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Home My WebLink About7.1 Tri- Valley Council Fund CITY CLERK File # D[2][QJtlH2][ð] AGENDA STATEMENT CITY COUNCIL MEETING DATE: December 20, 2005 SUBJECT: Budget Amendment for FY 2005-06 Tri- Valley Business Council Funding Reporl Prepared by; Christopher L. FO.H, Economic Development Direäor RECOMMENDATION: I. Preserving Prosperity Report - 2005 2. Budget Change Form # Approve the budget change form in the amount of $15,000 to \ contribute to the Tri- V a1ley Business Council for PY 2005-06. ATTACHMENTS: FINANCIAL STATEMENT: This item will require a transfer of $15,000 from the Unappropriated General Fund Reserves to the Economic Development Budget (001- 90400.740.000) DESCRIPTION: The Tri-Valley Business Council (TVBe) was formed in 1994 as a non- profit, private sector group of businesses and organizations located in the cities of Danvil1e, Dublin, Livermore, Plcasanton and San Ramon. The mission of the TVBC is to represent the private sector on regional issues that impact the economic vitality and/or quality of life for Tri-Valley residents. The TVBC also works with local governments on community issoes, such as housing, agriculture, transportation, etc. The Tri-Valley Business Council has two organizations. The Tri-Valley Business Council is a 501(c)(6) non-profit organization. Membership dues pay all operating ei<penses of the Business Council. The Business Council also includes the Tri- Valley Business Council Educational Collaborative, which is a 501 (c)(3) non-profit. All of the Business Council's programs are run through this organization and are funded by contributions from foundations, corporations and local, state or federal organizations. The funds are administered separately. The cities (Dublin, Danville, Livermore, Plcasanton, and San Ramon) and counties (Alameda and Contra Costa) are not members of the Tri-Valley Business Council. When the Business Council originated the Vision 2010 Project in 1999, each of the local jurisdictions was asked to contribute to the cost of the project, and the Business Council has asked for continued support for the annual programs and studies connected to the Vision 2010 Project. ~~------------_._._....__......~~~--.--------------_.--._..._...._._~~---------------------------_.~--------- COpy TO: Page 1 of2 ITEMNO.~ G:\t::hri!i\Tri-Vallt:y Busím:ss Cuun¡;j\FORM-aget'ida statement NEW TVHC 122()2005.doc The PY 2005-06 focus of thc Tri-Valley Business Council involves implementation of the recently completed Prescrving Prospcrity Plan (see Attachment I). The foeus of the plan, which was relcased in July 2005, is to understand how industry elusters have evolved in the Tri-Valley, what new economie opportunities are emerging in the area, and how to respond to thcse changes to make surc that the region's economic viability is maintained. The plan also calls for the creation of an Ei<ceutive Roundtable that meets semi-annuaHy to determine the priorities that should be pursued to preserve the region's prosperity. The City of Dublin's representatives on this Roundtable include thc Mayor, City Manager, and Economie Development Direetor. This is one of the programs administered through the Educational Collaborative. The City of Dublin has eontributed $25,000 each year since 1999 to support programs assoeiated with the Visiun 2010 projeet. During the City of Dublin's Piseal Year 2005-06 budget deliberations, the Dublin City Couneil diseussed the Tri-Valley Business Couneil's request for $25,000 to support on-going Business Council efforts_ During thc deliberations, the City Council's diseussion centered on the difference in the funding levels for the five (5) members. It had eomc to the City Council's attention that the eities of Dublin, Livermore, Pleasanton and San Ramon all fund the Business Couneil's efforts at $25,000 annually, while the Town of Danville provides only $10,000 annually, with no apparent ei<planation for the funding difference. The City Couneil fclt that the Town of Danville has an equal voice and equal recipient in the efforts and outeomes of the Business Couneil's work and should be an equal funding partner. Due to this funding inequity, the City Couneil unanimously voted to approve $10,000 in funding for fiscal year 2005-06, with a eaveat that the funding would increase to $25,000 if the Town of Danville inereased its finaneial eommitment to the same amount. On Novembcr 1, 2005, the Danville Town Council approved Resolution No. 134-2005 approving FY 2005-06 funding of $25,000 to support the Tri-Valley Business Council (Vision 2010 Project). With the aetion of the Danville Town Council, Staff has prepared, for City Council consideration, a budget adjustment in the amuunt of $15,000 to inerease the City of Dublin's FY 2005-06 contribution to the Tri- Valley Business Council to $25,000. RECOMMENDATION: Approve the budget change form in the amount of $15,000 to eontributc to the Tri-VaHey Busincss Council for FY 2005-06. c?A2) g. / (J.~ 50 L.- Wellspring for Entrepreneurship and Innovation The Changing Economic Role and Responsibilities of the Tri- Valley Region July 2005 A Report of the Preserving Prosperity Project Tri-Valley Business Council Prepared by Collaborative Economics --:r-\-UY\ Î,' 1-¿-WOr;) Attachment 1 ï.l .,_O{",... ;d. cÖ5 "'1 CONTENTS EXECUTIVE SUMMARY ....................... ,,....................................._____..................... ................1 New Eeonomie Role, New Regional Responsibility .........................................m..................3 Tri-Valley's Changing Economic Landscape .............................______.....................................4 Rising to the Challenge: Actions to Sustain Tri-Valley's Innovation Economy................... 7 A Vision of the Future: Thc Golden Valley ............__m_____....__.............................................. 8 I. Tri-Valley's Changing Economic Landscape ....................................__.................................. 9 The Changing Landscape of Firms in the Region ______.................................................___m_____ 9 The Changing Landscape ofIndustry Specializations ................_____....................................19 II. Tri-Valley's New Economie Role and Responsibilities ......................______......................... 32 Tri-Valley's Innovation Cycle: Firms, Specializations, Habitat .........................................33 Assessing Tri" Valley's Innovation Habitat ................................_m...................................... 34 New Requircmcnts, New Questionsm__... .... ........ ........................ .............__..m.. ......... ..........44 III. Rising to the Challenge: Aetions to Sustain Tri-Valley's Innovation Economy____..........46 IV. Vision of the Future: The Golden Vallcy ...........................______........................................ 56 .3 01--/::/-1 c~ INTRODUCTION AND ACKNOWLEDGMENTS The Preserving Prosperity Project and this rcport have been made possible by the generous sponsorship of the loeal jurisdietions of Danville, Dublin, Livermore, Pleasanton, and San Ramon, the Counties of Alameda and Contra Costa, and Pacific Gas and Electric Company. The Preserving Prosperity Projcet is an initiative of the Tri-Valley Business Council, which has been assisted by a Leadership Group cornposed of publie, eorporate, and other eommunity leaders (see following page). This report describes the formation of four action teams, which have proposed outcomes and strategies for understanding 1he implications of this report and making the transition to the implementation phase of the Project. As sueh, the report is not a detailed and final strategy for implementation, but rather a first step in prioritizing outcomes and strategies. The next step is tÇJ expand participation of each team, finalize the specifie outeomes and strategies for irnplementation, and take aetion. The data and analysis in this report are the sole responsibility of Collaborative Economics. Lj Óò 59 PRESERVING PROSPERITY PROJECT LEADERSHIP TEAM The Preserving Prosperity Project has bcen supported and guided by the following Leadership Tcam members. Wc thank them for their commitment and dcdieation. Jerry Carlson Director Valley Community Bank Shiyama Clunie Area Mgr, External Affairs SBC Communications John Doyle Attorney Hogc, Fenton, Jones & Appel Linda Fish Branch Manager Robert Halflnternational Marc Fnntes Eeon. Dcv. Mgr. City of San Ramon Chris Foss Econ. Dev. Mgr. City of Dublin Joe Gabbert Sr. VP, Human Resources EMC Documentum Mike Gatzman Ag Economics Consultant Gatzman Consulting Services Charlcs G1uehowski Life Sciences Consultant Gluchowski Consulting Larry Gosselin Ranehcr & Equestrian Collier Canyon Ranch Bonnie Guttman Eeon. Dev. Coord Town of Dan vi lie Karen Halliday President Las Positas Comm. College Steven Harmon Principal Morgan Miller Blair Scott Herbert CEO Rapidwerks, lne Mike LaLumiere Exee. Director TTEC Brad McInroy VP, Operations Sybase Ken Mercer VP, Foundation ValleyCare Health System Tom O'Mallcy President Tri-Valley Business Couneil George Opacic Public Affairs Mgr. PG&E Pamela Ott Eçon. Dev. Mgr. City of Pleasanton James Paxson General Manager Hacienda Owncrs Assn. Kevin Roberts Econ. Dev. Mgr. City of Livermore Bob Sakai Dir., Technology & Trade EDAB John Schinnerer President lnfinet Assessment Bob Silva Vice President DeSilva Group Ron Stoltz Mgr., Homeland Security Sandia Natl. Labs. Mark Triska Sr. VP, Corp. Real Estate Colliers Inti Lynn Wallace Executive Director LM Valley Winegrowers Phil Wente VP, Viticulture Wente Vineyards Yaksun Wing Area Finance Mgr Kaiser Permanente Lee Younker ADD, Seiencc & Teehno10gy Lawrence Livermore NtI Lab 2 5cJ2)St1 EXECUTIVE SUMMARY New Economic Role, Ncw Rcgional Responsibility The economic role of the Tri-Valley is changing once again-a shift that both benefits and raises the stakes for the region. 1n past decades. the region has evolvedfrom agriculture and national laboratories to bedroom communities and back-office operations. In thc 1990s, Tri-Valley developed its own industry specializations in software development and support, eommunieations services and support, and scientific and biomedical devices and materials, thanks to tbe addition of branch plants of well-established technology firms based outside the region as well as new locally- based firms. Since the late 1990s, the region has evolved once again- its new economic identity a mix of industry specializations driven by a surge in homegrown entrepreneurship. The region has evolved into a high-quality, innovation economy, which requires access to highly-edueated talent, a constant flow of ideas and resources for business creation and innovation, and a superb quality of life_ This transformation has been driven by a combination of forces beyond the region's eontrol (i.e., Bay Area and global economic trends), Tri-Valley's own assets (primarily its talented population and quality of life), and leadership (public, private, and comlllunity leaders working separately and together to improve economie vitality and quality oflifc). The challenge now is to sustain and build On this initial success_ The ingredients for success arc not a given; they can erode over time_ Talented people can leave, or stop coming. Quality of life can decline. Businesses ean decide to locate elsewhere. Going forward, the region will have to ensure that the necessary talent, entrepreneurial business support, and quality oflife are in place to sustain thc rcgion's innovation-based economy--and remain competitive with other regions that are working hard to do the same. This new reality raises the stakes for the region's public. private, and other community leadership_ A new level of regional responsibility is required to sustain the eeonomic gains of thc past dccade. As this report shows, the challenge is beyond the seope of any individual organization, jurisdiction, or sector; it requires a truly regional, collaborative approach to focus on a talent pool, a quality of life, and an cnvironment for entrepreneurial support that extends across loeal boundaries. A new level of responsibility does not equate to a higher level ofloe:aJ governmentjùnding or more programs during a time offiscal distress; rather, it means a neW level of regional collaboration among existing government leader< (including local economic development directors), private sector leaders (including the Tri-Valley Business Couneil), and other community leaders (including education)-with all parties foeused on the talent, entrepreneurial business support, and quality of life necessary to sustain the region's innovation-based economy_ 3 ¿p '-':h 5"9 ,...I Are public, private, and community leaders making choices today that support or undcnnine the region's high-innovation cconomy? In the future: · Can the Tri-Valley come togcthcr as a region to do what is necessary to sustain the region's innovation economy? · Will Tri-Valley continue to have aCcess to thc talent it needs to fuel entrepreneurship and innovation if the next generation of innovators cannot afford to buy a home in the region or commute to the region in a timely manner? · Will Tri-Valley he able to remain a good location for new, small, innovative businesses if it doesn't invest in the capacity to match entrcpreneurs, resources, support, and appropriate conunereial spaee? · Will the Tri-Valley benefit from innovation in its national laboratories without a practieal and sustained effort to cneourage companies who work with the institutions to invest in the region? · Will the Tri-Valley be able to eompete with other regions for innovative talent ifit does not invest in and conncct its agricultural, reereational, cnvironmental, cultural, and other quality of life assets? Tri-Valley's Changing Economic Landscape The Tri-Valley region has become a wellspringfor entrepreneurship and innovation-a plaee where talented people choose to live in high-quality communities, creating and working in innovativc firms that serve local, regional, and global markets. In recent years, Tri-Valley has beeome a wellspring for thousands of small, homegrown eompanies that are transforming the region's eeonomic landscape-and accounting for a greater and greater sharc of regional prosperity. There arc many signs ofthe region's emerging rolc: . The rate olentrepreneurship has been mostly above the national averagejor more than a decade, reaching a new high in 2003. The region has gone from a business creation rate below the national average in the early 1990s to one well-above the national averagc by 2003. The number of business establishments per resident has boomed-from about 3 per 1,000 residents in 1990 to more than 10 by 2002. In all, more than 18,000 companies have been ereated in thc Tri- Valley since 1990. . The regional economy is now mostly a homegrown economy-dmost entirely composed oflocally-basedjinns, many of them created injust the pastfew years. About 86% of firms operating in the Tri-Valley in 2003 wcre started in the region, with only a small percentage the result of reloeations. About half of all firms in the region have startcd-up just since 1997_ 4 7 bbS7 · New, homegrown firms are the most important source ofjoh growth in the regional economy. Since J 990, new fim1s havc addcd on average about 41 % more jobs eaeh year to the regional economy than cxisting firms, and about 420% more jobs than firms relocating or ei<panding into the region. By 2003, only about 6.5% of Tri-Valley workers were employed by firms that had moved into the region. · IIomegrownfirms now accountfor more regional economic revenue than any other Source. The share of regional eeonomic revenue generated by homegrown finTIS rose about 20°;" betwcen 1990 and 2003, and now accounts for about 60% of total economic revenue generated in the rcgion. · The number of very fast growingfinns has almost tripled in the past decade. The number of firms gencrating at least $500,000 per year in revenues, and whose revenues continue to grow by at lcast 20% for four conseeutive years, grcw from about 40 finns in 1994 to more than 110 in 2003. · The role of very smallfirms (five or fewer employees) in regional prosperity has grown substantially. By 2003, these firms wcrc 80% of total firms, eompared to 75% in 1990. By 2003, they were generating 35% of the region's eeonomic revenues- well above their 26% contribution in 1990. · Very small firms are also leading the way in productivity growth. Between J 990 and 2003, firms with five or [ewer cmp10yees experienced a more than 40% inerease in revenues per employee, an indicator of productivity growth, while larger firms experienced declines. Very small firms now rank second only behind vcry large firms over 100 employees in level of revenue pcr cmployee, and well ahead of all other firms. · As a group, firms with 100 or mOre employees have lost johs since the early 1990s, while smaller.firms have gainedjohs. As a group, Tri-Valley's largest firms lost jobs every year but two sinee 1991. As a group, Tri-Valley firms under 100 employees gained jobs every ycar but onc during the same period. The growth in small-jirm entrepreneurship and innovation has fùe!ed growth and transformation of the region's industry specialization-5. · The region's largest specialization is now innovation services-a coneentration of firms that typieally help other finns bring innovation to their products and processes that nOw employs about 13% of the region's workforce and is 2V, times more coneentrated than the state average. · The region's fastest growing specialization is noW scientific and biomedical products and services, having grown 80% between 1994 and 2004. This specialization is only at 81 % ofthe state average, but has been gaining ground quickly: its concentration has increased 30% eompared to the state average over the last dceade. 5 ". ",' ,~CJ. Ct.:,-;7 · Another large and growing concentration is business operations--firms that provide basic functional services sueh as finance, insurance, legal, and other administrative support to other businesses. This is an area that has grown as larger companies outsource and smaller companies buy services rather than add employees. · The region slill has a large coneentralion of information technology product companies, including sojiware and communications technology, but one that has been restructuring and losing employment since the global downturn in technology sectors. Nonetheless, this sector remains an important part of the regional cconomy and highly concentrated in the Tri- Valley, at about four times thc state average. · These industry specializalions are drivinf{ the region's economy. Thesc four spceializations aceount for almost 40% of the region's employment base, and producc jobs and revenues in other sectors such as retail, construction, and the like. Tri-Valley's economic transformation has coincided with major shi/is in the region's occupational structure and the resident talent pool. · There has been a shift to higher-level occupations in the regional workforce. Between 1990 and 2000 Census, thc share of the Tri-Valley workforce employed in managerial and professional occupations rose anywhere from 22% to 332% depending on the category, while the share employed in sales and administrative support jobs dropped about 15%. · There ha" been a shift to a more highly-educated population. Between the 1990 and 2000 Census, the proportion of Tri-Valley residents with a bachelors degrcc or more education rose from 36% to 44%. Tri-Valley's population is far more educated than Califomia (27% with baehelors degrees or higher) or the nation as whole (24%). Every city is participaling in the transformation of the Tri- Valley economy--and are, in fact, interdependent parts of a truly regional economy_ · Firms are spread acrosS the region, rather than concentrated in just one or two locations. Twenty-nine percent of the region's firms arc based in Pleasanton, 25% in Livermorc, 21 % in Danville, 20% in San Ramon, and 10% in Dublin. · ¡ndustry specializations are widely shared among local jurisdictions, rather than concentrated in just one or two cilies. Between 1990 and 2002, no Tri-Valley city sccurcd less than 6% nor higher than 34% of the region's new businesses in innovation services, seientifie and biomedical produets and services, business operations, and information technology products. 6 9 c'?/50 Rising to the Challenge: Actions to Sustain Tri-Valley's Innovation Economy Tri-Valley's new economic role as a wellspring ofimwvation creates a new comparative advantagej;,r the region, but also raises the stakes. In response, a growing number ofTri- Valley "regional stewards" are steppingforward to sustain Tri- Valley's innovation economy_ · To succeed as a region whose comparative advantage is innovation rather than primarily strategic location or low costs, Tri- Valley must have a strong innovation "habitat "-a combination of talented people, a slIong pipeline of ideas and funding, and supportive place-based attributes sueh as housing, transportation, and quality of life. · The Tri-Valley, with such a high rale of investment in federal spendingjòr research and development, has a unique opportunity to leverage this high level o.f investment by developing an effective processjòr communication and collaboration between the National Labs, community colleges, research universities, medical centers and private industry. This must provide for exploration of opportunities for joint ventures, teehnology interchange and technology commercialization. A process must also be developed whereby industry, loeal government, national lab representatives, and reprcsentatives from higher edueation and medical centcrs eome together to strategically discuss opportunities for innovation, new technologies, ventures and industries as well as the sustainability of eurrcnt industry specializations. · Tri- Valley's puNic, private, and community leadership must recognize the region's new economic role and work together to ensure the region's success. Tri-Valley must ensure that its growing base of small firms have access to the resources they need to succeed. Action: Tri-Vallev Innovation and Entrepreneurship Strate!!v is bein!! launched to support, expand. and market the re!!ion's "innovation advanta!!e." provide a forum for innovative firms to connect with one all other. to !!et referrals to other businesses and resources. and to work with iurisdictions to eIlsure local polie1es are sunnortive of small. innovative comnanies. · Tri- Valley must leverage the innovation taking place in its national laboratories for regional economic benejìt. Action: Tri-Vallev Invest is a IICW initiative to heln interested business nartners of national laboratories exnand or otherwise invest in the re!!ion. · Tri- Valley must ensure that it has access to the talent required to fuel an innovation economy_ In particular, housing is now increasingly out of reach for the next generation of innovators, just as it has beenjor workers who are in support jobs in innovativefìrms, or in education or public safety, or other lower-paying jobs. 7 10 \) '- 0 Cty,) " Action: Tri-Vallev Talent is a new initiative to ensurc that the re!!ion is makinl!: hest use ofits existinl! talent (c.!!., spouses. retirees), removinl!: obstacles to housin!! the next !!eneration of innovators and entrepreneurs. and identlfvin!! and meetiul!: thc workforce needs ohmall. innovative firms. . Tri-Valley must keep strengthening its quality aflife, as innovative talent andjìrms flourish in high-quality settings. Action: Tri-Vallev Ouality of Life is a new initiative to cxpand and connect thc multinle assets and amenities ofthe re!!lon from al!-tourism to arts and culturc. A Vision ofthe Future: The Golden Valley Because regional stewards stepped forward in the first decade of the 21" century, Tri-Valley becomes One of the nation's most attractive, thriving, and livable regions ofentreprcneurship and innovation_ It becomes known as the Golden Valley-a primc example of how to sustain eeonomic prosperity and a superb quality oflifc through a commitment to business and community innovation. Its cities retain their ncighborhood feel, expand their quality of life amenities, and enrich their ceonomies with clusters of small, innovative firms that fit well into thc community fabric. These firms are well-networked and form business partnerships easily, are well-supported by loeal policies, ean find commercial spaee efficiently, and work productivcly with local education and training institutions to meet their changing workforce needs_ These firms are the core of the region's industry specializatioos, enabling Tri-Valley to compete effectively in the global marketplace. These speeializations are rooted and benctït every city in the region_ The region's national laboratories are not only sourees of innovation, but magnets for business partoers who, in turn, ci<pand their operations into the region. The regional economy employs talented pcop1e who ean afford to live close to their work. The mii< of housing matches the occupational distribution of the workforce, providing aecessible options for young singles, families, newcomers, and others. Most importanlly, Tri-Valley's regional stewards are vigilant and able to work together effectively as new challenges arise. 8 I) Ò2JS'1 I. Tri-Valley's Changing Economic Landscape The Tri-Valley region has beeome a wellspring for entrcpreneurship aud iuuovat1on--a place wherc talented people choose to live in high-quality communities, ereatiug and working in innovative firms that serve local, regional, and global markets. In the last few years: · Tri-Valley has produced thousands of small, homegrowu eompanics that are transforming the regiou ' s economic landscapc-and accounting for a grcater and greater share of regional prosperity. · The growth in small-firm entrepreneurship and inuovatiou has fueled growth aud transformation of the region's iudustry specializations. · Every city is participating in the transformation of the Tri- Valley economy-and are, in faet, interdependeut parts of a truly regional economy. This chaptcr describes the changiug economic landscape iu terms of firms and eoncentrations of firms in industry spceializations. The Changing Landscape of Firms in the Region The rate olentrepreneurship ha,~ been ahove the national average most years since the early 1990s As Figure I-I shows, the region has gone from a business ereation rate below thc national average in 1990 to one wcll-above the natiOl1al average by 2003. In fact, between 1993 and 2003, the Tri-Valley exceeded the national rate of business creation all but three years. Nationally, about 10% of all finns are brand new in any given year--a ratc that has held steady or declined slightly sinee 1990. Tri-Valley's rate of firm birth in 1990 was well below the nationallcvel, at 5.9%, but by 2003 the rate was up to 15.7%. 9 0.1f> î 0.14 ¡¡; , 11.11 h " E · , ù., ¡ 0 · , 0.08 ..... · 0 ~ 0.01'> _n.. ~ E ~ , O.l)q ______n__..._._n , ~ ~ 0.02 I " (,,") .o:;Ü c.~T' ....' Î..........; I --/ Figure 1·1: Rate of Firm Creatit,m Source: NETS Dat.abase 19920 ]~93 I'JI}4 1~~.~ .-....-----.--..-. .---...-.-.--.- 1"% ,.., 2003 1998 '''' 2000 10111 1U01 .....Tri-V~I1t,:~ .......lIS ^v~rD..l!:~ RI1I~--'- The number of business establishments has outpaced inereases in population. As Figurc 1-2 shows, the average number of establishment starts per 1,000 residents morc than doubled between 1993 and 2003, from 3.68 to 9.91. ". to i . -Ii ' E & i 6 f i! Ê ' ¡¡; Figure J-2: Firm Crcation per Capita -.---....-.-...--....--..----.-------.--.... ... __ n_.."._..__ .._ ..___.__._____.____._.._.... o 1'1'/3 1')')4 199~ Source; NETS Dat.abase., U,S. Ccmutl Burr;au 1996 1000 ~003 2001 2002 1997 1998 1 ~~~J 10 J:3 Ö)-'r'.::::,:") , . >."'~ Moreover, as Figure 1-3 shows, Ùle number of business starts in the region increased dramatically in 2001 and 2002, dtiving the growth in net new tlrms to its highe.t level at least since 1992. In all, more than 18,000 companies have been created in the Tri- Valley since 1990. Figure I~3: Addition of Ftrms to TrÎ~Vaney "Econom.y, by Source 3,000 .i .. 2,O!)) -1,000 -2.nou""---·· _:\,CJOfl 19~() 199! 1992 1993 [994 I -,M~,~~¡~ flr~~ _Mnvf_Ou~Fi~~-'·- J 995 I ~I~f, 1')9? 1998 1999 20()() ¡?(KII ·~Firm St~~.__." 1=:;áf.i,~~Z:i~-;;;~NetFinn CbHnK~,_J 2o()2: Source: NETS Database 11 IY ........' t"ì .,.._., ~M__ c., () 1"'--......J , '_/ The regional econumy is now mostly a homegrown econumy The Tri-Valley economy is very dynamic, "churning" rapidly since at least the 1990s. As Figurc 1-4 shows, most of the finns andjohs created havc been the result of new, homegrown firms. Figure 1-4: Business "Churn" in the Rcgion # firms dosed (1990-100:2) 13,MS (78.607 job,) I/- firms muv~J wÌthÍn 1h~ Regiun from 1990-2002 1.655 (19.û54job,) # firms reloc.ated Illto n~~¡on (1990-2002) 2;023 (34,434 jobs) ;';:::::~~~1;:""'""'""'" # firols Ino.\led out. of the rcw-on (1990- 20(2) 1,395 (17,11~ jQhs) # l'icms cl"Cl1tt;d (1990-2002:) 18...329182,019 jobs) Sourcc; NETS Database In fact, the majority of changes within the local economy come from the opening and closing of independent firms. From 1990 to 20021, more than 18,300 new firms were started in the Tri-Valley. Many of these firms did not last for morc than a few of years (during that same time 13,600 firms went out of business), but there was still a net increase in the number of firlns in the region-from 11,200 firms in 1990 to U!,OOO firms in 2003. In 2003, 86% of all Tri- Valley establishmcnts were independent firms that were started in the rcgion. Four perccnt of all firms were started in the Tri-Valley and now have offices elsewhere. Only 3.5% of firms were started outside the region. I The lalest year for which data is available 12 \.::;' D\~" I , Figure 1-5: Business Longevity Ag¡; of ~·itms ill Trj-Vallcy as of2003 SharI!! of firms starœd between 1997 and 2002 4.% Sh~rll Qof firri'l~ that were 5~rtljld bllfore 199D 27% Sharllll r;¡f firms stal'Uld blliltwlilllln 1990 and 1998 24% Sourcc; NETS Da1¡¡.base Beeause of the nature of the ehurn in the region, the Tri-Valley economy is almost entirely composed of locally-based firms, many of them ereated in just the past few years_ As Figure 1-5 sbows, about half of all firms in the region have startcd-up just since 1997. Moreover, 41 % of all finns operating in 2003 had five or fewer employees and had been in business for five ycars or less. Reloeations in or out of the Tri-Valley rcmains a very small subset of the total change in firms. However, from 1990 to 2002, the region did record a net gain in jobs and firms from the movement of establisbments into the region. During that time, 2,023 firms moved into the Tri~Vallcy (bringing 34,434 jobs), and 1,395 firms moved out (taking 17,115 jobs). Almost an equal amount of movement took place witbin tbe region: 1,655 firms moved from one part of the Tri -Valley to another. By any measure, there has not been an ei<odus of firms to the Central Valley or anywhere else. Within the relatively small subset of firms that moved out of the region between 1990 and 2002, about half did not venture very far: 47% stayed within Alameda and Contra Costa Counties. Another 14% moved a litlle furthcr to other parts of tbe Bay Area-primarily Santa Clara County and San Francisco. Only ten percent of the firms that moved out of the region moved to the Central Valley (San Joaquin, Stanislaus, and Fresno Counties in particular). Furtbermore there is no signifieant increase in the rate of movement out of the Tri- Valley, nor is there any discernable pattern in terms of size, industry sector, or other charaeterislie. 13 ICD D)- ¡..- '... ~I Of the finns that moved into thc rcgion, 59% came from other parts of Alameda and Contra Costa Counties. Twenty·five percent of firms that moved into the Tri-Valley betwecn 1990 and 2002 camc itom other parts of the Bay Area (Santa Clara, San Mateo, and San Francisco Counties). A handful offirms moved into the rcgion from the Central Vallcy (3%). There also has been no significant "leap- frogging" of firms moving from other parts of the Bay Area directly to the Central Va1lcy rather than locating in the Tri-Va1ley. Fifty-eight percent of a1l Bay Area firms that move out of other parts of thc Bay Area move into Alameda and Contra Costa Counties. The two areas that receive the !Jei<t highest shares of firms from the Bay Area are Sonoma (9.4% of all moves out of the Bay Area), and Los Angeles (6.8%). Together Sacramento, San Joaquin, and Stanislaus Counties account for 7.2% of all firm movement out of thc Bay Area. New, homegrown firms are the most important source of job growth in the regional economy As Figure 1-4 on business churn also shows, since 1990, new firms have added on average about 41 % more jobs eaeh year to the regional cconomy than existing firms, and about 420% more jobs than firms relocating or expanding into the rcgion. By 2003, only about 6.5% of Tri-Valley workers werc employed by firms that had moved into the region. What kind of jobs do these homegrown firms ereatc, and how do they compare with relocations? Independent homegrown firms have a higher revenue per employee than most relocations. Independcnt homegrown firms include thosc that are standalone operations and those with branches eitber in the Tri-Valley, outsidc the Tri-Valley or both. As Figure 1-6 shows, these homegrown firms (which are the vast majority of all tïrms in the Tri-Valley) geuerate comparable or higher revenuc pcr employee thau branch or headquarters relocations. The only kind of relocation that generates substantia1ly higher revenue per employee is the standaloue operation. The only kind of homegrowu firm that generates substantially lowcr revenue per employee are branches of homegrown headquarters opcrations. Figure 1-6 Revenues per Employee by Firm Type 1990-2003 Establishment TVDe Move-in Homegrown Brauch $ 162,445 $ 97 082 Headauarters $ 152,975 $ 160,957 Standalonc $ 256,311 $ 179 129 Source: NETS Database Homegrown firms now account for more regional economic revenue than any other source The share of regional cconomic revenue generated by homcgrown firms rose about 20% between 1990 and 2003, and now accounts for about 60% of total economic revenue gcneratcd in the region. 14 \ ï COb ':) c\ The number of very fast growing firms has almost tripled in the past decade Tri-Vallcy has also become a location that has been able to support a growing number of fast- growth finns in recent years. As Figure 1-7 shows, the number of very-fast growing [¡nns (or "gazelles") generating at least $500,000 per year in revenues, and whose revenues continue to grow by at least 20% for tour consecutive years, grew from about 40 finns in 1994 to more than 110 in 2003. Figure 1-7 Gazelle CompllnÎt::!i În the TrI-VaUey ," 14<) .n __..______..._ 100 J20· .,. ..___..._n__..... 1,0 40 .--- 20 ...--.-..-...--.-...-----... o· 1~'~3 I~~' 1995 !996 I"'" J991¡ IL}!)!) 2000 21101 ;;!IMI2 2003 SL¡ut¡;t:¡: NIiTS Ua.18baSC The role olvery small firms (jive or fl?Wer employees) in regional prosperity has grown substantially By 2003, [¡nns with 5 or fewer employees were 80% of total firms, eompared to 75% in 1990 (see Figure 1-8). In tenns of absolute numbers, there were 13,421 firms with five or fewer employces in 2003, up from 8,172 finns with fivc or fewer employees in 1990. IS \[) C, ¡::,q ~ ) r~~ì"";;' \ Figure 1-8: Tri-Valley Firms by Size 1990 2003 .50rfewst .6'025 ,,26'0100 C Greater than 100 As Figure 1-9 shows, these very smalllírms dircctly aecounted for 22% of cmp10yment in 2003, but generated 35% of the revenue within the Tri-Vallcy. This figure is up substantially from 26% in 1990. Small firms with up to 25 employees account for wcll over half of all revenues (58%) generatcd by the regional economy. The very largest companies, by contrast, eontribute about one-third of the employment, but oIlly about one-quarter of the regioIlal ecoIlomic rcvenues. Indirectly, both large and small firms also stimulate job and revenue growth in the regional cconomy by contracting with other firms for services that they choose not to keep in-house. Contributions to the He lonal Eeonom ,2003 Share of Share of Share of Firms Em 10 ment Revenue 80% 22% 35% 15% 22% 23% 4% 23% 18% 1% 33% 24% Fi ure 1-9 Size of Firm 5 or fewer 6 to 25 26 to 100 Greatcr than 1 00 Sourcc; NETS Daluba!Je Very smallfìrms are also leading the way in productivity growth Not only are small cstablishments an increasingly large part of the eeonomy, but the revenue per employee created by those establishments has iIlereased dramatieally as well (see Figure 16 \ 0; Ch'I,.':) ........1 1-10). While tïrms of every other size lost 13 to 14% in revenue per employee ovcr the 1990· 2003 period, establishments with five employee, or fewer gained 42% in revenue per employee. This gain makes very small firms second only to the largest enterprises, many of which are headquarters for whom revenue tïgures are skewed because they represent company prolHs that were not attributed to other branehes. The 2003 figure of $218,532 is about twice the median household income for the Tri-Valley. Figure 1-10 Revenue pcr Employee by Firm Size ad' usted for inflation) 1990 2003 $ 153 667 $ 218,532 $ 187,001 $ 156,820 $ 148,298 $ 128456 $ 491 483 $ 422,440 Establishment Size 1 to 5 6 to 25 26 to 100 Grcater than 100 Sourcc; NETS Dalabaae As a group..fìrms with 100 or more employees have lost jobs since the early /990.1', while firms under 100 employees have gainedjobs As Figure 1-11 shows, as a group, Tri·Valley's large,t firms lost jobs every year but two since 1991. As a group, Tri-Valley firms under 100 employees gained jobs every year but one during thc same period. Although firms with morc than 100 employees remain an important part of the economy (contributing 1/3 ofall the region' s jobs), they have not as a group generated net new jobs in most years. The bottom line: net job growth in the Tri- Valley because smaller firms add employees. 17 200(1 E _. £ .. ~ --, ~ -2000 0 i . 0 -4000 " _6000 '10 Of---':' 0 ð J \ '. FI2ure 1-1] Net Employml;!nt Change Within Existing Companies 6000 4000 .....-...-.--.-.-.-.----.--..-.--.-.. ]998 2002 "" 19% 19~7 .. .-...-.-.--------------..-. n______... _fUX')() -----... . -.-.-.-.-------.---.--.. .IO(,(\()'~ .._~C(>m~t¡i\;S w¡¡h m(>f~ thll.n IOU eml1l"y~~~·-··--· ··-S~~~~;~~ with !~_.~mplvv~""'s (>f t'¢wer Source; NETS Databasc Firms are spread across the regiun, rather than concentrated in just une or two locations As Figure T- 12 shows, between about 20-30% of the regions firms can bc found in each of the citics of Pleasant on, Livennore, San Ramon, and Danvillc, with only Dublin (10%) aceounting for less than that amount. Ncw businesses are also well-distributed throughout the Tri-Valley. When compared to population, each city also shares in the average number of new business starts per resident. It is important to note that many ofthese firms are very small, but nonctheless an important part of the regional economy. Also, the percentage of all and new establishments can vary year to year, especially if stronger efforts are made by individual jurisdictions to add commercial space or otherwisc promote economic development. The key point is that regardless of year- to-year fluetuations in share, each of Tri-Vallcy's jurisdictions has an important stake in the regional eeonomy, instead of most economic activity concentrated in just onc or two cities. FJ ure 1-12 Distribution of Firms Acro.s Tri-Valle Cities All New Starts in 2003 Firm Starts per Rstablishment"i in 1,000 Residents in 2003 2003 Danville 19% (3,380 lÏnns) 26% (702 firms) 16.3 Dublin 10% (1,795 lÏrms) 10% (268 tirms) 7.8 Livermore 23% (4,160 lÏnns) 18% (474 tÏrrns) 6.2 Pleasanton 29% (5,244 filJlls) 26% (694 lÏrrns) 10.5 San Ramon 19% (3,430 firm,) 20% (541 lÏrrns) 11.6 Source: NETS Database 18 "',' \ '. The Changing Landscape of Industry Specializations The growth in small-firm entrepreneurship and innovation has fueled growth and transformation of the region's industry speeializations. They are: · Innovation Serviccs · Scicntitic and Biomedical PTOducts and Serviees · Business Operations · Information Technology Products Thesc industry specializations are driving thc region's economy. They account for almost 40% of the rcgion's employment base, and produeejobs and revenues in other sectors such as retail, construction, and the like. As figure 1-13 shows, employment in three of the four speeializations is more highly concentratcd than the state average, and the fourth is more highly concentrated in cstablishments than the state average (Scientifie and Biomedieal Products and Services). All four have averaged positive annual growth rates over the ten-year period. Figurcl-13 ENolvlng Specialization, (1994-2004) 4.5 ' 4.0 ..-..------------------". .-.------..---...- INFORMATION rECHNOlDGY, 12,254 ð £ 3.5 -¡¡~ t~ 3.0 ~ ! 2.5 ª ~ 2.0 8~ 161.5 ]- 1.0 ...-----.-...----.,. . n___"'__________.. ....._____n...._ INNOV,o>;rION ~VICES, 22.160 -..--------.... ..-"'.--------....-.-.. .--. --..-.--------.... 0.5 ...--..-..--.- 0.0 00;.. 7% 8% 5% 6% 2% 3% 4% IIVo AAUR94-04 1_'!~0~~~f!EALrii-.IJJSINE$()~~"!'oNs _~!,"¿~rION 1I'CIiNOI,<:>GY~!~()VM!ON ~VIŒS I Source: California Employment D¡:v¡::loprrtent Department (EDD) 19 " )~ ., ~\ \ 'ì'" - ,_., (ì rY<--J... ()~---' ; , From 1999 through 2004 the regional economy has gone through a period ofrestrueturing (see Figure 1-14). lnfonnation Teehnology employment has diminished, averaging a 4% annual loss in employment, but the three othcr specializations have maintained positive employment growth. Innovation Serviees and Scientific and Biomedical Products and Services together eomprise 20% of regional employment continued to grow in spite of thc ceonomic downturn. Figure 1-14 Recent Restructuring (1999-2004) 4.5 fNFORMATION TfCJINOtoGY,.123~____L___. .. I 4.0 is 3.5 " I ~ 3.0 en .~ ~ 25 i ~ 2.0 '-'ê [;!.....; 1.5 ~- J 10 . ---------.--...- INN'OVÄTIoN SERYlŒ\--' . ^ "'-L---- _..__.____._____n...... . . ...----------....-...---.. . --.----------.----.-.- "-¡SINK" OPERXi'iÖN~ 17,662 -...-..----.-.-.--.-..... 0.5 0.0 ·6% -4% -2% 0% A!l{ìR 1999.2004~ 2% 4% 6% [!!':ª~I(!_L~F.ALTH .IlJSlNfÆOPERATI~~=~~~TTO¡;i~HNOWGY 0 rNNOy!;f!ON æJ<.Vi~J S(11,Ir(;~: EDD The region's largest specialization i.5 now innovation services Innovation services is a concentration of firms that typieally help other firms bring innovation to their products and processes that now employs about 13% of region's workforcc. Innovation services firms provide engineering serviees, system design, and specialized consulting services to firms locally as well as acroSS the nation and abroad_ This specialization is two and a halftimes as concentrated in this region as in the rest of the state, and has continued to grow steadily at 3.9% over the last ten years_ It was thc least affected during the recent recession, maintaining a 3.7% rate of growth bctween 1999 and 2004. From 2003 to 2004, employment in this cluster grew by 6%. 20 d- '3 0D -s ,:.-, Fìgure J-15: Innovation Services Growth,· 53% (1994-2004) Employment: n 160 (1004) Key sectors in illllovation services include: · SâentifìdTechnical Consulting Services-including adviee and assistance to businesses and other organizations on dcsigns and speeifieations that optimize the use, value, and appearance of their products. · Management Consulting Services--including advice and assistanee to businesses and othcr organizations on management issues, such as strategic and organizational planning; financial planning and budgcting; marketing objectives and polieies. · Engineering and Design Services-including the applieation of physieallaws and prineiples of engineering in thc design, development, and utilization of machines, materials, instruments, structurcs, processes, and systems. · Research and Development in the Physical, Engineering, and Life Sciences- including research and cxperimental development in the physical, engineering, and life sciences, such as agrieulture, electronies, cnvironmental, biology, botany, biotechnology, computers, ehemistry, food, fisheries, forests, geology, health, mathematics, medicine, oceanography, pharmaey, physics, veterinary, and other allied subjects. · Computer Systems Design and Rela/ed Services-including (1) Writing, modifying, testing, and supportingsoflware to mcet the needs of a particular eustomer, (2) Planning and designing computer systems that intcgrate computer hardware, softwarc, and communication technologics, and (3) on-site management and operation of clients' eomputer systems and/or data proeessing facilities. 21 d-L/ rsò 5(1; Examples of Tri-Valley Innovation Services firms Scientific! Tosoh Set Inc. Tochnical Consulting Scientific! Altsoíì lne. Tochnical Consulting Enginecring AT! Engineering Services Inc. & Design Serv ìces Engineering Carlson Barbee & Gibson & Design Services Description The semiconductor industry's prcmi~r provider of process kits and process ma.nagement A full-service information technology support company employing over 200 seasoned professionals with a wealth of IT indu~trv eXDcricnec A multi-discipline Architectural and Engineering Services firm offeriog innovative engineering design services Provides a complete range of civil e:ngînccring~ s.urveying and land planning services For this report, a foeus group that included employers in innovation scrviees were asked what the current value proposition is for this specialization in the Tri-Valley, as well as what the vision for their industry in the region-and what must be done to achieve that vision. The current value proposition--or the prime reasons why the Tri"Valley is currently a good place to locate innovation scrviees eompanies-is a combination of both eost and value. On the cost side, employers recognize that the region has available commercial space at a cost lower than mucb of the Bay Area. On the value side, the most important asset is the regional talent pool-both residents and commutcrs. In faet, innovation services is benefiting from a substantial "reshuffling" of talent in the Bay Area-including highly-skilled people who used to work in Silicon Valley and live in the Tri-Valley who have in recent years become re·cmp10yed or started their own businesses in the Tri-Valley. The region's quality oflife also remains a critical asset-acting to attract and retain both entrepreneurial company founders and key employees. For this specialization, the proximity to clients is iJT1portant-be they largc or small companies based in the Tri-Valley, Silicon Valley, or other parts of the Bay Area, or business customers in other parts of the nation, or other countries. Looking forward, employers believed that the rcgion eould solidify its role as a prime loeation for teehnica1 design services and high-level managerial and other specialized assistance to other industries, helping them develop innovative products, proeesses, and services_ To do so will require growing connections among innovation services and other regional industry specializations, and support in helping firms start-up and grow. It will also require eontinuing attention to Tri-Valley's current valuc proposition-especially talent and quality oflife. 22 ~' " ,,,,,;,,"1 ~':::, O-~"-';;';'C' ! ,/ '-'~ The region's fastest growing specialization is now scientific and hiomedical products and services Scientific and Biomediea1 Products and Services is thc fastest growing specialization in the rcgion, averaging over 6% growth from 1994 to 2004. Growth has been strong in spite of the reeession, with 4.4% growth from 1999 to 2004. In total, Scientific and Biomedical Products and Services employment boomed 80% between 1994 and 2004. While its employment concentration is only at 81 % of the state average, it has been gaining ground quickly: its concentration has increased 30% eompared to the state average ovcr the last decade. Scientific and Biomedical Products and Services has moved from 5% to 6.5% of the region's workforce. And, from 2003 to 2004, employment in this cluster grew by 11 %--more than twice the rate of growth aeross the region (4.5%). In 2002, the number of business starts in thc region increased dramatically in Scientific and Biomedical Products and Services: twice the average number of starts in this specialization werc rccorded in 2002. Small filTI1s playa special role in the scientific and biomedical products and scrviccs. While the region has an employment concentration that is below thc California average, it has an establishment concentration that is 20% above the California averagc. While employment in Scientific and Biomedical Products and Scrvices is not as eoncentrated in Tri-Valley as in thc rcst of the state, it is more eoncentrated in numbcr of establishments. These tílTI1S contribute to the chum/activity in the region, while utilizing local business operations serviccs. Approximately two-thirds of this specialization is oriented towards the delivery of medical care to rcgional consumers, while thc rest is more ei<port-oriented and deliver thc science, instruments, and tests that lead up to consumer health care. Figure 1-16: Scientific/Biomedical Products and Servíæs Grow/h, 80% (1994-2004) E",pl<1Y"'.nl' 11.166 (2004) ~".'.'.·/···':f>"" 'ii............H...,....."'I'....,.,."",...'.....'/II!.'......'......'...'..'.'...'. :. "'"V''''''' ~.>.;,.,+.,......~ '~.>'m¡¡IIÌì¡),...·. ev....I........p...·._..........·Ïo. " :::~,¡:,::,:::::::':'::'::'::'::":::::':':::::,,:: ",,,'i,,,:':':,:;:;:;',;,:,;:,:::: ""'"Y"':::::,:"":"""",,,,, 23 ;).1..0 ÖhSC¡ '-..-" Key sectors in seientific and biomcdiea1 products and services include: · Pharmaceutical and Medicine Manufacturing-including manufacturc of biological and medicinal products, processing botanical drugs and hcrbs, manufacturing pharmaccutica1 produets intended for internal and external consumption. · Medical Equipment and Supplies Manufacture-including manufacturing of laboratory apparatus and furniture, surgical and mediea1 instruments, surgical appliances and supplics, dental equipment and supplies, orthodontic goods, dentures and orthodontie applianccs. · Scientific Instruments Design & Manufacture-including manufacturing laboratory instruments, X-ray apparatus, and electromedical apparatus; manufacturing of aeronautical instruments, laboratory ana1ytiea1 instruments, and physical properties testing equipment. · Hospitals/Health Care Providers-including diagnostic and medical treatment (both surgical and nonsurgieal) to patients with a wide variety of mcdical conditions; health practitioners having the degree of M.D. (Doctor of medicine) or D.O. (Doctor of osteopathy) primarily engaged in the independent practiee of general or specializcd medicine (e.g., anesthesiology, oneo10gy, ophthalmology, psychiatry) or surgery; health practitioners having the degree ofD.M.D. (Doctor of dental medicine), D.D.S. (Doctor of dental surgery), or D.D.Sc. (Doetor of dental science); outpatient healthcare providers; and inpatient nursing and rehabilitative services. · Medical Testing/Diagnostic Labs ..including physical, chcmical, and other analytical testing services, such as aeousties or vibration testing, assaying, biological testing, calibration testing, electrical and electronie testing, geotechnical testing, meehanical testing, nondestructive testing, or thermal testing; providing analytic or diagnostic services, including body fluid analysis and diagnostic imaging. Ei<amples ofTri~Valley Scientific and Dcscription Biomedical Products and Services Firms Medical Carl Zeiss Meditec Medical technology for ophthalmology Equìpment Manufacture II~alth(;are Hill Physicians Medical A medieal group of physieians in Northern Providers OrouD California Healthcal'e Kaiser Permanente Provides not-for-profit comprehensive health Providers services to the Tri-Valley and N. California Mcdiç:al Micro Dental Laboratories Fabricates high quality dental restorations Equipment Manufacture Hcalthcan: Valley Care Hcalth System Provides not-for-protlt health eare to the Tri- PrQviders Vallev and surrounding communities 24 ~~. Î Ò)j ,~sci L.., For this report, a focus group of employers in scientifie and biomedical products and services were asked what the current value proposition is for this specialization in the Tri-Valley, as well as what thc vision for their industry in the region-and what must be done to achieve that vision. The current value proposition-or the prime reasons why the Tri-Valley is currently a good plaec to locate seientific and biomedical products and services eompanies--is a eombination of both eost and value. On the cost side, employers reeognize that the region has available eommereial space at a cost lower than much of the Bay Area. On the value side, the most important asset is the regional talent pool-both residents and eommuters. In faet, the ability to meet a company's entire workforce "halfway"-that is, to draw people from comparablc or more-ei<pensive eommunitics to the west and less-expensivc communities to the east-was considercd to be an important advantagc. Another critical asset is the region's quality oflife-aeting to attract and retain both entrepreneurial company founders and key employces. Especially for the biomedical scctors, the proximity to the Bay Area's universities and medical complex (including hospitals and other biomedical employers) is particularly important. For some employers, the presence of a loeal population that generally has health insurance and higher incomes is part of Tri-Valley's value proposition. Looking forward, cmployers believed that the region could build on its growing strengths in medical R&D (linking researeh and health care services, clinical testing, and hospitals), bio- defense (linking national laboratories and firms), and medical devices and scientific instruments. To do so will require stronger connections among firms and sectors, laboratories, and business support services. It will also require continuing attention to Tri- Valley's eurrent value proposition--especially talent and quality of life. Another large and growing concentration is business operations Business operations firms that provide basic functional scrviees such as finance, insuranee, legal, and other administrative support to other businesses. This is an area that has grown as larger eompanies outsource and smaller companies buy services rather than add employees. In 2002, the number of business starts in the region increascd dramatically Business Operations: three times the averagc number of Business Operations starts were recorded that year. Busincss Opcrations is a large specialization that is 36% more concentrated in Tri- Valley than the state of California. This cluster grew at 4.1 % from 1994 through 2004, and has shown some positive net growth in the last five years (.5%) in spite of the reccssion. This is the second-largest speeialization in Tri-Valley, with 17,660 employees, or 105% ofregional cmployment. 25 [J ..... ". 9- 6 õ r". ......' Figure 1-17: Business Operations Services Growth: 53% (1994-2004) Employment: 22.160 (2004) ~........:"'''." "'k"\,;,\" 'i;i¡i]~~~~i~:i .,,,,,..............,,.,.,,.,,.,,,,,,,,,.,,,,,,..... .... """"'.""",'""""" Key seetors in business operations include: · Financial Services-including accepting time deposits, making mortgage and real estate loans, and invcsting in high-grade securities; cngaging in sales finaneing or sales financing in combination with leasing; making cash loans or cxtending credit through credit instruments (ei<cept credit cards and sales finance agreements); acting as agcnts (i.e., brokers) between buyers and sellers in buying or selling securities on a commission or transaction fcc basis; estimating the [air market value of real estate. · Legal Services·---including offiees of legal practitioners, providing expertisc in a range or in specifie areaS of law, such as criminal law, corporatc law, family and estate law, patent law, rcal estate law, or tal< law; and drafting, approving, and executing legal documents, such as rcal cstate transactions, wills, and contracts; and in receiving, indci<ing, and storing such documents. · Insuranc,~including direct insurance carriers, engaged in initially undcrwriting (i.e., assuming the risk and assigning premiums) annuities and life insurance policies, disability income insurance polieies, accidental death and dismemberment insurancc policies, health and medical insurance policies and other various types of insurance policics; insurance agencies and brokeragcs, aet as agents (i.e., brokcrs) in selling annuities and insurance policies. · Data Processing. Hosting, and Related Services-including providing infrastructure for hosting or data processing services. · Facilities Support Services-,including operating staff to perform a eombination of support services within a client's facilities such as cleaning building interiors, interiors of transportation equipment and/or windows. 26 ~q n'hSq I_,~ . Employment Support Services--including a range of day-to-day office administrative services, such as financial planning; billing and recordkeeping; personnel; and physical distribution and logistics for othcrs on a contract or fee basis; listing employment vacaneics and in referring or placing applicants for employment; supplying workers to clients' businesses for limited periods of timc to supplement the working force ofthe client. Ei<amp1es of Tri-Valley Business o erations Finns Description Data. Processing Services Facilities Support Services Employment Support Sc;rvjçe;=!j. Facilities Support Services ADP Claims Services Group Astro Pak Corporation A provider of automotive clahns processing solutions lnTelegy Specializes. in high purity, preci~ion, chemical and industrial cleaning Designs, statIs and supports management of sales and customer service call channels Tri- Valley Janitorial A janitorial company serving businesses over 20,000 square reet For this report, a foeus group that included employers in business operations were asked what the current value proposition is for this speeialization in the Tri-Valley, as well as what the vision for thcir industry in the region-, and what must be done to achieve that vision_ The eurrent value proposition-or the prime reasons why the Tri-Valley is currently a good place to locatc business operations companies-is a combination of both eost and value. On the eost side, employers recognize that the region has available eommereial spaec at a cost lower than much of the Bay Area_ On the value side, the most important asset is the regional talent pool-both residents and eommutcrs. The region's quality of life also remains a critical asset-acting to attract and retain both entreprencurial company founders and kcy emp10yees_ In addition, business operations companies benefit grcatly from the shift to outsoureing among large opcrations and thc prolifcration of smaller companies that choose to buy rather than build business functions (e.g., finance, legal, human rcsources). Moreover, with the growing number of very small cnterprises--especially one-person opcrations-has multiplied the need for personal financial planning, legal, and other services_ Not surprisingly, close proximity to clients is important- - be they large or small companies based in the Tri- Valley, Silicon Valley, or other parts of the Bay Area. Looking forward, employers believed that the rcgion would continuc to grow in business operations as large and small fínns ehoose to outsource eertain business funetions-and as local firms find that thcy ean obtain high-quality scrviees from Tri-Valley business operations firms without having to look to other regions. The key for business operations companics in the region will be to gain "referrals across categories." For example, when a law firm is 27 30 D¡-, ':/'i I,,"' working with a client that also needs financial or human resource serviccs, meehanisms exist for referrals to happen easily and often. Another critical need is for a stronger linkage with the other industry specializations-so that firms in scientific and biomedical products and services, innovation services, and information teehnology products have access to high- quality business operations support in close prOi<imity. Like the region's other specializati()ns, business operations will prosper only with eontinuing attention to Tri-Valley's talent pool and quality of life. Tnformation technology products remains an important, ifrestructuring specialization The region still has a large concentration of information technology product eompanies, but one that has been restructuring and losing employment since the global downtown in techn()logy sectors. Nonetheless, this sector remains an important part of the regional economy and highly concentrated in the Tri- Valley. In fact, Information Technology Products is the most highly coneentrated specialization in the region, at almost four times the state average. While this cluster avcraged 1.8% growth in the last ten years, it was hit hard by the recession, and has consequently shrunk in the last five years (-4.1 %). Employment in this cluster did improve from 2003 to 2004, with positivc growth of 2%. Fíg\.lfC 1-18: lnfnrmatÙm TechnoJogy Products & Se1vice,\' Growth: 19% (1994-1004) Employment' 12.254 (2004) v Key seetors in information teehnology products include: . Software Publishers-including firms cngaged in eomputer software publishing or publishing and reproduction, opcrations necessary for producing and distributing eomputcr software, such as providing doeumentation, assisting in installation, and providing support services to software purehasers. 28 '3 \ D !;¡:,;~\ · Telecommunications Carriers (Wired and Wireless)-including operation of switching and transmission facilitics to provide point-to-point eommunications via landlincs, microwave, or a combination oflandlines and satellite linkups, Or COIllIllunications via airwaves. · Communications Equipment Man,!fàcturing-including manufacturing wirc telephone and data cOIllIllunieations equipment, radio and television broadcast and wireless communications equipment. · Electronic Component Man,!fàcturing-including manufacturing semiconduetors and other components for electronic applications; power, distribution, and specialty transformers; electric motors, generators, and motor generator sets; switchgear and switchboard apparatus; relays; and industrial controls. · Telecommunications Resellers-·-including purchasing accesS and network capacity from owncrs and operators of the networks and reselling wired and wireless telecommunications scrvices to businesses and households. Examples of Tri-Valley Infonnation Teehnolo Ptoduet Firms Cornrnunic¡¡.bon!:' Aimex Connnunications Camêr!; Description Td~(;ornrt\.L!T'Jica.tiom; Alloptic fne Rt;!ìellers. ElCC\Tonic FormFactor Inc. Components Manufacture Software Sybase Inc Long distance, international, and digital wireless telecommunications, high-speed internet acceSS and web hostin services. Facilitates the irnplemc-nlalion of optic networks Designs; develops, manufactures, and sells semiconductor wafer probe cards Mobile software solutions for information mana ement, dcvd ment and integration For this report, a focus group including employcrs in information technology produets were asked what thc eurrcnt value proposition is for this specialization in the Tri-Valley, as well as what the vision for their industry in thc region-and what must bc done to achieve that vision. Thc current value proposition-or the prime reasons why the Tri-Valley is eurrently a good place to operatc information technology products eompanies-is a combination of both cost and value_ On the eost side, employers recognize that the region has available commercial spaec at a cost lower than much of the Bay Area. On thc value side, tile most important asset is the rcgional talent pool-·both residents and commuters. In fact, employcrs noted that there is now "a lot of talent on the sidelines," particularly as a result of large job losses in Silicon Valley, expanding the available resident talent pooL Also, employers notcd that the region is attractive to "reverse eommuters"- people who live in S.ilicon Valley, the Peninsula, or other East Bay communities whose commute takes much less timc than driving from or through thc Tri-Valley to those locations 29 37- ð}¡L5..9 I.,.., during peak traffic hours. Of course, the Tri- Valley abo provides a short eommute for rcsidents compared to commutes to Silieon Valley and other Bay Area locations. Looking forward, employers bclieved that despite recent job losscs the region could still build on its strength in information technology produets-and could expand into sccurity tcchnologies through partne"hips with thc region's nationallaboratorics. However, mueh of the growth is likely to be in smaller rather than larger companies, making support for new and young firms partieularly important. As has happened in the past, many of these firms may be acquired by larger companies; or, in a break from thc past, they remain small, agile, and independent enterprises. In either case, infonnation technology products will prosper only with eontinuing attention to Tri-Valley's talent and quality of life. Industry specializations are widely shared among local jurisdiction." rather than concentrated in just one or two cities. Between 1990 and 2002, no Tri-Valley city securcd less than 6% nor higher than 34% of the region's new businesscs in innovation services, scientifie and biomedical products and serviees, business operations, and information technology products. These clusters are distributed throughout the region, with new firms in each of the five cities (see Figure 1-18). It is important to note that many of these firms are very small, but nonetheless an important part of the regional economy. Also, the percentage of new establishments by specialization can vary year to year, especially if stronger efforts are made by individual jurisdictions to add commercial space or otherwise promote economic development. The key point is that regardless of year- to-year fluctuations in share, each ofTri-Valley's jurisdictions has an important stake in the region's industry specializations, instead of one or more speeializations concentrated in just one or two cities. Fi ure 1-19 Share .!I.nd Number of Busine.. Starts By Sped,lIz,lIon B Ci 1990-2002_ Information Innovation Busines~ Scientific! Technolo J Services 0 erations Biomedical Danville 12% (57) 21% (784) 20%(388) Dublin 10% (48) 11% (411) 6% (125) Livermore 19%(N) 13%(511) 18%(345) Ple..anton 34% (158) 32%(1,215) 32% (612) San Ramon 25%lt9 23% 884 24% 465 Growing Sectors Suppurting Tri- Valley's Quality ofL(le In addition to the four industry speeializations described above, a final set of seetors deservcs mention. Togcther, they provide services that support and enrich the region's quality of life-- including restaurants, reereation, wine, and hospitality. These industries are important for loeal rcsidents and visitors, Their most important contribution is supporting the distinctive quality of life of the region, rathcr than providing a source of high-wage jobs as is the ease with the four industry specializations describcd above. Many of these seetors have large 30 "2-::2 ... ,(i ;;; -;:..) V+\ ';.;¡ I ~-,_. numbers of lower-wage jobs (along with somc higher-wage jobs), and that fact raises the issue of housing affordability for workers who eontribute to the quality of life to all residents. In particular, growth in these sectors enhances the natural and commercial amenities for loeal residents, especially the highly-skilled talent who want to livc and work in a region rich with quality job and business opportunities, as well as a superb quality oflife. In the Tri-Valley, employment and establishments have grown substantially in a number of sectors that support and enhance the quality of life in the region: · One example is eonstruction, which grew almost 80% between 1990 and 2003, employing more than 19,000 workers. Construction ofhomcs, commercial space, and eommunity infrastructure are critical to the region's quality of life. · Other seetors that have emerged help support the region's quality of life experience-- including full-service restaurants (also up about 80%, now employing more than 9,500 workers), golf courses and country clubs (now employing almost 900 people, up ITom only 240 in 1990), and smaller sectors like eaterers, specialty food stores, book stores, and wineries (all of which have doubled or more in size since 1990). · According to cstimates ITom the Tri-Valley Busincss Council and Livermore Valley Winegrowers Assoeiation, the number of wineries has almost doubled since 1997 (from 14 to 26, with several more soon to open), and both grape acreage and wine production has grown substantially, from about 2,000 to 5,000 acreS and 450,000 to 780,000 cases, respectively. · The number of visitors to the Tri-Valley has also increased substantially, growing from about an estimated 280,000 visitors in 1997 to over 400,000 last year. The number of hotel/motel estahlishments almost doubled (from 23 to 43) bctween1990 and 2003. · Thc Tri-Valley Business Council's Working Landscape Plan estimatcs that these and related sectors supporting the region's distinctive quality oflife could represcnt $1 billion in annual revenues, whieh also produce direct tai< revcnues for local jurisdictions. The region's quality oflife sectors are important ingredients in sustaining an innovation-led economy. They provide an attraetive and enriching environment for talent, and revenues to support public investments in quality oflife amenities sueh as parks, arts and cultural events, and other infrastrueture. For these reasons, the region's quality of life seetors also need to be supported along with Tri-Vallcy's industry specializations in innovation serviees, seientifie and biomedical products and services, business operations, and information teehnology products. 31 3~ lYb ¡;~(\ II. Tri-Valley's New Economic Role and Responsibilities The ceonomic role of the Tri~Valley is changing onee again-a shift that both benefits and raises the slakcs for the region. As Figure II-I shows, the region has evolved from agriculture and national laboratories to bedroom eommunities and back-office operations. Tn the 1990s, TriNalley developed its own industry specializations in infOI11Jation technology and scientifie and biomedical products, thanks to the addition of branch plants of wcll-established technology fiI11JS based outsidc the region as well as new 10eally-based firms. As Chapter I shows, the region's new economic idcntity is a mix of industry speeializations driven by a surge in homegrown entrepreneurship and innovation_ The Tri-Vallcy has evolved into an innovation economy---one that has a high levcl of business ereation that is driving growth of industry specializations (especially scientific and biomedical products and services), as well as a strong and growing specialization in service seetors that support innovation in other industries (i.e., innovation services). But, as this ehapter shows, this new economic role requircs new regional responsibilitics. An innovation economy requires a supportive "habitat" or regional business environment in which to tlourish. And, an effeetivc innovation "habitat" is the product ofregional collaboration-public, private, and community sectors working together to attract and retain the talent, eonnect resources to ncw firms, and preserve and el1hallCe quality of lifc. Figure II-I Tri-Valley's Economic Evolution "Edge City" Economic Outpost · Up to the 1980, · Defense, agriculturc~ back- office processing · A few large employers. .. Large physical developments (housing and commercial) · tittle regional identity or cooperation Growing EconomIc Region · t990s · Emerging strengths in software; communications, wine, mís.ceUaneous devices and matcrials · Large employers, along with growÎng number of smaller firms .. Growing development pressuTCs, lransportation bott1enecks, labor shortages .. Region begins to collaborate to address key challenges 32 Innovation Economy · 21 st century .. Strong specializations in infonnation technology, scientific and hiomedical products and scrvicc~, innovation services., business operations .. High rates of busíness creation; diverse base of homegrown headquarters · Innovation-driven economy needs supportive "hahitat" :::::;. talent :::::;. resources to start finng => high quality oflil" to attract and retain talent · Region's new economic role requires new responsibilities-a new level of collaboration 3'5 D -h'·=" ,:~ I...,' Tri-Valley's Innovation Cycle: Firms, Specializations, Habitat Thc success of Tri-Valley's innovation economy depends on a strong cycle offinn creation, growing specializati(JOs, and supportive habitat (Figure 11-2)_ Innovation is literally the act of making ehanges. Management expert Peter Drucker has long maintained that innovation and entrepreneurship go together. TIle key to understanding innovation is the power of networks that allow individual entrepreneurs to conneet in new ways. Drucker, economist Joseph Sehumpeter, and others have written that innovation and entrepreneurship as the engines of the economy-the source of wealth creation, the generator of opportunity for individuals and soeiety, and the catalyst for "creative destruction" oflcss produetive economic activities to make way for more produetive oncs. Figure 11-2 The Trl-Valley Innovation Cycle Firms Specializations Habitat The key to regional prosperity is productivity growth, which is the basis for rising wagcs, increasing return to shareholders, and growing per capita income for the region. The basis for growing productivity is innovation_ Over the long term, an advanced eeonomy likc that of the Tri-Valley eannot eompete by just lowering costs or incrcasing inputs; it must innovate or find new and better ways to combine human and other resourees to produce produets and scrviccs. In faet, Stanford economist Paul Romer has developed a "new growth theory" that describes how ideas are the primary eatalyst for economic growth. New idcas generate growth by reorganizing physical resources in more e11icicnt, productive, and creative ways. In this sense, the "ingredicnts" (i.e., the physical, human, financial and other resources) are not as important as the "recipe" (i_e., the ideas) of how to put the ingredients together in ncw ways. 33 3\..0 (~." ':, "\ r-- "., ." "1,_) The challenge before the Tri-Valley is to maintain both high-quality "ingredients" (i.e., talent, support for new businesses, quality oflifc) and a continuously-changing "recipe" to sustain prosperity. In fact, as Tri-Valley becomes a more innovation-driven economy, the region's talent base and quality oflifc bccomc even more important. Anything that erodes the region's ability to attract and retain talent and maintain a high quality oflife (like high housing costs or traffie eongestion) are cause for serious concern and attention. Assessing Tri-Valley's Innovation Habitat Tri~Valley's innovation habitat is comprised of three fundamental building blocks: people, pipeline, and place. People refers to the talent that is available to start or be hired into firms. Pipeline means the support that helps bring ideas to market through firm creation and innovation. Place mcans the plaee-based assets of the region, including commercial space, transportation, housing, and the quality oflife that makes the Tri-Valley a good place to live and work. People The residents and workers of Tri- Valley are one of the region's greatest attributes. In fact, Tri~Valley's economic transformation has coincided with major shifts in the region's oeçupational structure and the resident talent pool. There has been a shift to a more highly-educated population. Between the 1990 and 2000 Census, the proportion of Tri-Valley residents with a bachelors degree or more education rose from 36% to 44% (Figure 1I-3). Tri-Valley's population is far more educatcd than Calitornia (27% with bachelors degrees or higher) or nation as whole (24%). 34 "I}; ! 4~% E 40% I!! o ~~% 0; .c Æ 3!)LX, .c ~ 25% " 20% 0 " .!!! 15% ~ "- 0 "- 10% ~ ;!I. So/. 0% '3l rj ... 5(i ~ Figure U-3~ Percent of Population With Bachelors Degree ur Highc"'~ Trl~Valley, CalÎfornia, ond US, 1990-2000 --~~~, _..__.._.._._..__..._...____.__." _..'!..:¡111 36% 24% .....--.-.-- 20% Sourcc; U.S. Ccm.'I,1!; Bun;::l:I.u 1990 I_Trl_Volley _CA ¡jÛS I 1_______._..._..__....__.____."..._ 2000 There also has been a 8h!fI to higher-level occupations in the regional workforce. Between 1990 and 2000 Census, thc share of the Tri-Valley workforce employcd in managerial and professional occupations rose anywhere from 22% to 332% depending on the category, while the share employed in sales and administrative support jobs dropped about 15% (Figure IT-4)_ Forty-four percent more Tri-Valley workers were employed in management oceupations in 2000 than in J 990. Business and financial opcrations occupations, architecturc and engineering occupations rose by 27%, while the share ofresidcnts employed in life, physical, and social science occupations increased by 65%_ 35 ? ß õì.- '::I; ::) !) Figure 11-4: Chani:Îng OttupBilons 100% · ¡.¡O% u ~ · ., · 60% ¡ , .. j! ; 40% 8 .. & 2.0% " Æ u ~ 0% .._-". -Rcsidcnt :~_W.Q~ 'r -- -20% A,d'LI¡:;¡;(W'I;; Busin~s nnd Comp\ltc¡ rmd Ccmslrw.:tiun Life. physical. Mnn.¡¡gçmçnt Ollkuilrld Snlcsand '"' finaJ1d~[ [¡¡j,lht¡jj¡j,¡ical al1dcxtrnction ILmt~n~ia1 utl:UpatiOI}8. ndministr<ltive rclaltd çn¡¡:incl\rin~ (¡'I<:l'atiolls occupations Oçç\lp¡.ti(m.~: súicr'ltt except support oœupations IK;(¡up;itiollS.: o\X:Upiltions: occupations fmllcr~&. m:;¡;upati()f¡s fanl\ mnnagc1'3 Sourcc: U.S. Census Bureau The Tri- VaHey talent "pool" is larger than its eurrent workforce. Only about half of the people who live in the Tri-Valley, work in the Tri-Vallcy-a figure that has ehanged little in thc last three decades. Tn 1970,44% of residents worked in the Tri-Valley, and in 200051% of residents worked in the Tri-Valley-with the highcst pereentage in 1990 when 55% of rcsidcnts worked in the region. Tn 2000,21,400 people who livcd in the Tri-Valley commuted to Silicon VaHey to work. As Figure II·5 shows, the current talent pool actually encompasscs those who live and work in the region, those who work in the Tri-Vallcy but live elsewhere, , and those who live in the Tri-Vallcy but work elsewhere. This last group is a potential source of future talent in the regional economy~'-either as workers or entrepreneurs. 36 ,,, :::2. 01... tl.1 ;.,; I () )-, .... Figure 11-5 Tri-Valley Talent Pool Live and work in TV 61,500 Wurk in TV but don't live in "fV 78,5Z9 Live jr¡. TV, but don't work ín TV 66.3~O Source; U.s. Ccn¡¡us Hurc=:!l.u It i~ important to notc that since the last commute data was eomprehensively collectcd with the 2000 Census, a lot has changed in the Bay Area economy-"including a major economic downturn. 1l is likely that fewer Tri-Valley residents commute to Silicon Valley. Somc of the increase in new establishments in 2002 and 2003 may be attributcd to entrepreneurship by rcsidents who lost a job in another part of the Bay Area and decided to create work for themselves closer to home. In any ease, the Tri-Valley maintains a large pool of highly- cdueatcd people in high-level occupations who live in the region, and who work in the region-a critical ingredient for an innovation economy. Pipeline Another aspeet of the local habitat is the pipeline of business support resources that helps fund ideas and hring them to market through innovation and entrcpreneurship. Indicators ofthc health of this pipeline includes researeh and development dollars coming into the region, patent generation by local firms as an indicator of the generation of new ideas, and venture capital reccivcd by local firms. At the front end ofthe pipeline, fcderal spending for research and development in the Tri- Valley reachcd its highest level in 2003 at $640 million (Figure 11-6), Research and 37 40 0t)'5 q development (R&D) spending in the region has averaged an annual increase 4.5 times that of national R&D spending. Ninety-seven pereent of the federal R&D spending in the Tri-Valley in 2003 came from the Energy Department, with thc Department of Heallh (1.5%) and the Defense Department (1.4%) making up the remainder. Most eilies shared in the increa,ed spending 1rom 2002 to 2003: Live1l1lore and Dublin saw their R&D funding incrcase 4- and 3- times as much, respectively. Pleasanton's funding increased twofold. Only San Ramon saw a funding dcercase, from $1.15 million in 2002 to $1.00 million in 2003. ("i¡:un: U~6 Fedel'al R&D Spendlngt lode'ud to 1993 h..-vds ')Jill 8.00 7.0n --------..---... 6.00 .-........------.-----.. g: ~ ~.()() . m :: 4.00 . ~ ~ ...".------ .. ----. ...___.____.___n__ .. HJO 2.00 1,110 0.00 19930 "" 1995 1996 1')<)7 1"''''fI I'" 2000 2U(]1 2002 2(0) 1,,~ln~\'A\':(ITri-yll.l1fy --.lndex~~_,.,1 Soun::e: RAND Radius Database At the next stage of the pipeline, the number of patents filed by companies in the Tri- Valley has inereased steadily from 1997 through 2003, from 200 filings to 455, for an increase of 128%. The fílings arc widely distributed by city, rather than concentrated in one or two cities. Share of Patents, by city, in 2003 Danville 22% Dublin 6% Livermore 24% Pleasanton 33% San Ramon 15% 38 .... 4 \ ðb'50 Compared to the nation and California, this part of Tri-Valley's innovation pipeline has bcen getting stronger in reeent years (Figure IT-7)_ The rcgion records three times as many filings person as the state of California, and more than five timcs as many filings per person as the United States. Figul'e 11-7 Patent!! Per 100,OUO Rcsidcnb; Tti-Va.11ey Reghmt CalifDrnill~ and Ulllted Statli!'j 1993-2003 IHU .-------..-. ...-..--..-.. 11'.11 . . ---.----------.". 140 .......-----.-. s . i¡. t20 ~ ! g 100· .. ~ 8. 80 . ~ ro .- .-.,.---.---... ... ----------.-.--.. ~, _.____.__n_. ': r · -___________n .-------.-.-.. -.-..-.------..". 199'\ 1')1)4 1995 1996 1997 "" 1999 þ)(lf) :zOO! 2001 ~üo'\ Y~lIr ......Tn_VaHey ---Cll.lifDmiK U.,) l SOllrce~ U.S. Patent Office Like its ncighbor Silicon Valley, Tri-Vallcy venture capital peakcd with the technology boom in 2000, then dropped off precipitously (Figure IT-8). However, while venturc eapital investments have rccovered modestly in Silicon Valley, venture capital investments in Tri- Valley declined again from 2003 to 2004, after a slight increase from 2002 to 2003. In 2004, about $115.6 million dollars worth of venture capital was invested in the region. This level is slightly below the lcvel of investment in 1997. The downturn in investment may suggest that fewer finns are meeting thc standards of venture capitalists, but firms may also be seeking alternative funding options. 39 q'¿ CYb 5 9 "'i~urc 11-8 Venture Cllpihd to Trl-V.lley 1200 200 n_m..".'._.."'..,._____......_.. 1nno 800 600 _u"._______.....____... '00 '''' ]~.:¡~ ''''' '991 ,m 1999 2000 2001 ;!(1(1~ 2()()~ ",., Source: PriccwatcrhousßCoopcrsIThomson Venture :&onomics/National Ve;=nture Capital Association MoneyTrce Survey Place The third aspcet of habitat is thc quality of place. Although quality of place involves the blending of many attributes-many of which are difficult to measure-this section examines important indicators including the availability of commercial spaee, transportation, and housing availability. As Figure Tl-9 shows, the availability of commercial office spaee and flei< space has grown substantially sincc 200 I-a eombination of space coming available through completion of new construction and firm closures or downsizing. In some cases, space is available for direct leasing or sublctting from another organization that has a larger space it is not fully using. As a result, there is about 5 million square feet of available offiee or flex space (i.e., eommercial space that is non-offiee, non· retail). Office space eomprises 2/3, while flex space represents the othe! 1/3 of available space. Bottom line: there is much available space fo! new and growing firms. 40 L.\ ~ DbC"::/~ Figure 11-9 Va.cancy in Flex and Otñce Space H,OûO,OOO 5,000,000 . SJ1ILC~ AVJ.ill1b1~ far Dirctl L~ninl!. 30,000,000 1! 1~,{)(W,()()() ~ . ~ i 1Q./)/)I),00I.1 j ~ o t: 15,000,000 . ~ '" DSpÕ:lI;e AVlI.il¡¡bl¡j fútSubkt . Fill~d C¡)lllIlltrCial ~pa(:C" 10,000,000 1'191 19:98 1999 2000 2001 2002 2U/)3 ;:/)II~ ~Oll~ Y(:Rr S(lUrte: NeWmark aIid Company Real Estate, Inc. Tn terms of transportation, it is clear that congestion and lengthening commute times eontinuc to be an issue for the Tri-Valley region_ For ei<ample, as Figure H-1O shows, average commLlte times for Tri-Valley workers rose almost 19% between 1990 and 2000. Tri- Valley's loeation as a gateway to much ofthe inner cOre of thc Bay Area continues to put strains on thc rcgion' s transportation infrastructure. 41 Ÿ;~ Db "S' c:t Danville Dublin Livermore Pleasanton San Ramon TOTAL 16360 10431 29862 28785 20069 105507 28_7 26.2 25_3 26.9 27.3 26.7 Danville 19274 Dublin 13871 Livermore 36693 Pleasanton 31749 San Ramon 24211 TOTAL 125798 Source: US Census Bureau, 1990-2000. ovCr 16 who do not work at home. 30.9 31_1 31.3 33_3 31.3 31.7 Universe is all workers Of all the indicators of place, housing is the most troubling. In the housing area, prices havc continued to rise exponentially in thc Tri-Valley, leaving many people out of the housing market (Figure II· 1 1). In 2005, housing affordability in Alameda and Contra Costa Counties is below that of Santa Clara County (where 20% of residents can afford the median priced home) 42 L-\ 5 ð}: ';.:./1 l..·· ft'i¡::ul'"c H-l1 Housing AftonlabllU:y 40% · j 35% 8 .. ~ 30% i W% J2% ......-.--...----.-....-. 30% ~----_._-_.,._---,.,. a ~ · ¡¡ 20% S · ~ · i 15% j 10% -....-. 'õ J 5% ------ ----- _.__._.".._n__.__._...."'. . _'''''::~\.~25%:''0'":''"''='~:':=·::~'";;;;;;::;::--""25''IT ~ ".._."'''4''1:'''''- 4%""""""'."4!t ".' " ." . .n ':~~'~~~""~""\1''-OAI>.I.-.' __ . ··,:,:;f"··....- __,__'u__,__ 9% '19% ~ ..,., ~ -- - -,"" ----=-=-~- --~.. · '5 25% .~.IIII;:Ãi;;~da County -J -Oontra Costa County --4"-Sant<!! CI;¡!Jt;:r, COlll'tly Cali1arnla 13% .10% .--...----.----..-.- 0% 2000 2001 2002 2003 2004 2005 S~)I,ITCC: California A~s~)(;iation ûfRealtors As of February, only 13% of the population could afford to purchase the median-priced home in Alameda County, and only 10% of the population could afford to purchase the median- priced home in Contra Costa County. Moreover, from Dceember 2003 to December 2004, the average of the median sale price for houses in the five Tri-Valley cities rose by 20_8%_ Danville had thc highest median house price, $850,000, making that market one of the most expensive in the state. Only one region in California, the Santa Barbara South Coast, had a higher median house price than Danville. The median single family home price in Livermorc in June of 2004 was $501,000. In fact, over the last 7 years, the median home price in the Tri- Valley has increased an average of 18% pcr ycar, with only 2001 and 2002 (when the economy was in recession) slowing that rate.2 A household would have to make $1 12,000 in order to qualify for the Tri-Valley median priced home, at $480,0003, while the median household income in the Tri-Valley is closcr to $90,000. 2 US Bureau ofthc Census. Quick Facts. Last updated Feb 1,,2005_ httD://Q\lickfacts.çen~u, oov/afdJ,tatcs¡06/0641992.html 3 Calìfomia Assocìation of Realtors, HHomebuycr Income Gap Indexlt 43 l.\ lC t' b ':: (':\ Quality ofplacc has traditionally been a positive attribute for the Tri- Valley, but that advantage is now being challenged by housing that is affordable to fewer and fewer people. In fact, housing eosts are all but "closing" the region to certain groups eritieal to innovation: . "New" high-level talent (e.g., the next gencration of highly-educated talent and "newcomers" from other regions with those attributes) . Mid-level talent (e.g., support staff to top-level innovators across the economy, skillcd technicians) In addition, lack of housing options forces public servants (such as firefighters, police officers, and teachers), critical service workcrs (such as nurses), and entry"levcl workers (e.g., many young workers, hospitality workers) to live outsidc the region, increasing traffic congestion and pulling the region's quality of life at risk. New Requirements, New Questions The region has evolved into a high-quality, innovation eeonomy, which requires access to highly-educated talent, a constant now of ideas and resources for business creation and innovation, and a superb quality of life. The challenge now is to sustain and build on this initial suecess, The ingredients for suceess arc not a given; they can erode over time, Talented people can leave, or stop coming. Quality oflife can decline. Businesses can deeide to locate elsewhere. Going forward, the region will have to ensure that the necessary talent, entrepreneurial business support, and quality of life are in place to sustain the region's innovation-based eeonomy-and remain eompetitive with other regions that are working hard to do the same, This new reality raises the stakes for the region's publie, private, and other community leadership, A new level of regional responsibility is required to sustain thc eeonomie gains of the past decade, As this report shows, the challenge is beyond the scope of any individual organization, jurisdiction, or sector; it requires a truly regional, collaborative approach to focus on a talent pool, a quality oflife, and an environment for entrepreneurial support that extends aeross local boundaries. A new level ofresponsibility does not equate to a higher level ()floeal government funding or more programs during a time offiseal distress; rather, it means a new level of regional collaboration among existing government leaders (including local economie development direetors), privatc scctor leaders (including the Tri-Vallcy Business Council), and other community leaders (including education)--with all parties focused on the talent, entrepreneurial business support, and quality of life neeessary to sustain the rcgion' s innovation-based economy. Are leaders making ehoices today that support or undenninc the region's high-innovation eeonomy? In the future: 44 L\ lO:b'S g · Can thc Tri-Valley come together as a region to do what is necessary to sustain thc region s innovation economy? · Will Tri-Valley continue to have access to the talent it needs to fuel entrepreneurship and innovation if the nei<t generation of innovators cannot afford to buy a home in the region or commute to the rcgion in a timely manner? · Will Tri-Valley be able to remain a good loeation for new, small, innovative businesscs if it doesn't invest in the capacity to match entrepreneurs, resources, support, and appropriate commercial spaee? · Will the Tri·Valley benefit from innovation in its national laboratories without a practical and sustained effort to eneourage eompanies who work with the institutions to invest in the region? · Will the Tri-Valley be able to compete with other regions for innovative talent unless it invests in and conneets its agricultural, reereational, environmental, eultural, and other quality of life assets? The next chapter describes the fonnation offour collaborative action teams that will try to answer these questions. 45 L\ g D,h¡'S 1 Ill. Rising to the Challenge: Actions to Sustain 'I'd-Valley's Innovation Economy Tri-Valley's new economic role as a wellspring ofentreprcncurship and innovation creates a new comparative advantage for the region, but also raises the stakes. To succeed as a rcgion whose comparative advantage is entrepreneurship and innovation rather than primarily strategic location or low eosts, Tri-Valley must have a strong innovation "habitat"-·a combination of talented people, a strong pipeline of ideas and funding, and supportive place- based attributes such as housing, transportation, and quality oflife. An innovation region is highly dependent upon the flow of information regarding new ideas, technologies, products and services. The Tri-Valley, with such a high rate ofinvestmcnt in fedcral spending for rescarch and dcvelopmcnt, has a unique opportunity to leverage this high level of investment by developing an effective process for communication and collaboration between the National Labs, corrnnunity eolleges, research universities, medical centers and private industry. This must provide [or ei<ploralion of opportunities for joint ventures, teehnology interchange and technology commereialization. A process must also be developed whereby industry, local government, national lab representatives, and representativcs from higher education and mcdieal eenters comc togcthcr to strategieally discuss opportunities for innovation, new technologies, ventures and industries as well as the sustainability of current industry specializations. To addrcss thc ehallengcs of pcoplc, pipclinc, and place, a growing number of Tri- Valley "regional stewards" are stepping forward to sustain Tri-Valley's innovation cconomy. . Tri- Valley's public, private, and community leadership must recognize the region's new economic role and work together to ensure the region '" success. Tri- Valley must ensure that its growing base of small firms have access to the resources they need to succeed. Action: I'd-Vallev Innovation and EntrepreneurshiD Stratel!v is beim! launched to sUDDort, eXDand. and market the re!!ion's "innovation advanta!!e," provide a forum for innovative firms to connect with one another. to I!et referrals to other businesses and resources, and to work with jurisdictions to ensure local Dollcles are SUDDortive of small, innovativc companics. . Tri- Valley must leverage the innovation taking place in its national laboratories/or regional economic benefit. Action: Tri- V allev Invest is a new initiative to helD interested business Dartners of national laboratories eXDand or otherwisc invest in the rel!!on. 46 L-\Ü¡ t51 6<1 [~ . Tri-Val/ey must ensure that it has access to the talent required tofuel an innovation economy. In particular, housing is now increasingly out of reach for the next generation of innovators, just as it has been for workers who are in support jobs in innovative firms. or in education or public safety, or other lower-payingjobs. Action: Tri-Vallev Talcllt is a IIeW initiative to ellsure that the re!!ioll is makin!! best use of Its exlstln!! talent (e.!!.. svouses. rctirccs). removln!! obstacles to nous;II!! tnc IIcxt !!eneratlon of inllovators alld entreprcllcurs. and idcntifvln!! and meetln!! the workforce needs of small. innovative firms. . Tri- Valley must keep strengthening its quality of lifè. as innovative talent andfirms flourish in high-quality settings_ Action: Tr;-Vallev Oualitv of Life Is a new Initiative to cxpalld and cOllllect the multlvle assets alld amellities of the re!!lon from al!-tourlsm to arts and culture. The following sections describe the initial outeomes and strategies proposed by the aelion teams in more detail. 47 .- . "cì 50 'D)')' ':..:.;.' '. TRI-V ALLEY INNOVATION & ENTREPRENEURSHIP STRATEGY ACTION TEAM FOCUS: Promote Innovation & Entrepreneurship as the Region's Economic Development Strategy PROPOSED OUTCOMES: · A new "value statement" tor loeating in the Tri-Valley, establishing Tri-Valley's eeonomie identity as a "region of innovation and entrepreneurship". · A new regional roundtable involving pub1ie, private, and community leaders to promote Tri-Valley as an "innovative region". Roundtable will also provide a forum for regional issues. · lnerease the number and size of small, innovative firms in the Tri-Valley through strategic partnering with other firms, eustomers, and support services. · A new regional economic strategy that produees measurable growth of region's industry clusters (i.e., scientific biomedical products and services, information technology products, innovation serviccs, and business operations). PROPOSED CORE STRATEGIES TO ACHIEVE OUTCOMES: · Create a new regional marketing theme, that includes a new value statement (Tri- Valley as a "region of innovation and entrepreneurship") and defines the region's areas of differentiation. · Create regional innovation roundtable and strategy, securing speeitlc eommitments from cities and counties to implementation, including marketing the region. Considcr establishing a non-profit entity to broker collaboration among cities, private sector, and others. · Create an innovators forum that inereases the number of business to business partnerships among innovative firms in the Tri-Valley, resulting in growth of innovative finns, (e.g" cluster-focused networking events) · Create a Referral Network that increases the number of business- to-business partnerships among cluster companies (i.e., scientifie and biomedical products and services, information technology products) and innovative serviccs and business operations firms and consultants, resulting in economic benefits for both parties. Include as part of the referral network a firm placement svstem involving the cities, 48 ':; I '"", t;_\ .,......'. business parks, ete., to help innovative firms find appropriate space as their businesses grow and their needs change. · Create a web-based regional Dartnering clearinghouse that identifies the business capabilities (e_g_, list of companies, including specialized service providers, and what thcy offer), lab capabilities, (e.g., teehno10gy areas, contracting opportunities), university and community college capabilities, and financing sources (e.g., pre-venture eapital funding). Ei<plore regional partnering clearinghouse as new role for TTEC. · Create a local innovation SUDDort Dolieies brochure, a customizcd package of publie policies and procedures in eaeh Tri~Valley city to ensure a welcoming environment for small, innovativc eompanics. · Monitor economic impacts ofregional strategy over time, including growth of industry clustcrs, and revise strategy as necessary. Develop lists of current firms by cluster within each jurisdiction, including pertinent data such as cmployment, annual rcvenucs, etc. to establish baseline. Develop program to update and maintain information. · Consider the establishment of a "portfolio management" concept for each jurisdietion wherein they outline their speeifie industry clusters, determine how each cluster fits within their economic strategies, establish cffective relations with entrepreneurs to define tlleir growth needs, and obstacles or barriers to suecess. Develop programs to respond to "portfolio" needs and ensure the sueccss and growth of their portfolio clicnts. 49 51- Gb ~.)""\ TRI-VALLEY INVEST ACTION TEAM FOCUS; Encourage business partners involved with Tri-Valley's national lahoratories to invest in the region and encourage public-private partnerships that produce tangible economic benefits for the region PROPOSED OUTCOMES: · Recruit business partners involved with Tri-Valley's national laboratories to loeate company offiees and employees within the Tri-Valley Region. · Encourage pub1ie/private partnerships. Develop technology partnerships and collaborative efforts between business/health services/universities and the national laboratories. · Over time, these new investments will spawn additional, measurable economic impacts in the fOmJ of additional employees, spin-off firms, new business for other Tri-Valley firms, and thc like. · These new investments will contribute to measurable growth of region's industry clusters (i.e., scientific biomedical products and serviees, information technology products, innovation services, and business operations) · In addition, any new business spin-off directly from Tri-Valley's national laboratories will keep a regional presenee (i.e., offices, employees) in the Tri-Valley region. PROPOSED CORE STRATEGIES TO ACHIEVE OUTCOMES; · Create a high-lcvel Tri-Vallev Investment Team to work initially with Sandia National Laboratory to approaeh industry partners who are willing to be eonlaeted about the potential of investing in the region. This team will also seek opportunities for public/private partnerships and technology ventures. The Team will be co-led by Tom O'Malley of the Tri-Valley Business Couneil, Ron Stoltz of Sandia National Laboratory and Joe Gabbert, EMC/Documentum. Members of the Team include senior business executives, who can help "make the case" for loeating in the region and can assist in establishing a network to identify teehnology research needs and broker partnerships. · Compile Investment Prospects List working initially with Sandia National Laboratory. 50 5 ~ il'k '~:J q ~D · Create a Tri-Vallev Investment Package that deseribe~ the region as an "innovation center" with growing industry clusters, and includes basic information about locating operations in the region. · Develop an Investment Trackinl! Svstem that includes a "hot sheet" with the status of prospects and contact list of senior business ei<eeutives, government, education, and other leaders who agree to rcspond quickly to requests for information and assistance as the Team works with prospects. The tracking systcm also measures the economic impacts ofthcsc ncw busincss investments over time. · The Investment Team initially approaches Sandia's interested industry partners, and follows-up as neecssary to seeurc new investments in the region_ 51 ':)1..\ D1:'5-'1 TRI-V ALLEY TAI"ENT ACTION TEAM FOCUS: Create. Allracl. and Retain Innovative Talent in the Region PROPOSED OUTCOMES: · Increase the pool of innovative talent living and working in thc Tri-Valley PROPOSED CORE STRATEGIES TO ACHIEVE OUTCOMES: · HelD more spouses and retirecs to ioin the region's innovation workforce. Provide specific help for relocating couples-especially in situations whcre one spouse is recruited to a company or laboratory and the other spouse seeks a high-level position as well. Help match retirees trom companies and laboratories with firms looking for ei<pertise on a project or part-time basis. Involve Staffing and Temporary Employment agcncics in this proeess. Adapt Tri-Valley Jobs to providc these specific connections or develop Company Network. This strategy also helps offset lack of housing affordabjJity and reduee traffie eongestion by helping two-income families (and resident retirees) find work close to home. Develop rclationship with retiree organizations such as SIRS. · Assist local studcnts to gain access to work cxpcrienee programs such as: job internships and swnmer jobs. Continue employer involvement in programs that help students in their career choices, such as seienee fairs, eareer fairs, and Junior Achievement · Market thc Tri-Vallcv as a Job Ccntcr. Dcvclop employer profiles and career opportunities. (Look into whether this could be an expansion of Tri-Valley Jobs.) Sponsor Regional Job fairs to highlight local companies and focus on job opportunities for local residents Or those commuting through the region. · Expand business/education partnerships to better define earccr opportunities and workforce requirements. Consider development of Career Ladder definitions, where possible. Sponsor breakfast/lunch events to bring educators and business executives together to focus on workforce needs and edueation issues. Consider establishment of Regional Employer Advisory Board to provide continuing dialog on workforce needs and education programs_ Develop computer catalog of education and continuing education programs within the Tri-Valley region. · Reduce thc impediments to rctaining innovative talent in the Tri-Vallev bv improving housing affordabilitv. Add a new economic voice to the Tri-Valley Housing 52 55' 0bt::..5;; (1 Coalition. First, make the economic argument that even mid-level professional and technical talent is being priced out oflocal communities, endangering the long-term cconomic prosperity of the region. Mateh income levels with housing types to show mismatch. Second, focus On the risk oflosing cntry-level support and retail workers to thc San Joaquin Valley as that region develops johs closer to where people live. Third, focus on the need and opportunity for ereative community design, encouraging mixcd usc that fits the workforce needs of the emerging economy of sma1l firms in the Tri-Valley. Develop Employer Contact List of those businesses willing to write letters or appear at public hearings regarding housing issues. · Identify emerging workforce requirements and career otJPommities in small. irmovative eomoanies in the Tri-Vallev economv_ Ei<pand outreach to smaller employers to identify talent needs, cormcct companies and individuals to ei<isting programs, and create new collaborative programs, as nccessary, to produce people eapable of mccting a range of needs of small firms_ Consider establishing a "Tri- Valley certification" that outlines thc unique personal characteristics required for success in a small company and signifies that a graduate is prepared for work in sllch small, irmovative firms. · Identifv reloeation service firms that ean provide consulting to emolovment candidates considering the move into the Tri-Vallev. Provide eonsulting on regional quality of life, housing affordability, sehool quality, neighborhood values, eommutes, home financing, banking services, etc. Maintain employer awareness of the Tri-Valley Housing Opportunity Center, a collaboration ofthe regional j urisdietions that provides "one stop" counseling and education services for low income and first time homebuyers regarding affordable homes for rent or sale, aecess to public and private sector lender programs, public agency homebuyer and rental programs, and financial eounseling. · Develop information regarding chi ld care and sick child earc resources within the regIOn. 53 5~ ... """ D· '::.) '-1 ).. , c..._" TRI-V ALLEY QUALITY OF LIFE ACTION TEAM FOCUS: .Enrich Regional Quality olLife PROPOSED OUTCOMES: · Expand thc high-quality amenities attractive to companies and innovative talent bascd in th" Tri-Valley and outsidc thc Tri-Valley, rcsulting in both quality oflife and economic benefits for the region (e.g., growing business vitality, employment gains, incrcasing publie revenues) · Enhance regional Quality of Life by providing more opportunitics for loeal residents to enjoy parks, trails and open space reereation, access to locally grown agricultural products, and top level cultural arts and ""tertainment. PROPOSED CORE STRATEGIES TO ACHIEVE OUTCOMES: · Work with the Tri- Valley Business and Convention BUrOJau and the Tri-Vallcy Winegrowers Association to continue to promote thc Tri-Valley as a Destination to othcr Bay Arca Rcgions (including linking the tourism program to BART). Tout wineries, fine dining, golffaeilities, B&B's and all other regional assets. Consider initiating Motor Coaeh tour of the region, with a link to BART. Continuc to work with newspaper and magaziœ Food/Gourmet Sections to promote local food products and Livermore Valley wines. Develop expanded annual schedule of spceial events to attract people to the area - PGA Golf Tournament, Grand Prix event, music/jazz shows, bicycle races, running events, loeal parades, horsc shows and rodeos, regional youth sports events, such as swimming, soccer, or the "Next Generation" to higlllight young musieians and speeial talents. · Expand, eonnect, and promote agri-tourism assets, including dcvelopment of a "buy local" branding program and establishment of a permanent market. Develop best practices, quality standards and conscrvation teelmiques for the local branding program. Promote thc coneept to loeal agrieulturalists and potential investors to d"velop their interest in growing thc rcquired products. Consider delivery serviee [0 regional restaurants interested in locally grown products. Develop business and marketing plan. Conduct survcy of restaurants, hotels, food outlets, etc., to determinc interest in participating in local branding program. · Establish Demonstration Project involving a 100 acre sitc that includes the agrieultural products proposed for 10eal branding and involvement in the agri-tourism trail. Test eff"cts of recommended best practicc tcchniques. Test market for loeally grown products. 54 :.>ï bÖSq · Bring key people involved in tourism and lif"style busincsscs into the process to complete the conecptual dcvelopment of the Agri-tourism TraiL Create video of the coneept, overlaying key aspects of successful agri-tourism programs in other regions to help people to visualize the potential of the proposed program. Gain "buy-in" from agriculturalists, city and county officials, tourism and lif"style business owners, prosp"ctive investors, and the gcneral public. Develop a signage program that addresses all aspects of the trail, the historic loop, th" country loop and the wine & golfloop. Consider spccial actions to increase the scenic beauty of th" hills, such as increased planting of wildflowers on the hills. · Promotc arts and soeial centers, attracting national talent and shows. · Promote parks, trails, and open space reereation, health and fitness facilities. Complete the GAP MAP of thc potential regional trails system. Encourage local and regional authorities to complete master trail plans to achicve rcgional connectivity at an accelerated pace. · Attraet "Value Added" businesses to complement the agrieu1tura1 and tourism base industries. 55 ~ Q t.)',r-"~ '1 ~) IV. Vision of the Future: The Golden Valley In 1999, a shared vision for the Tri-Valley region was crcatcd, the product of hundreds of Tri- Valley residents who voiccd their aspirations in meetings and through a community survey: Our vision of the Tri-Valley region seeks to preserve the best of our past and our present. We seek to preserve our heritage as the Valle de Oro as the early Spanish settlers called the region-the beautiful and bountiful "golden valley_ '.' We also seek to preserve our new economic vitality and diversity, which have brought us a high standard of living and high levels of satisfaction with the quality oflife in our region. Ours truly is a Golden Valley, one that is rich in both quality of life and economic opportunity, where people can live well, pursue a career, engage in lifelong learning, raise a family, and build communities where their children can enjoy these same qualities in the future_ This vision is still relevant today--but thc rcquirements and responsibilities to achieve that vision have grown as the region's economy has evolved. Today, the region needs not only to preserve the best of its past, but also understand its present economic situation, and then rise to the responsibilities requircd to build a bright future. Perhaps it will be said that because regional "stcwards" stepped forward in the first decade of the 21 st century, Tri-Valley bceamc one of the nation's most attractive, thriving, and livable regions of entrepreneurship and innovation. It became known as the Golden Valley-a prime example of how to sustain cconomie prosperity and a superb quality of life through a commitment to business and community innovation. The Golden Valley's cities relain thcir ncighborhood feel, expand their quality oflife amenities, and enrich their economies with clusters of small, innovative finns that fit well into thc community fabric. These tÏrms are well-networked and fonn business partnerships easily, are well-supported by local policies, can find eommercial space efficiently, and work productively with local education and training institutions to meet their changing workforcc needs. Thcse fIrms are the core of the region's industry specializations, enabling thc Golden Valley to eompete effectively in the global marketplace. Thcse speeializations are rooted and benefit every city in the region_ The region's nationallaboratorics are not only sourees of innovation, but magncts for busincss partners who, in turn, expand their operations into the region. Thc regional ceonomy employs talented people who ean afford to live closc to their work. The mii< of housing matches the occupational distribution of the workforce, providing accessible options for young singles, families, newcomers, and others. Most importantly, Tri- Valley's regional stewards are vigilant and able to work together effectively as new challenges arise. 56 CITY OF DUBLIN BUDGET CHANGE FORM 5C\ iJb~~ D¡ CHANGE FORM # New Appropriations (City Council Approval Roquirod): Budget Transfers: _X_ From Unappropriated Reserves From New Revenues From Budgeted Contingent Reserve (1080-799.000) Within Same D""artment Aclivity Between Departments (City Council Approval Required) Other is Namc; Name; Contract Services $15,000 ...¡¡..... ¡"IJ>Ø~ Account #; 001.90400.740,000 Account #: Name: Name; Account #: N3Ine: Account #; Name: Account #~ Name: Account #~ Narne~ Account #; Name; Account #; Name; Açcount #: Account #: Fin Mgr/ASD: í.t-^L-rJ.-- ~ Signature Date: \""2- \ I. \ q- REASON FOR BUDGET CHANGE ENTRY: To fund Tri-Valley Business Couneil efforts for FY 2005-06. City Manager: Date: Signature As Approved at the City Council Meeting on: Date: Mayor: Date: Signature Posted By: Date: Signature fonní',/mdgch7lg Attachment 2