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

4. Clusters of Opportunity Export Oriented Population Driven Career Potential Cluster of Opportunity

5. Bridging Workforce and Economic Development Goals Workforce Development Cluster of Opportunity Economic Development

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

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

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

9. Health Care Career Potential High31% Med44% Low25% Occupational Level

10. Leveraging The Rural Experience 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 Distinctive, Regional Quality of Life Experience Natural PlacesHistory, Culture Education Specialty Food, Beverages, Retail Leisure Sightseeing Tours Recreation Camping Museums Art galleries Live events Educational (ag-tourism) Full service restaurants Wineries Specialized retail Amusements Gambling Golf Spectator sports Long-term, Recent, & Potential Residents Current & Potential Visitors

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

12. Value Chain Linking Goods, Services, and Experiences AssetsGoodsServicesExperiences NaturalFilm, sunscreen Equipment rentals Tours, educational programs HistoricSouvenirsHistoric lodgingInteractive sites, museums CulturalRegional craftsRegional cuisineFestivals, performing arts

13. From Commodities to Experiences CommoditiesGoodsServicesExperiences GrapesWineWine clubsTasting rooms/tours Packaging/ shipping Food and wine events Vacation packages Educational programs

14. Estimated 30% of Rural Job Growth From Leveraging Rural Experience

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

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

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

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

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

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

23. Self-employment is growing faster than wage and salary employment 0.8 0.9 1 1.1 1.2 1.3 1.4 1990199119921993199419951996199719981999200020012002 Wage and salary employment Non-farm self-employment Indexed regional farm and non-farm self-employment compared with total wage and salary jobs in the Sacramento Valley Region, 1990 - 2002 Source: US Bureau of Economic Analysis

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

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

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

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