Best Practices: Regional Strategies and Innovative Approaches
As the nation emerged from the Great Recession approximately five years ago, cities and regions across the country explored strategies for creating job opportunities and rebuilding their economies. Many of these efforts are similar to the one undertaken by the Bay Area Council Economic Institute, each with the goal of creating an environment to facilitate sustainable economic growth.
This section highlights examples of regional economic strategy processes from across the United States as well as innovative efforts underway in the Bay Area.
Examples of Successful Regional Economic Strategies
Five examples from across the United States are highlighted below and provided important insights in crafting the actions for success that are detailed in Section 3. It should be noted that these planning efforts largely occurred at a time when regional economies and the national economy were still experiencing fallout from the recession. In contrast, the Bay Area has produced very strong economic growth in recent years, leading strategic efforts to concentrate on ways for the region to grow smartly and with more resilience going forward.
Los Angeles County Strategic Plan for Economic Development
Research for the Los Angeles County Strategic Plan for Economic Development began with a survey of more than 5,000 businesses operating in Los Angeles County to determine the health and concerns of industry. This survey led to a general outline that was followed by a series of focus groups and a public input stage during which 1,070 individual stakeholders with cross-sector representation helped to produce an economic development blueprint. This led to a plan with 12 objectives and 52 strategies to achieve goals critical to ensuring a strong, diverse, and sustainable economy. Five core aspirational goals were identified: prepare an educated workforce; create a business-friendly environment; enhance quality of life; implement smart land use policies, and create 21st century infrastructure.
Chicago’s Plan for Economic Growth and Jobs
World Business Chicago—the area’s business advocacy organization—chaired the plan with a steering committee comprised of the area’s key constituencies, including planning organizations, foundations, and labor unions. Working with the Brookings Institution Metropolitan Policy Program, five market levers that drive economic growth were analyzed: economic sectors and clusters, human capital, innovation and entrepreneurship, physical and virtual infrastructure, and public institutions. The plan produced 10 transformative strategies for the future of Chicago and the region, and several initiatives have already been announced: a merger of workforce development programs; business licensing reform; an Office of New Americans strategy for business assistance to immigrants; construction of a new cargo facility at O’Hare to increase exports; and formation of the Chicago Infrastructure Trust to identify and fund city infrastructure projects in partnership with private funders.
Central Puget Sound Region Regional Economic Strategy
The Puget Sound Regional Council created the Prosperity Partnership, a public-private partnership to create an economic strategy for the four-county area. The strategy includes ten targeted industry clusters in the Puget Sound region: Aerospace, Business Services, Clean Tech, Information Technology, Life Sciences & Global Health, Military, Philanthropies, Maritime, Tourism & Visitors, and Transportation & Logistics. Actions completed through the strategy secured the approval of an $8.5 billion statewide transportation partnership package with funding for capacity improvements, freight, and system efficiency.
Atlanta Regional Economic Competiveness Strategy
The Atlanta regional area consists of 10 counties surrounding the city of Atlanta. The region’s competitiveness strategy emphasized four goal areas: workers, business, entrepreneurs, and communities. Planning efforts focused on an inventory of existing initiatives, an assessment of the region’s strengths and weaknesses, and a review of economic clusters. The strategy produced numerous metrics for measuring success, including dropping the unemployment rate below the national average, doubling the number of startups coming out of universities and colleges, increasing the percentage of adults holding a college degree, and raising the ACT composite score.
Washington, DC Five-Year Economic Development Strategy
The Five-Year Economic Development Strategy came out of a partnership between city leaders and four local graduate schools of business: Georgetown, George Washington, American, and Howard. Seven sectors deemed vital to the area’s economy were identified—Federal Government, Higher Education & Healthcare, Hospitality, Professional Services, Real Estate & Construction, Retail, and Technology. Student teams were assembled to analyze each sector and create strategies, which included establishing the most business-friendly economy in the nation, creating the largest technology center on the east coast, ending retail leakage, and becoming a top destination for foreign investors.
Common themes surfaced across each of the regional and city-led efforts referenced above, including five pillars of economic development:
- Education & Workforce Development
- Business Attraction & Retention
- Entrepreneurship & Innovation
- Quality of Life
In its 2012 Regional Economic Assessment, the Bay Area Council Economic Institute previously found quality of life and innovation factors to be competitive strengths for the Bay Area. The same study also found that “areas of weakness include high housing costs, infrastructure, K–12 education, and customer service in government interactions.” As the Bay Area economy grows, these issues—as outlined previously in Section 1—remain hurdles to the expansion of opportunity and the Bay Area’s continued economic success.
Innovative Approaches from Bay Area Communities
Not only is the Bay Area home to some of the world’s most innovative companies, it is also home to innovative leaders in the public sector. As one of the initial steps in the Regional Economic Strategy Roadmap process, the Bay Area Council Economic Institute led meetings that highlighted local best practices in economic development and identified local priorities and concerns in six sub-regions: the North Bay, San Francisco, the East Bay, Santa Clara County, San Mateo County and Solano County. The following sections highlight the key themes from these six sub-regional meetings. The local best practices examples included in these sections highlight successful initiatives that cross jurisdictional borders or involve innovative cross-sector partnerships.
Manufacturing plays an important role in the Bay Area economy, as manufacturing-related jobs usually span a wide range of wage and education levels and offer career advancement. The region’s technological capabilities, which include its national laboratories and universities, give the Bay Area an important advantage in the creation of new products, and strategic partnerships have played a role in advancing innovation.
San Jose’s Environmental Innovation Center provides services for clean tech entrepreneurs and helps contribute to San Jose’s vision of a green future. In working with Prospect Silicon Valley, a non-profit technology commercialization catalyst supported by the City of San Jose, big and small companies will be able to demonstrate new technological innovations in a real world setting, helping them bring their products to the market faster.
In the East Bay’s Tri-Valley area, the presence of two national laboratories—Lawrence Livermore National Laboratory (LLNL) and Sandia National Laboratories—has generated significant economic benefits as technology advances have resulted in numerous new products being generated by companies throughout the region. Livermore Valley Open Campus, a joint venture between LLNL and Sandia, works to facilitate research cooperation between the labs and industry. Additionally, Tri-Valley’s iGATE (a part of the California Innovation Hub program) acts as a business incubator for the labs, offering R&D space to start-ups and helping to license lab technologies for commercial use.
The advancement of high-tech industries throughout the Bay Area has put pressure on labor costs and has created a need for more workers with specific skills. While many academic institutions around the region maintain workforce collaborations with industry, more programs could be focused on creating career pathways for those individuals qualified for middle-wage positions. Education serves as an important first step in facilitating this development.
In the North Bay, Sonoma County and the John Jordan Foundation have created a Career Technical Education Fund to advance industrial arts and science, technology, engineering, and math (STEM) programs by providing to schools $50,000 annually over five years.
In the East Bay, the Diablo Gateways to Innovation Consortium will receive an $8 million grant from the California Department of Education for programs designed to keep students in school and move them toward three high-demand fields: advanced manufacturing and engineering, information and communication technology, and health sciences.
In Richmond, Chevron has decided to tackle education and workforce issues simultaneously by placing a $15.5 million investment into the city. The goal is to create jobs, grow small businesses, expand job-training opportunities, and improve schools over the next five years.
While talent is often cited as a main reason for businesses locating within the Bay Area, the high cost of doing business is usually mentioned when companies are asked about drawbacks. This issue includes minimum wage requirements, workers’ compensation, and high utility costs that impact businesses across the state. Locally, issues with zoning and permitting new development can drive up costs and delay timelines. To address local issues with business attraction, the cities of San Jose, Fremont, and Santa Rosa, among others, have streamlined permit applications and created more flexible land use policies as they deal with a limited amount of land zoned for industrial uses.
The California Environmental Quality Act (CEQA) poses another hurdle for businesses, as development opponents often use it to block or slow projects through litigation. Bay Area cities have utilized more comprehensive planning processes—called Specific Plans—that can allow approval of development over a large swath of land without identifying a specific project. A programmatic Environmental Impact Review (EIR) is often adopted along with the housing, commercial, and industrial development zoned in the Specific Plan. Projects consistent with the development outlined in the plan are able to “tier” off of the programmatic EIR. Rather than completing a full project-level EIR, some of the CEQA requirements are loosened, thus reducing project processing time and cost. The North San Jose Development Project, Redwood City’s Downtown Precise Plan, and multiple areas of Oakland have utilized this approach.
To further facilitate development, the City of San Carlos authorized and established a Strategic Property Acquisition Reserve in October of 2010. The purpose of the reserve is to allow the City to purchase parcels of land that can be used for the development of projects that will aid the economic vitality of the city.
Multiple projects throughout the Bay Area will give local governments an opportunity to better develop jobs and housing connected to transportation. In the North Bay, cities have been trying to create denser housing near transportation as a way to create more affordable options with limited local traffic impacts. The Sonoma Marin Area Rail Transit (SMART) project will provide residents with their first rapid rail service option, and an opportunity for planners to deliver transit-oriented development.
In Solano County, local leaders are emphasizing the importance of the I-80 corridor connecting Vacaville, Fairfield, and Vallejo. I-80 is currently a heavy freight corridor. A coordinated strategy to attract a variety of businesses to the corridor could enable the county to provide work opportunities to a greater percentage of its residents. The I-80 corridor plan also identifies the need for future transportation to the Mare Island Naval Complex, which has been designated by the Vallejo City Council for industrial land use.
In Santa Clara County, the BART Warm Springs extension offers new connectivity options to Silicon Valley and is the first step in a route to San Jose.
While these transportation projects can lead to new development of both residential and commercial space, the Bay Area’s growth potential remains constrained by housing availability across all levels of affordability—particularly workforce housing. This is the goal of Napa County’s Work-Proximity Housing Trust Fund. The program seeks to assist low- to moderate-income workers in Napa County who intend to buy a home within 15 miles of where they work. The county provides down payment assistance to qualified buyers through a loan for up to 10% of the purchase price of a home, with the stipulation that the county is repaid 10% of the future sales price when the property is sold. Through this model, the fund will continue to support itself over time while incentivizing Napa County workers to reduce their commutes.
Takeaways from Best Practices
The examples provided above describe best practices used in regional collaborative efforts from other places as well as local innovative efforts initiated by Bay Area communities. While there is much we can learn from the experiences of other regions, there is also a great deal that communities in the Bay Area can learn from each other. The aim is to capture both dimensions in this document.
The collaborative regional initiatives were undertaken with the aim of strengthening the economy and improving quality of life through a regional perspective and approach. They help demonstrate that collaborative action among private and public sector leaders can create pragmatic action with lasting, positive outcomes.
The Bay Area is not just home to innovative companies and technology: it is also home to innovative public leaders and practitioners. A key component of the Bay Area Regional Economic Strategy Roadmap process was the series of meetings with local stakeholders that took place around the region. The purpose of these meetings was to hear directly from local leaders about the new ideas and best practices they were implementing (often hand in hand with private sector partners) and to hear about what possible actions at the regional level they would find most fruitful.
This feedback from Bay Area communities also served as a point of departure for the policy recommendations presented in the following section. These recommendations not only build from the local best practices, they will also support sub-regional efforts already underway and pave the way for the region as a whole to more formally incorporate coordination into its planning going forward—especially as it relates to communication among agencies, organizations, and levels of government that are working to create a more prosperous economy across the region.