Economic Development

The purpose of ABAG's Economic Development Program is to collaborate with regional agencies, local jurisdictions, business groups, and community-based and non-governmental organizations to strengthen the competitiveness of the regional economy, enhance local business districts in PDAs, address goods movement and industrial land, expand access to opportunities for all Bay Area residents, and develop economic development policies for the next update to Plan Bay Area. As a first step, ABAG will conduct a summary synthesis of high-consensus strategies from key economic and workforce development reports to inform a regional economic program.

Key Reports to Inform the Regional Economic Program

This set of reports was requested by the ABAG Executive Board on January 15th, 2015, when staff presented a draft framework of what ABAG could do to support regional economic development, a priority identified in Plan Bay Area and the Joint Policy Committee. The Board directed staff to begin the process of scoping a comprehensive, orderly and inclusive process to assemble and document a Regional Economic Development Framework, drawing in large part from existing work in this area. The intent of this framework is to elevate and support common themes and strategic solutions from various organizations throughout the region, improve our understanding of the structure of the local and regional economy, and to identify what specific actions ABAG can take to advance regional economic prosperity.

Regional Economic Strategy Process – Bay Area Council Economic Institute (BACEI)

As part of the Regional Economic Strategy process, the Bay Area Council Economic Institute in partnership with ABAG and MTC has led five sub-regional meetings that have highlighted local best practices in economic development and identified local priorities and concerns. Possible regional-level strategies were discussed that would support or complement local efforts. These sub-regional meetings have included local leaders and economic development organizations, with representation from entities focusing on business, workforce development, transportation, and education. Five sub-regional meetings have taken place to date in the North Bay, San Francisco, the East Bay, Santa Clara County, and San Mateo County. A sixth meeting is currently being planned for Solano County. The findings from that discussion will be integrated into this summary document.

Each meeting addressed two broad questions: 1) What best practices and initiatives in support of economic vitality are taking place at the local level and have proven outcomes? 2) What potential regional-level actions do local leaders see as helpful to their own efforts? The following memo highlights the economic development themes that emerged over multiple meetings:
http://abag.ca.gov/planning/pdfs/RES_Memo_BACEI_Aug2014.pdf

Economic Prosperity Strategy

The San Francisco Bay Area is in the midst of a strong recovery from the past decade’s economic downturn. However, the benefits of prosperity are not universally shared. In the Bay Area, more than 1.1 million workers — over a third of the total workforce — earn less than $18 per hour.

How can we make sure the region’s rising economic tide does more to lift all boats? The Economic Prosperity Strategy identifies a comprehensive, three-pronged approach to providing greater economic mobility to low- and moderate-wage workers in the Bay Area. First, create pathways that will help lower-wage workers move into middle-wage employment. Second, promote economic growth with an emphasis on middle-wage jobs — to ensure that there are sufficient opportunities for moving up. And third, improve the quality of jobs and economic conditions for lower-wage workers.

Another goal was not to develop prescriptive recommendations, but strategies for regional consideration that represent the diversity of perspectives in the nine county Bay Area. The research, outreach and drafting of the Economic Prosperity Strategy was carried out by a core team of four organizations informed by outreach to businesses, economists, local jurisdictions and labor including SPUR, Center for Continuing Study of the California Economy (CCSCE), San Mateo County Union Community Alliance, and Working Partnerships USA.

The strategies outlined in this report are grounded in the key findings. The study found that the continued success of the Bay Area economy requires growing middle-wage jobs and offering lower-wage workers more opportunities to advance. The region faces a number of critical issues in improving upward mobility for lower-wage workers.

The full report can be found here:
http://www.spur.org/publications/spur-report/2014-10-01/economic-prosperity-strategy

Regional Goods Movement Plan Update – Preliminary Findings

Goods movement is a critical piece of the region’s transportation system, supporting a strong economy and providing residents and businesses with the products they need. Goods movement activities create a diverse array of jobs, and generate tax revenues to support crucial public investments. At the same time, goods movement activities have significant environmental and public health impacts on those communities located in close proximity to goods movement activities. Plan Bay Area, the region’s regional transportation plan and sustainable communities strategy, identifies goods movement as a key work item to advance as part of Plan implementation and to develop further for the Plan update in 2017.

MTC is developing an update to the Regional Goods Movement Plan. The regional work is being closely integrated with the Alameda County Transportation Commission’s (ACTC) countywide goods movement planning effort, as well as the ongoing state and federal freight planning and policy activity to ensure consistency among all plans and to provide a more complete picture of the goods movement system in the Bay Area. In collaboration with ABAG, the goods movement effort involves updating the regional and subregional analysis of goods movement in terms of the transportation system, land use requirements, and air quality implications.

General information on the Regional Goods Movement Plan update can be found here:
http://www.mtc.ca.gov/planning/rgm/

A staff presentation on the Needs Assessment currently underway can be found here:
http://apps.mtc.ca.gov/meeting_packet_documents/agenda_2341/5_Freight_Memo_and_PowerPoint.pdf

Industrial Land and Job Study – Summary Scope of Work

UC Berkeley, ABAG, and MTC are collaborating on an Industrial Land and Job Study to complement the 2015 MTC Goods Movement Needs Assessment. This study will analyze the demand for and supply of industrially zoned land in the nine-county region, both now and in the future. Today, the diversity of industrial activities—a broad category that includes not only manufacturing jobs but transportation and warehousing, wholesale, and some business services as well—within the nine-county Bay Area has important implications for regional sustainability and jobs. Locating wholesale distributors in particular near major trading ports and city centers, on industrial lands where space is relatively more affordable, provides access to key local markets and helps ensure the efficient movement of goods. Further, the Bay Area’s lighter "maker and artisanal goods" industries gain productivity benefits from clustering in the core. The relocation of goods movement-dependent and other industries to outlying areas—a trend that is already occurring—has economic impacts and significantly increases vehicle miles traveled (VMT) from trucks (Hausrath Economics Group and Cambridge Systematics 2008). Relocation of these firms may also increase VMT for workers, should their job accessibility decrease, or result in a loss of employment if the firm moves outside the Bay Area altogether.

This study will examine the potential for industrially zoned land to be converted, as well as the likely economic and VMT impacts of conversion. After an assessment of the effectiveness of the different types of industrial zones found in the region, the study will conclude by developing strategies for industrial land that support the policy and planning approaches under development by MTC / ACTC for sustainable goods movement in the region. UC-Berkeley will lead the technical analysis. ABAG and MTC will collaborate actively in research design, evaluation of results, and design of strategies.

This joint UC Berkeley/ABAG/MTC study links to the MTC Goods Movement Needs Assessment in its goals (in particular, to increase economic growth and coordinate local land use with goods movement); its opportunities (to support emerging industries and integrated planning); and issues of concern (such as land use conflicts, air quality impacts, and concerns about loss of industrial land). It also fills gaps in the MTC study, which does not analyze the supply and demand for industrially zoned land, the relationship to economic and employment growth, and the issue of land conversion. The results of the UC-Berkeley/ABAG/MTC study will be integrated with the MTC Goods Movement Needs Assessment.

Roles:

UC Berkeley is responsible for the core research. MTC and ABAG are contributing staff time to help coordinate and support compatibility with the Goods Movement study, which is well underway. Both studies are anticipated for completion by the end of the year.

Key Tasks:

• Analyze the function of and demand for industrially zoned land in the economy of today and tomorrow, in light of changes in technology and global trade;
• Describe the current supply, occupancy rates, and location of industrially zoned land, and develop a typology of businesses currently located on industrial land that includes their projected space needs, growth trends and location in the region;
• Identify likelihood of industrially zoned land to be lost or converted to other uses for reasons such as demand from more profitable uses that can pay more for space, obsolescence of industries, new developments arising nearby in a context of liberal industrial land use controls, and so forth.
• Analyze the economic, employment and transportation impacts of land conversion on job quality and accessibility, other industry sectors, and VMT (based on estimates of employee travel and goods movement),
• Assess effectiveness of different types of industrial zones at protecting industrial/PDR uses (where warranted). Local zoning regulations (such as manufacturing, mixed use, or industrial protection zones) across the nine-county region differ in their ability to protect PDR uses.
• Estimate future needs for industrially zoned land and develop strategies for preserving industrially zoned land, as needed, to support the policy and planning approaches under development by MTC / ACTC to support sustainable goods movement in the region.

Summaries and Links to Other Bay Area Economic Development Organization Reports

• Bay Area Council Economic Institute (BACEI) Regional Economic Assessment. This study finds that the Bay Area enjoys unique economic assets that have enabled it to prosper across economic cycles. It also finds growing economic inequality, and a risk that significant parts of the population won’t share in the region’s general economic success. The study asks, despite the region’s present economic strength, could its economy be even stronger and generate more jobs for its residents if a number of challenges could be overcome including housing cost and availability, congestion, regulatory efficiency, and a lack of strategic focus on regional economic priorities. It finds that there is a need for a more effective partnership between business and government on economic issues, and is designed to provide a shared foundation of facts and analysis which both government and business can build a closer strategic partnership.
  http://www.bayareaeconomy.org/media/files/pdf/BAEconAssessment.pdf
• East Bay Economic Development Alliance (EBEDA) Building on our Assets: Economic Development and Job Creation in the East Bay. The purpose of this report is to better understand the dynamics of the East Bay economy to identify the East Bay region’s opportunities and challenges for future growth. The project team conducted an in-depth analysis of employment, business, workforce, infrastructure, and land use characteristics, augmented with interviews with business executives. On the basis of the analyses, this study provides recommendations for elected officials, workforce development and education board members, city managers, city and regional planners, economic development specialists, regional agency commissioners, state officials, business leaders and other decision-makers to plan for a prosperous region.
  http://www.eastbayeda.org/ebeda-assets/reports/2013/Econ%20Report_Building_on_Our_Assets_Report_2011.pdf
• Joint Venture Silicon Valley Index. This report finds that Silicon Valley is experiencing a level of innovation and economic activity that is impressive by any standard, and leads the nation. Yet the region also shows stark income and achievement gaps, and faces considerable challenges in accommodating sustained economic growth.
  http://www.jointventure.org/images/stories/pdf/index2014.pdf
• Silicon Valley Community Fund, Community Economic Development Brief. This brief represents a summary of important trends and issues related to community economic development.
  http://www.siliconvalleycf.org/sites/default/files/CEDBrief_web.pdf
• Northbay Leadership Council / Mckinsey, Education to Employment Designing a System that Works. Around the world, governments and businesses face a conundrum: high levels of youth unemployment and a shortage of job seekers with critical skills. How can a country successfully move its young people from education to employment? What are the challenges? Which interventions work? How can these be scaled up? These are the crucial questions this report attempts to answer.
  Executive Summary
  Full Report
• Tri-Valley Rising: Its Vital Role in the Bay Area Economy. An examination of the Tri-Valley's assets and the transportation investments required for sustaining economic success. http://www.bayareaeconomy.org/media/files/pdf/BACEI_Tri_Valley_report.pdf
• BACEI, Reforming California Public Higher Education for the 21st Century. This Bay Area Council Economic Institute White Paper assesses the changing environment for public higher education in California, and the changes required in the University of California, California State University and California Community Colleges systems to ensure that the state will continue to generate a globally competitive workforce.
  http://www.bayareaeconomy.org/media/files/pdf/ReformingCApublicHigherEdWhitePaperDec2014.pdf
• League for Innovation in the Community College, Role of Community Colleges in Regional Economic Prosperity. In many regions in North America, community and technical colleges serve a critical role in supporting, and often lead, regional economic prosperity planning and collaboration. In this monograph, leaders from League for Innovation in the Community College member institutions share creative examples of how they are helping to advance economic prosperity in their regions.
  http://www.league.org/publication/files/Regional_Economic_Prosperity.pdf
• BACEI, In The Fast Lane: Improving Reliability, Stabilizing Local Funding, and Enabling the Transportation Systems of the Future in Alameda County. This report is an exploration of Alameda County's transportation systems, how they are funded, what role they play in supporting economic growth, and what changes are needed to ensure a prosperous future. This report also provides an overview of the proposed TEP and how it addresses the region’s current and future needs.
  http://www.bayareaeconomy.org/media/files/pdf/BACEI_InTheFastLane_Report_20140627.pdf

As a next step, we will distribute a selection of reports from local economic development organizations, to ensure that economic development efforts at the local level are acknowledged as well.