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Framing International Trade Opportunities through the Regional Economies Project. Barry R. Sedlik Business, Transportation and Housing Agency International Trade Partnership Meeting October 4, 2006. - PowerPoint PPT Presentation
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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.
• 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
Legislature Cabinet
LW&D BT&H CDFA
Cabinet
LW&D BT&H CDFA
CaliforniaEconomic Strategy
Panel
Technical AdvisoryGroup
CaliforniaWorkforce Investment
Board
California RegionalEconomies Project
California Economic Development Partnership
California Partnership for the San Joaquin Valley
Proposed Network of Regional and Economic Development
Organizations (Local leaders representing business, community and civic interests)
Economic Vitality Conversation Partners
California Partnership for International Trade
March, 2006
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.
The state’s economic development activities are based upon the building blocks of comparative advantage.
Business, Transportation and Housing Agency
Building Blocks of California’sEconomic Comparative Advantage
Research Excellence and K nowledge Base
Magnet for Innovation
Competitive-Advantage Industry Clusters
Drivers of Economic Growth
Infrastructure and Smart Growth
Quality of Life
Efficient Government and Regulations
Culture of Accountability
Effective Governanceand Civic Leadership
Stability for Economic Development
Business, Transportation and Housing AgencyBusiness, Transportation and Housing Agency
Building Blocks of California’sEconomic Comparative Advantage
Research Excellence and K nowledge Base
Magnet for Innovation
Competitive-Advantage Industry Clusters
Drivers of Economic Growth
Infrastructure and Smart Growth
Quality of Life
Efficient Government and Regulations
Culture of Accountability
Effective Governanceand Civic Leadership
Stability for Economic Development
Business, Transportation and Housing Agency
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 (Examples)
OCCUPATIONS(Examples)
Planning & Design
Engineering ServicesEnvironmental Consulting ServicesSurveying & Mapping (except Geophysical) ServicesRegulation & Administration of Transportation Program
Civil EngineerCost EstimatorFinancial SpecialistLandscape ArchitectsGeodetic SurveyorMapping Technician
Equipment & Materials
Construction Equipment Construction Machinery ManufacturingAsphalt Paving Mixture & Block ManufacturingConstruction Sand & Gravel Mining
Blow Torch OperatorWelding Machine OperatorTeam AssemblerMachine BuilderMotor Installer
Highway & Other Heavy Construction
Highway Street & Bridge ConstructionHeavy & Civil Engineering Construction
Construction LaborerLandscaping WorkerGeneral ContractorConcrete Finisher
Maintenance & Operations
Urban Transit SystemsAirport OperationsSupport Activities for Water TransportationSupport Activities for Rail Transportation
Operations ManagerMachine Operator Mobile Heavy Equipment MechanicCargo 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.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Bay Area Central Coast Central Sierra Greater
Sacramento
Northern
California
Northern
Sacramento
Valley
San Joaquin
Valley
Southern
Border Region
Southern
California
Highway & Other Heavy Construction Equipment & Materials Maintenance & Operations Planning & Design
Source: EDD/LMID, California Regional Economies Employment Series
Each sub-sector has innovation components which form the basis for new industries and international trade and investment opportunities.
California Statewide
Highway & Other Heavy
Construction, 49,389
Equipment & Materials,
7,349
Maintenance & Operations,
68,441
Planning & Design, 82,203
0.10
0.30
0.50
0.70
0.90
1.10
1.30
1.50
-4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0%
Average Annual Growth Rate 2000-2004
200
4 Em
ploym
ent C
onc
entr
atio
n Rel
ativ
e to
US E
mpl
oym
ent
Highway & Other Heavy Construction Equipment & Materials Maintenance & Operations Planning & Design
Source: Bureau of Labor Statistics, Quarterly Census of Employment and Wages
Southern California Region
Highway & Other Heavy
Construction, 13,800
Equipment & Materials,
4,300
Maintenance & Operations,
23,700
Planning & Design, 13,500
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
-4.00% -3.00% -2.00% -1.00% 0.00% 1.00% 2.00% 3.00%
Average Annual Growth Rate 2001-04
2004
Em
ploy
men
t C
once
ntra
tion
Rel
ativ
e to
Cal
iforn
ia E
mpl
oym
ent
Highway & Other Heavy Construction Equipment & Materials Maintenance & Operations Planning & Design
Source: EDD/LMID, California Regional Economies Employment Series
Southern Border Region
Highway & Other Heavy
Construction, 4,900
Equipment & Materials, 900
Maintenance & Operations,
2,400
Planning & Design, 5,600
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
-3.00% -1.00% 1.00% 3.00% 5.00% 7.00% 9.00% 11.00% 13.00% 15.00%
Average Annual Growth Rate 2001-04
2004
Em
ploy
men
t C
once
ntra
tion
Rel
ativ
e to
Cal
iforn
ia E
mpl
oym
ent
Highway & Other Heavy Construction Equipment & Materials Maintenance & Operations Planning & Design
Source: EDD/LMID, California Regional Economies Employment Series
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.
DIVERSITY
INNOVATIONCOMPETITIVENESS
PROSPERITY
Export-orientated value chain that leverages its specialization in
the development & operation of advanced infrastructure systems
A global model foran innovative and integrated goods &
people movement transportation system
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
A WORLD CLASS INFRASTRUCTURE VALUE CHAIN
.
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. RankingNumber 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.
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
0-4 5-9 10-19 20-49 50-99 100-249 250-499 500-999 1000+
Size of Firm
Employees by Size of Firm
Employees
Source: Employment Development Department
InboundLogistics Operations
OutboundLogistics
Marketingand Sales Services
The Value Chain
Primary Activities
Support Activities
Procurement Human Resource Management
Infrastructure Technological Development
Source: Michael Porter
Innovation and productivity gains among California’s industries result from redefining the processes and the inter-relationships among the components of the value chain.
1,4371,437
6,1656,165
(TEUs in thousands)
20202020
20042004HoustonHouston
1,0101,010 2,1522,152
MiamiMiami
2,0432,043 3,3823,382
OaklandOakland
4,4784,478
15,83515,835
NY/NJNY/NJ
1,8091,8095,5665,566
VirginiaVirginia
1,8601,860
6,6396,639
CharlestonCharleston
1,6621,662
9,4209,420
SavannahSavannah
1,7981,7984,3964,396
TacomaTacoma
1,7761,776 2,5572,557
SeattleSeattle
Global trends will force all industries to rethink their contribution to the value chain and how best to sustain competitive advantage.
Source: U.S. Department of Transportation
LA/LBLA/LB
59,42059,420
13,10113,101
Volume of Trade: 2004 and 2020
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.
• 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.
DIVERSITY
INNOVATIONCOMPETITIVENESS
PROSPERITY
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
CA Gross Domestic Product as Percent of US Total
12.37%
12.52%
12.86%
13.24%
13.00%13.10%
13.17%
13.29%
11.80%
12.00%
12.20%
12.40%
12.60%
12.80%
13.00%
13.20%
13.40%
1997 1998 1999 2000 2001 2002 2003 2004
Year
Per
cen
tag
eIn 2004, California’s gross domestic product was over
$1.55 trillion
California is Global PlayerCalifornia is the world’s 8th largest economy.
Country GDP*United States 11,668
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
Source: World Bank. World Development Indicators. 2004 GDP.
* billions of US dollars
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
10000
11000
12000
Bill
ion
s o
f U
S $