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Employment Trends and Cluster Opportunities
Presented to the Steering Committee for the Los Angeles and Orange County Regional Consortium
November 14, 2006
Research Objectives
Primary Objectives:Evaluate the economic environment in the
LAOC region as it relates to supply and demand for workers
Identify key clusters in the regions and examine growth, wages, and regional concentration
Determine which clusters and areas of research should be considered in the future
Regional Economic Outlook
Employment: Steady employment growth forecast, with stronger growth in
the service sectors
Unemployment (August 2006): US - 4.7% California - 4.9% Los Angeles County - 5.1% Orange County - 3.6%
Issues in the regional economy: Depreciation of the dollar Regional infrastructure for trade (short and long-term) Agreement to cut greenhouse gasses Rising interest rates and inflation Housing affordability
Industry Clusters
Definition:“A concentration of companies and industries in a geographic region, which are interconnected by the markets they serve and the products they produce, as well as the network of suppliers and key economic foundations such as research universities, capital, physical infrastructure and labor market.”
Source: California Regional Economies Project
Why are Clusters Important: Drivers of the regional economy Require focused workforce development strategies Opportunities for strategic planning and employer
collaboration with the community colleges
Industry Clusters I
1. Apparel Design and Manufacturing: includes businesses that design and manufacture textiles, apparel and footwear;
2. Construction: includes firms that provide residential, commercial, and heavy-duty infrastructure construction services;
3. International Trade and Logistics: includes firms that are engaged in or support the transportation and warehousing of products;
4. Motion Picture and TV Production: includes businesses that produce and support the production of movies, radio, television, and music;
5. Tourism and Entertainment: includes firms that provide a broad array of visitor and leisure services, including eating and drinking establishments, hotels, amusement parks, and transportation services for visitors.
Industry Clusters II
1. Business and Professional Management Services: includes a wide range of business support services, from printing and employment services, to accounting, architecture, and legal services;
2. Education: includes public and private education facilities (kindergarten through high school), colleges and universities, trade schools, and educational support services;
3. Finance, Insurance, and Real Estate (FIRE): includes firms that provide financial, insurance, and real estate services;
4. Healthcare and Medical Services: includes businesses that provide medical services, from comprehensive acute care hospitals, to medical offices, and long-term care facilities and services;
5. Public Sector (Government): includes local, state, and federal government employers, including public safety services, national security operations, and community development programs.
Industry Clusters III
1. Communications: includes businesses that provide telecommunications services and manufacture communications equipment, including audio and video equipment;
2. Computer and Electronics Manufacturing: includes firms that manufacture and support the manufacture of computers, semiconductors, and other electronic equipment;
3. Defense and Transportation Manufacturing: includes firms that manufacture transportation vehicles, including planes and ships, as well as defense contractors;
4. Energy and the Environment: includes firms that manufacture or research energy production, as well as products and services used to mitigate the environmental impact of these activities;
5. Life Sciences and Biotechnology: includes firms that are engaged in or support research, development, and production in the life sciences;
6. Software and Computer Services: includes firms that develop software and provide computer services, including Internet service providers.
Measures of Employment & Concentration in LAOC
High Employment/ High Concentration Industry Clusters
Emp. Conc.
Business & Professional Mgt. Svcs. 11.1% 1.18
Tourism, Travel, & Entertainment 11.1% 1.10
Finance, Insurance, & Real Estate 6.7% 1.21
Life Sciences & Biotechnology 4.2% 1.11
See pages 12 – 16 in the memo for a more comprehensive display of proportional employment and concentrations in the LAOC region
Measures of Employment & Concentration in LA
Low Employment/ High Concentration Industry Clusters
Emp. Conc.
Apparel Design & Mfg. 2.1% 2.48
Defense & Transportation Mfg. 1.8% 1.58
Communications 1.0% 1.04
Energy & the Environment 0.5% 1.28
See pages 12 – 16 in the memo for a more comprehensive display of proportional employment and concentrations in the Los Angeles County
Measures of Employment & Concentration in OC
High Employment/ Low Concentration Industry Clusters
Emp. Conc.
Healthcare & Medical Services 7.1% 0.87
Public Sector (Government) 3.6% 0.45
See pages 12 – 16 in the memo for a more comprehensive display of proportional employment and concentrations in Orange County
Expected Employment Growthin LAOC, 2005 - 2012
Apparel
Logistics
MP & TV
Tourism & Travel
Construct.Non-Clustered
80
90
100
110
120
2005 2006 2007 2008 2009 2010 2011 2012
Year
Ind
ex
Index: 2005 = 100
Industry Clusters I
Expected Employment Growthin LAOC, 2005 - 2012Industry Clusters II
Business Services
FIRE
Healthcare
Public Sector
Education
Non-Clustered
100
105
110
115
2005 2006 2007 2008 2009 2010 2011 2012
Year
Ind
ex
Index: 2005 = 100
Expected Employment Growthin LAOC, 2005 - 2012Industry Clusters III
Life Sciences
Energy & Env.
Software & Computer Services
C & E Manufacturing
Communications
Defense
Non-Clustered
90
100
110
120
130
140
2005 2006 2007 2008 2009 2010 2011 2012
Year
Ind
ex
Index: 2005 = 100
Expected Employment Growthby County, 2005 - 2012
LA OC LAOC
Software & Computer Services 31.9% (1) 39.2% (1) 34.5% (1)
Tourism, Travel & Entertainment 13.4% (2) 21.1% (2) 15.7% (2)
Life Sciences & Biotechnology 12.5% (3) 14.3% (6) 13.1% (3)
Business & Professional Management Services 8.7% (5) 18.7% (3) 11.9% (4)
Computer & Electronics Manufacturing -4.6% (14) -2.6% (14) -3.2% (14)
Communications -4.3% (13) -5.2% (15) -4.1% (15)
Apparel Design & Manufacturing -17.0% (16) -22.2% (16) -17.8% (16)
Non-Clustered 5.30% 8.50% 6.20%
All Industries 5.40% 8.40% 6.50%
Industry Cluster
Expected Employment Growth 2005 – 2012 (Rank)
See page 16 in the memo for the complete table
Emerging Clusters
Video Gaming and Entertainment Technology• Strong presence in the region – 50% of California
companies in LAOC• Strong employment growth expected• Opportunities for local community colleges to support future
growth in the industry
Computer & Information Security• Strong short-term employment growth expected• Opportunities for Database Security Engineers & Data
Security Analysts
Homeland Security & Nanotechnology• Findings indicate potential for employment growth and
opportunities for community colleges to help support the growth of these clusters through local workforce development
Clusters to Focus on in Future Research I
1. Energy & the Environment:• Review and Revise cluster definitions• Reevaluate growth expectations due to the current
legislative and economic environment• Identify sub-sectors and occupations with strong growth
expectations• Determine appropriate strategies and programs for
community colleges
2. Software & Computer Services:• Identify sub-sectors• Identify work that is being outsourced and why employment
concentration is low for the region• Identify work that is growing within the region• Determine growth occupations• Determine skill-sets of importance
Clusters to Focus on in Future Research II
3. Business & Professional Management Services:• Identify sub-sectors and occupations with strong growth
expectations• Work with employers to determine appropriate strategies
and programs for community colleges
4. Public Sector:• Evaluate workforce needs taking into account the high level
of expected retirements in this cluster• Identify sub-sectors and occupations most affected by
forthcoming retirements• Determine the composition of the local workforce• Identity key skills-sets• Work with employers to determine appropriate strategies
and programs for community colleges
Clusters to Focus on in Future Research III
5. Life Sciences & Biotechnology:• Define the industry cluster • Assess demand for manufacturing and technical workers in
the region• Identify work that may be outsourced and work that is
growing within the region• Determine key skill-sets/ areas of specialization• Work with employers to determine key training
requirements
6. Travel, Tourism, and Entertainment:• Identify higher-paying sub-sectors and occupations• Determine the types of programs which could be developed
by local community colleges• Identify strategies to effectively collaborate with employers• Identify and implement career-ladder programs in the
industry
Clusters to Focus on in Future Research IV
7. Motion Picture and TV Production (LA Only):• Identify sub-sectors and occupations with strong growth
expectations• Identify work that is being outsourced and work that is
growing within the region• Determine key skill-sets/ areas of specialization• Identify and implement career-ladder programs in the
industry• Work with employers to determine appropriate strategies
and programs for community colleges