County % of Residents that Work in County % of Employees that Live in County Solano3639 Contra Costa3951 San Mateo40 Marin4139 Alameda4947 Napa5552 San Francisco6040 Sonoma6371 Santa Clara7161 Regional Average5351

15. 8. Business Starts are The Basis for Growth

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

17. SOURCES OF PROSPERITY Bay Area Regional Economic Assessment

18. Highly Educated Labor Force

19. Venture Capital Source: PriceWaterhouseCoopers MoneyTree Q4-2011 Value of All Deals (Millions) % of Total US VC Bay Area3,04146 California3,77958 United States6,565

20. Culture of Innovation

21. IMPEDIMENTS TO GROWTH Bay Area Regional Economic Assessment

22. High Housing Prices

23. Business Views Business Climate/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 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. LOW AND MODERATE INCOME COMMUNITIES Bay Area Regional Economic Assessment

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 Commutes are comparable to (a little longer than) average non-LMI commutes Employment is relatively concentrated in: Employment is relatively concentrated in: – Retail trade (13.6%), health care (11.4%), accommodation and food srvcs (11.3%) Occupations 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 Numbers and shares of Bay Area households in LMI categories are growing

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

30. POPULATION AND ECONOMIC FUTURES Bay Area Regional Economic Assessment

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 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 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?? 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 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 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 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 Bay Area job growth led by technology and innovation sectors, trade and tourism Firms in technology report increasing difficulty in finding skilled workers 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 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. BROAD RECOMMENDATIONS Bay Area Regional Economic Assessment

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

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