Why Our Region Must Learn from Silicon Valley
Silicon Valley is it’s own world. As much an idea as a place, it is our planet’s single most important tech innovation center. A place that contains companies with more cash reserves than whole countries; where cutely named firms that didn’t exist a few years ago are toppling whole industries. If you want to find the center for global business disruption, it is here, just 100 miles away from us. Yet more profound, Silicon Valley is also the place that, enabled by technology, is also disrupting cherished social contracts we have held between us for the past 300 years, and causing everyone to rethink them. Between employee and employer. Between student and teacher. Between residents and their government.
So when the annual “State of the Valley” conference comes each February, hosted by Joint Venture Silicon Valley, a Valley Vision-like organization led by my good friend Russ Hancock, I make a point to attend. This is where I get a heavy dose of what’s coming – the future we want, and things with foresight we might avoid.
Over 1,000 attendees from business, government, education, nonprofits, and neighborhood groups sat at attention to hear the latest update of the Silicon Valley Index – a wide-ranging set of measures that look at the health of Silicon Valley from all angles. It’s similar to checking your vital signs with your doctor each year, only it’s for a whole community.
The Bay Area added 107,000 new jobs since last year; 47,000 in Silicon Valley. The unemployment rate is now 2.3%, a rate never seen in the 20-year history that Joint Venture has issued reports; effectively full employment. Twenty-five percent of the Silicon Valley workforce is composed of tech company employers, but Russ acknowledged that business categories are blurring, making counts like these unreliable. His example? Uber is officially classified as a transportation company, not a tech company.
In the past 12 months Apple and Facebook alone account for half of all tech job growth. It seems we are going back to the future, quipped Russ, when firms like HP and Intel dominated the Valley in the 70s and 80s.
As for life in Silicon Valley, a person’s average annual earnings (all forms of compensation) is now $130,000. That’s double the national average. Same for the median household income. But with this stratospheric growth and wealth comes huge challenges.
Silicon Valley has the nation’s highest housing prices. Five of the nation’s top 10 housing re-sale markets are in the Valley. With the outlay required for just an average down payment, a family could buy an entire house in one of the square states, Russ said. Silicon Valley cities permitted just 12,000 new housing units, yet the area added nearly 4x the jobs in the same period. Sadly, just 287 of those 12,000 new units are affordable to median income residents there. Most are high-end homes.
Mobility is the Valley’s other major challenge. Daily traffic congestion continues to rise – it now takes the average commuter 58 minutes to get to work every day, one-way. He explained that 117,000 people per day leave San Francisco for work in Silicon Valley, and 120,000 people leave Silicon Valley to work each day in San Francisco, crossing paths on deadlocked streets and highways. Transit ridership is in decline but – in a bit of good news – CalTrain daily ridership has risen steadily each year.
This conference was not just a window into an advanced economy with all its societal opportunities and problems that we can learn from, but a message from a near neighbor whose forces directly affect us. There’s evidence that our home and rental markets are feeling the effects of the Bay Area’s troubles. Yet data also shows that our high quality of life, energetic urban spaces, desirable communities, and amazing recreation and open spaces are recruiting growth, especially from young professionals.
What does this mean for us?
Valley Vision is holding meetings with experts and bringing together business, government, and community leaders to grapple with these issues. An example: this week the Valley Vision board met with the leader from the Sacramento Area Council of Governments, James Corless, and his team, together with Barry Broome from the Greater Sacramento Economic Council, Darrell Teat from the Sacramento Metro Chamber, and Pat Fong Kushida from the Sacramento Asian Chamber. The 3-hour discussion centered on the Blueprint for Transportation and Land Use and its agreements about growth, the upcoming $35 billion Metropolitan Transportation Plan, our region’s competitive growth strategy, and our connections to the Bay Area.
These discussions are being informed by data and evidence. On behalf of the region, Valley Vision recently hired the Brookings Institute, a global research group based in Washington, DC, to conduct an “economic stress test” on our region to outline our competitive strengths and risks, both short and long-term. GSEC, Valley Vision, the chambers, SACOG, and other workforce and community groups are supporting this shared effort, and banding together to use these findings to inform action.
I love the quote from Robert Kiyosaki that “your future is created by what you do today, not tomorrow.” It’s a truth we should all live by in this profoundly disruptive age, on full display at the State of the Valley this year. This is also why Valley Vision exists – to help us plan and act to build the future we want. We hope you join us.
To collaborate or stay up-to-date with Valley Vision’s work, please subscribe to Valley Vision’s newsletters or contact us.
Bill Mueller is Chief Executive of Valley Vision.
Study Finds Workforce Shortage in Construction Sector
New research shows projected shortage of more than 7,000 workers annually over next five years
SACRAMENTO, CA — Valley Vision and the Center of Excellence at Los Rios Community College District released research findings today assessing the needs of the construction industry cluster, including a comprehensive workforce assessment.
“The impact of the recession that began in the late 2000s has cast a long shadow on the construction industry in California and its regions,” said Aaron Wilcher, Director of the Center of Excellence. “Unlike other sectors, overall construction value has not returned to pre-recession levels when residential construction was especially hard hit.”
Top-level findings from the research include:
- The construction cluster contributes about $34.8 billion in industry output, 221,300 jobs and $17.4 billion in labor income to the Sacramento region.
- For every job created in the construction cluster, 1.2 jobs are created elsewhere in the economy.
- The region is woefully undersupplied in terms of the number of skilled workers available.
- Workforce shortages pose a critical concern for the region and the industry.
- Occupations with the largest shortages include carpenters, construction managers, electricians, real estate professionals, and heavy equipment operators, engineers, and plumbers and pipefitters.
- Other occupational pain points include estimators, sheet metal workers, HVAC installers and mechanics, and welders.
- The construction industry provides numerous career opportunities in well-jobs; career awareness is one challenge industry faces in attracting workers.
These and other findings were revealed today to more than one hundred attendees at a forum in Rocklin where Valley Vision facilitated discussion with education, workforce and industry partners around critical skills gaps, projected employment needs, education and training resources, and supply gaps. An employer panel discussion included participants from the Associated Building Contractors of NorCal, the North State Building Industry Foundation, Otto Construction, the Sheet Metal Workers Local Union 104, Teichert Construction, and Villara Building Solutions. The event was also a forum for gathering input on how to align and coordinate a regional workforce system that betters supports the construction industry cluster and to explore how system leaders can partner in ways that best address industry challenges.
“As part of our mission to support a 21st-century talent pipeline for the Capital Region, we partnered with the Los Rios Center of Excellence on this groundbreaking analysis of the construction industry,” explained Valley Vision CEO Bill Mueller. “The forum that followed gave industry leaders an opportunity to weigh key findings and to identify priorities for education and workforce programs, Strong Workforce investments, and new partnerships to better meet industry needs for this important sector of our economy.”
Valley Vision’s interest is to better understand the occupational gap impacts on construction and its sub-clusters and to provide a starting point for engaging employers around workforce development strategy and joint action planning. This research provides vital information to educational institutions, construction industry employers, and regional workforce stakeholders, who are now better positioned to work together in planning investments, coordinating training and recruitment, and addressing short and long-term employment challenges.
The research was made possible by the generous support of JPMorgan Chase & Co, the Los Rios Community College District, the Sacramento Employment & Training Agency, Golden Sierra Job Training Agency, North Central Counties Consortium, and Yolo Workforce Innovation Board.
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For 25 years and with offices in Sacramento and Stockton, Valley Vision has brought people together from across a political and geographic spectrum to design solutions to big regional problems. Valley Vision is a trusted interpreter, commentator, forecaster and work partner for community inspired solutions and widely recognized as a leading research, civic planning and action agency that takes an independent and systemic approach to economic, social, and environmental issues.
Innovate Sac Showcases New Partnerships and Cutting-Edge Tech
Following the announcement of Dale and Katy Carlsen’s $6 million gift to Sacramento State, which will establish the Center for Innovation and Entrepreneurship, Sac State’s Alumni Center was the perfect backdrop for Innovate Sac. The event, one of a series of activities planned during Global Entrepreneurship Week, served as the launch for the vision of the City of Sacramento’s Urban Technology Lab (SUTL), an initiative of the City of Sacramento.
The event was presided over by Monique Brown, of iHub, who set the stage for the event and was followed by an energetic presentation by President Robert Nelsen who shared his vision for the region as a center for innovation, and the importance of the new Center as a symbol of prosperity for the entire Sacramento region.
Sacramento Mayor Darrell Steinberg gave an inspiring presentation on the growing significance of Sacramento as a key innovation partner, an idea supported by several innovative projects from high-profile companies and organizations launching initiatives at our doorstep, from Verizon’s 5G Network to an autonomous vehicle partnership. Addressing the theme of community and improving the lives of all, Mayor Steinberg went on to address more serious social matters including a $100 million pilot project that had been approved to support homeless services across the City and County. He closed out his presentation with a call to action to continue to raise Sacramento’s profile by communicating these successes through our own networks.
The event’s headline speakers Aaron Frank, Faculty at Singularity University and Dr. Austin Brown, Executive Director of the UC Davis Policy Institute for Energy, Environment, and the Economy, followed suit. Both touched upon the reasons for the exponential growth in technology advancement we are witnessing and how increased accessibility to the common man will further speed up innovation and disruption across all industries. Mr. Frank’s presentation explored the impact of Moore’s Law on technology from batteries to computers and offered us a glimpse into the future of what might be. He then went on to address the seismic shifts in workforce that we need to be prepared to address. Dr. Brown of UC Davis, spoke on the positive impacts of technology advancements on the environment and overall efficiencies that technology was bringing to society. He went on to address the risks associated with unintended consequences that were by nature inherent to technology advancements and which consumed a majority of his team’s energy and focus as they attempt to identify issues and mitigate their negative effects.
Louis Stewart, Sacramento’s recently-appointed Chief Innovation Officer, closed out the event with a brief presentation of the proposed SUTL. The Lab will serve to engage the community to transform Sacramento into a living laboratory to develop, test, deploy, replicate, and scale new technologies, products, and services that will accelerate quality of life improvements for all residents. Mr. Stewart went on to highlight that advances in technology and technology for technology’s sake are not what drives Sacramento nor its policies and projects, but rather how technology can help the greater good so that everyone benefits. Sacramento, he stated, is well positioned to be competitive across numerous industries including urban technology, biotech, and Agtech.
The event was an encouraging reminder that our ability to shift and evolve as a region to benefit from these technological advancements is by working together. Without the support of our local employers and the academic community in the region we cannot build a skilled and viable workforce that can address changing occupational demands. We cannot properly fund essential programs nor create effective policy without the support of our city leaders and non-profit organizations.
At Valley Vision we know this to be true and since 1994, we have driven transformative change for Northern California. Our contributions have improved quality of life by building strong communities, a healthy environment, and economic vibrancy. Valley Vision has an active portfolio of projects focused on innovation (Slingshot) and workforce development projects (Capital Region Workforce Action Plan) supported by key partners such as JP Morgan Chase, Los Rios Community College District and the regional Workforce Development Boards.
Take a moment to learn more about these exciting developments in our region led by Valley Vision:
- Slingshot: SlingShot is an initiative of the California Workforce Development Board (CWDB) to encourage and support regional partnerships across the state to engage in new collective actions around innovation workforce challenges. The Sacramento region’s SlingShot project is focused on building an ecosystem where innovation thrives, and business startups can be successful.
- Capital Region Workforce Action Plan: Currently we have four independent and active projects that are set on achieving the same outcome: to develop a seamless, collaborative and equitable system which engages all levels of academia, employers, regional political leaders, Chambers of Commerce, PBIDs, Workforce Development Boards and non-profits to assure a strong and viable workforce and as a result a vibrant economy that benefits all levels of our community.
Authored by Lucie-Anne Radimsky, with contributions from Trish Kelly, Tammy Cronin, and Meg Arnold.
Manufacturing the 21st Century Workforce
Manufacturing is alive and growing in the Capital Region – just look at our new maker spaces, new manufacturing workforce programs at our community colleges, and K-12 kids participating in robotics programs!
With a skilled workforce, manufacturing can thrive, innovate and provide great “middle skill” jobs for workers across the region. As part of the Capital Region Workforce Action Plan, Valley Vision has been working with diverse partners, employers and stakeholders across the region to elevate awareness of career opportunities in manufacturing, close the manufacturing workforce skills gap and provide a voice for manufacturers. Valley Vision also supports the food and beverage manufacturing cluster as part of Central Valley AgPlus, through our federally designated program.
In September, Valley Vision held a well-attended and energetic manufacturing forum to explore workforce opportunities and challenges, in collaboration with the Power Inn Alliance, Sacramento City Council Member Eric Guerra, Los Rios Community College District, Sacramento State University, Hacker Lab, the Office of Congressman Ami Bera, and workforce boards. The Power Inn Alliance is home to more than 60% of Sacramento City’s manufacturing employment. Dubbed “Let’s Talk Manufacturing,” 120 employers, educators, and system partners gathered at Depot Park to hear from key employers about their most pressing workforce needs and skills gaps, priorities for development of new community college Career Education programs, and as importantly, to help form an ongoing network of employers, educators, economic development and workforce partners to advance manufacturing. In addition, participants had the opportunity to provide input for a new Sacramento Innovation Center to be located near Sacramento State University. The idea is to create a manufacturing ecosystem to connect students and workers to skills training and upgrading, from K-12 to higher education and maker spaces.
On Friday, October 6th we celebrated National Manufacturing Day 2017. Manufacturing events and activities held across the Capital region illustrate the vibrancy of modern day manufacturing, from innovative dairies/beverage producers and breweries large and small to highly sophisticated machining technology and global paper company. Over the course of the day Valley Vision participated in and/or helped organize four events highlighting and celebrating manufacturing careers at International Paper in Elk Grove, HP Hood in Sacramento, Claimstake Brewing Co. in Rancho Cordova, and the opening of the Haas Technical Education Center at Sierra College in Rocklin. The Center, according to Willie Duncan, President of Sierra College and Valley Vision board member, is the “most state of the art manufacturing lab at a community college anywhere.”
The visit to HPHood – with more than 260 employees and millions of dollars of investment in state of the art beverage producing facilities, followed the Marking your Mark Competition sponsored by the Power Inn Alliance to provide capacity support to a manufacturing entrepreneur over the coming year. This is a creative approach to growing new manufacturing companies and jobs, and Tracey Schaal, Executive Director, organized an innovative package of resources for the winner, Lifeline Lift. Trish Kelly, Valley Vision Managing Director, enjoyed the opportunity to participate as a judge in the Competition.
At Claimstake Brewing Co., participants were warmly welcomed by the city of Rancho Cordova Mayor Donald Terry, Council members and staff, the Chamber of Commerce, Supervisor Don Nottoli and owners Mike and Brian to tour this brewing facility and community gathering space, and hear about how we all need to work together to help companies grow by providing a skilled and ready workforce. The City is becoming a location for beverage manufacturing with a new Barrel District encompassing breweries, a meadery and a distillery. As Congressman Bera noted, “Each city and each county in the region has its own unique assets. Groups like Valley Vision and others are facilitating those conversations…There’s no reason Sacramento can’t be at the center of it all.” Thank you to the City of Rancho Cordova, the Rancho Cordova Chamber of Commerce, and the California Manufacturers & Technology Association for partnering and making this event possible!
Manufacturing is often thought of as a declining sector given the impacts of global outsourcing. In fact, many blue-collar workers are hurt more by a lack of skills than by globalization. Modern day manufacturing offers a smart career pathway for today’s job seekers. Over the next decade, as many as 3.4 million manufacturing jobs will become available, according to a recent article in Bloomberg Businessweek. Today’s manufacturing jobs require workers with computing, technical, basic-math, and problem-solving skills and require specialized post-high school training or certification. The Bloomberg article notes there is currently a “skills gap” that could result in 2 million of these jobs being unfilled.
The Capital region is ready to meet the challenge! Stay tuned as we visit other areas of our region to highlight our manufacturers and mobilize to meet their workforce needs.
October 11, 2017
This blog was co-authored by Tammy Cronin and Trish Kelly