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New local industries have emerged that export more knowledge-based, specialty, and technology-driven products and services. In 2007, The Humboldt County WIB identified six fast growing industries for the region-Targets of Opportunity. In fact, our traditional industries have provided the basis for many of these emerging businesses. Habitat restoration, sustainable forest management, organic milk, and computer network services are all examples of innovative local products and services that the world needs and wants to buy. These new industries have joined traditional natural resource and agricultural industries to diversify and integrate Humboldt County into the global economy.
Executive Summary of Targets of Opportunity
The North Coast's targets of opportunity are the region's most promising areas for economic and workforce development. They include specific industry sectors drawn from both the region's export-oriented base clusters and support sectors-focusing on the highest growth sectors in terms of jobs, wages, and firms since 1990. Each target of opportunity includes elements that are export-oriented, population-driven, and offer career potential for local residents.
Six targets of opportunity were identified, demonstrating a combination of:
- Expanding opportunity (i.e., job and/or firm growth)
- Growing quality (i.e., wage increases)
- Improving competitiveness (i.e., strong and/or growing specialization compared to California as a whole)
- Career potential (e.g., distribution of job opportunities across the occupational spectrum)
The six are (in order of size):
- Diversified Health Care
- Building and Systems Construction and Maintenance
- Specialty Agriculture, Food, and Beverages
- Investment Support Services
- Management and Innovation Services
- Niche Manufacturing
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The six targets of opportunity are growing faster than the rest of the region's economy-particularly the private sector economy. Over the last decade and a half, they have proven to be long-term sources of structural economic growth, expanding even through short-term economic cycles.
- Together these sectors comprise 39% of the region's private sector employment (2004)-up from 30% in 1990. They also comprise 53% of the region's private sector wages.
- Together, they grew 37% in employment during this period, while the private sector economy as a whole expanded by only about 4%. The government sector grew 33% during this same period; however, the public sector accounts for only about one-quarter of regional employment.
- The number of firms in these sectors combined jumped 23%, while the total firms in the entire regional economy increased only 1.5% between 1990 and 2003 (the year with the latest comprehensive data available).
All or most targets of opportunity share key characteristics:
- All six have grown in employment, all of them faster than the region's total job growth of 8%. The targets of opportunity have experienced growth rates ranging from 14% to 125% during the 1990-2004 period.
- All six have experienced growth in real wages (i.e., wages adjusted for inflation) over the 1990-2004 period, all of them faster than the region's total wage growth of 6%. The targets of opportunity have experienced growth rates ranging from 10% to 26% over this period. Five of them pay an average wage higher than the regional average.
- All six have increased or essentially maintained their employment concentration-a measure of their competitiveness-relative to the state average over this period.
- Five of the six have far outpaced the regional growth rate in establishments. The growth rate in number of firms in Management and Innovation Services (80%), Diversified Health Care (34%), Investment Support Services (22%), Niche Manufacturing (19%), and Specialty Agriculture, Food, and Beverages (11%) are all much greater rate than the regional economy as a whole (1.5%).
- All of them offer employment opportunities at the lower, mid, and higher levels of the occupational spectrum. All of them have people working in occupations that are projected to be among the top 50 fastest-growing jobs in the region in the coming decade.
- All of these targets of opportunity have not only a track record of growth, but prospects for future expansion, especially if they can find the skilled talent they need. Employers involved in focus groups in each area identified specific opportunities for future growth, which are described in this report.
Together, these targets of opportunity are important to every county in the region. While the larger counties of Humboldt and Mendocino naturally have much more of the employment, these sectors are also major contributors to the economies of Del Norte, Siskiyou, and Trinity. In fact, targets of opportunity are responsible for 53% of all the private sector wages paid in the five-county region. Both larger and smaller counties alike rely on targets of opportunity for the majority of their private sector wages, as the chart below shows. It is clear that all five counties have a stake in these targets of opportunity-and would likely benefit from working together to ensure the success of these industry sectors.
The North Coast targets of opportunity include about 70 high-performing industry sectors, selected from among hundreds of sectors across the five-county economy. These sectors have demonstrated over a 15-year period that they have staying power: they have continued to move forward through the ebb and flow of several business cycles. They represent a sustained, structural shift in the North Coast economy: targets of opportunity have emerged as other areas of the economy have receded. Together, they now directly account for more than one-third of the private sector employment and one-half of the private sector wages-and their impact is much greater as the employees and firms in these sectors buy other goods and services in the region.
For all these reasons, we recommend that the North Coast focus on targets of opportunity as their top economic and workforce development priorities. Specifically, this means:
- Prioritizing and aligning workforce and economic development resources to these high-potential targets of opportunity.
- In terms of economic development, encouraging entrepreneurship and support innovation in each target of opportunity-focusing on business creation and expansion of existing firms in sectors with a track record of growth in the North Coast region.
- In terms of workforce development, preparing people for career progressions in each target of opportunity. In particular:
- Preparing entry-level production and related workers while moving up promising employees into mid-level positions (e.g., Niche Manufacturing; Specialty Agriculture, Food, and Beverages; Building and Systems Construction and Maintenance)
- Creating a comprehensive health care career initiative-recruiting residents for education and training that enables them to move into and through lower, mid, and higher level occupations in Diversified Health Care.
- Building awareness in the region (e.g., among Humboldt State University students and recent graduates, highly-skilled but under-employed residents) of growing higher-level employment opportunities (e.g., Management and Innovation Services, Investment Support Services, and others).
- Targeting occupations for recruitment, education, and training that are critical to multiple targets of opportunity and are expected to grow in the future (e.g., accountants, customer service representatives, computer support specialists, truck drivers).
- Encouraging and supporting collaboration within targets of opportunity to build on their economic success. For example:
- Within Specialty Agriculture, Food, and Beverages, forging collaboration among businesses in marketing/branding, transportation, employment, purchasing, distribution, and other areas that could help all partners grow. An immediate opportunity: coordinating outflows among multiple producers and share loads to ensure full trucks leaving region.
- Within Diversified Health Care, forging collaboration among providers to create a new integrated model of delivery, which will improve care, increase access, expand economic vitality, and grow employment opportunities.
- Across all targets of opportunity, creating a partnership to market the economic potential and career opportunities to specific audiences-such as youth, working residents who are candidates for careers in these target areas, or talent living outside the region who may want to return or move to the region.
The next step is to create the Redwood Region Targets of Opportunity Project. The Project will build on this initial report, disseminating its results and focusing the region's public, private, and civic leaders on growing the targets of opportunity. In particular, it will engage employers directly in partnerships to meet their economic and workforce development needs, beginning with the recommendations outlined above. With concerted action, the region can ensure that its targets of opportunity are growing wellsprings of prosperity.
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Fastest Growing Industries on the North Coast
Diversified Health Care
Building and Systems Construction and Maintenance
Specialty Agriculture, Food, and Beverages
Investment Support Services
Management and Innovation Services