FORWARD EAST BAY - SEPTEMBER 2021 - East Bay Economic Development Alliance
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EAST BAY FORWARD | Acknowledgements II ACKNOWLEDGEMENTS East Bay Forward was informed and developed with extensive input from diverse East Bay stakeholders. We are grateful for the contributions to the following organizations and individu- als who have supported the development of East Bay Forward. SPONSORS Champion Supporter Bank of America AB&I Foundry Bayer Alameda County StopWaste Transportation Commission AT&T California Leader East Bay Regional Park District First 5 Alameda County Wells Fargo Wareham Development Special Acknowledgements Special acknowledgement and thanks to East Bay EDA’s members who supported the development of this publication through valuable insights and information. East Bay Economic Strategic Economics Development Alliance Team Team Stephen Baiter, Executive Director Dena Belzer, President Carline Au, Derek Braun, Senior Associate Senior Economic Development Samantha Moskol, Associate Analyst Xian Ballesteros, Senior Economic Development Graphic Designer Analyst José Fernandez Alyson Greenlee, Senior Economic Development Analyst Jackie Keliiaa, Regional Economic Develop- ment Director Maribel Purificacion, Administrative Associate Bob Sakai, Trade & Investment Director (retired) To learn more about East Bay EDA, please visit: www.EastBayEDA.org East Bay Economic Development Alliance 1221 Oak Street, Suite 555, Oakland CA 94612 (510) 272-6746 | info@EastBayEDA.org Reproduction of this document or any portion therein is prohibited without the express written permission of the East Bay Economic Development Alliance. Copyright ©2021 by the East Bay Economic Development Alliance.
EAST BAY FORWARD | Acknowledgements III ACKNOWLEDGEMENTS Strategic Advisory Committee Members Ahmed Ali Bob, Edward Del Beccaro, John McManus, Community Affairs Lead, Square EVP/East Bay Regional Manager, Executive Managing Director, Timothy Burroughs, TRI Commercial Real Estate Services Cushman & Wakefield Executive Director, StopWaste Bryce Fennell, Hon. Carlyn Obringer, Hon. Keith Carson, Business Development Officer, Councilmember, City of Concord President, Alameda County Board of TMC Financing Rich Rankin, Supervisors Debra Gore-Mann, President, Director – Innovation & Partnerships, Brandon Cardwell, The Greenlining Institute Lawrence Livermore National Labora- Senior Management Analyst, Johnny Jaramillo, tory (LLNL) City of Livermore & Executive Director, Executive Director, Placemade Rebecca Rozen, i-GATE Carol Johnson, Regional Vice President, Hospital Coun- Dr. Karen Chapple, Assistant General Manager – cil Northern & Central California Former Chair & Professor of City & Public Affairs, East Bay Regional Gene Russell, Regional Planning, UC Berkeley Park District President & CEO, Manex Leslay Choy, Cynthia Kroll, Dr. Cathy Sandeen, Executive Director, San Pablo Economic Former MTC-ABAG Chief Economist & President, California State Development Corporation Asst. Director for Economic Develop- University East Bay Jennifer Cogley, ment & Research Dr. Raja Sengupta, Deputy Director – Tess Lengyel, Professor, University of California, Community Relations, Bayer Executive Director, Alameda County Berkeley Amalia Cunningham, Transportation (ACTC) Kristin Spanos, CEO, Assistant Deputy Director, Contra Costa Ruben Lizardo, First 5 Alameda County County Department of Conservation & Director – Local Government & Danny Wan, Development Community Relations, UC Berkeley Executive Director, Port of Oakland Ronak Davé Okoye, Ken Maxey, Judy Wetterer, Director, SPUR Oakland Director of Government Affairs, Comcast Communications Director, Wareham Development Focus Group Participants Cathy Adams Jesse Denver Kimberly Koempel Tom Salinaro Dr. Berna Aksu Hilary Dito Jessica Li Carmelo San Mames Emily Alvarez Donald Frazier Gaylon Logan, Jr. Joshua Simon Keith Archuleta Shari Godinez Eric Mathis Elaine Schroth Dawn Argula Sherry Hirota Muhammad Nadhiri Meri Soll Claudia Arroyo Rob Hope Aaron Ortiz Marsha Tokuyoshi Julina Bonilla Chris Iglesias Andrew Park Dr. Jennifer Tran Aisha Brown Carlyn Johnson Joe Partida Kevin Thorne Shomari Carter Drew Johnston Elizabeth Redman Cleveland Evodio Walle Alejandra Chamberlain Tina Kapoor Ingrid Roberson Scott Wilson Carl Chan Michael Katz Jamesine Rogers Gibson Jessica Chen Meemee Khine Anita Russell Sarah Church Miya Kitahara Madlen Saddik Images in Cover & Acknowledgements: San Leandro Tech Campus (Courtesy of City of San Leandro); Jupiter Laser Facility (Courtesy of Lawrence Livermore National Lab); Liberation Park (Courtesy of Black Cultural Zone); Downtown Berkeley BART (Photo by Patrick Civello); Jack London Square (Courtesy of Port of Oakland); Saildrone Mission Control (Courtesy of Saildrone); Ohlone College’s Smart Manufacturing Technology Program (Courtesy of Ohlone College); Richmond-San Rafael Bridge (Photo by Neal Parish)
EAST BAY FORWARD | Table of Contents IV TABLE OF CONTENTS Acknowledgements I EXECUTIVE SUMMARY 5 II INTRODUCTION 11 III THE EVOLVING EAST BAY 16 Pre-Pandemic Economic Trends 18 The East Bay’s Pre-Pandemic Workforce 25 COVID-19’s Impacts on the East Bay 29 Summary of COVID-19’s Impacts on the 39 East Bay Economy IV LOOKING AHEAD TO A 41 POST-PANDEMIC FUTURE Legacy Assets 42 Industries to Watch 43 Venture Capital Investments 50 V FULFILLING OUR PRINCIPLES: 57 PRIORITIES FOR ECONOMIC RECOVERY AND PROSPERITY IN THE EAST BAY VI APPENDICES 80 Appendix A: Gross Regional Product by Industry 81 in the East Bay Appendix B: Fastest-Growing Industries 83 by Payrolled Business Growth Appendix C: Occupations to Watch 86 Appendix D: About EMSI Data 88 VII ECONOMIC PROFILES OF EAST BAY 90 SUBAREAS Northern Alameda 91 Southern Alameda 93 Central Alameda 94 Tri-Valley 96 Eastern Contra Costa 97 Western Contra Costa 98 Central Contra Costa 99
EAST BAY FORWARD | List of Figures V LIST OF FIGURES Figure 1 East Bay at a Glance Figure 23 Vacancy Rate by Commercial and Industrial Use in the East Bay, 2010 to 2021 Figure 2 The Seven East Bay Subareas Figure 24 Strategic Assets and Advantages in the Figure 3 All Jobs in East Bay per Sq. Mi, 2018 East Bay Figure 4 East Bay Jobs by County, 2014 and 2019 Figure 25 Top Ten Manufacturing Sectors by East Bay Figure 5 East Bay Jobs by Industry Sector, 2019 Employment, 2019 Figure 6 Rate of Job Growth by Industry Sector in the Figure 26 Select Subsectors in Creative Technology East Bay and Bay Area, 2014 to 2019 and Design Figure 7 Industry Employment as Share of Total Figure 27 Biomedical Industry Employment by Busi- Employment in Alameda and Contra Costa ness Category: Alameda County, 2014-2020 Counties, 2019 Figure 28 Logistics Employment in the East Bay, 2014 Figure 8 Employment Growth by County and Indus- to 2019 try Sector, 2014 to 2019 Figure 29 East Bay Venture Capital Investment in Figure 9 Concentration of East Bay Industry Sector Millions, 2012 to 2020 Employment in East Bay, Compared to Bay Figure 30 Venture Capital Investment by Category Area, 2019 (Displayed as Location Quotients) across Bay Area Subregions, 2020 Figure 10 Alameda County: Share of Jobs and Gross Figure 31 East Bay Venture Capital Awards by Deal Regional Product by Sector, 2019 Type and Total Funding, 2020 Figure 11 Contra Costa County: Share of Jobs and Figure 32 Venture Capital Investment Funding in the Gross Regional Product by Sector, 2019 East Bay by Category, 2020 Figure 12 East Bay Educational Attainment for People Figure 33 Top 20 Venture Capital Awards in the East Age 25 and Over, 2015-2019 Estimate Bay in 2020 Figure 13 Educational Attainment by Race/Ethnicity Figure 34 Venture Capital Funding by Subarea, 2020 in East Bay for People Age 25 and Older, 2014-2018 Estimate Figure 35 Venture Capital Investment by Category and Subarea, 2020 Figure 14 Snapshot of Median Hourly Wages by Race/Ethnicity and Education in the Bay Figure 36 Venture Capital Investment by Subarea, 2020 Area, 2014-2018 Estimate Figure 37 Jobs and Gross Regional Product by Industry Figure 15 Educational Attainment of Population 25 and County, 2019 Years and Older: Some College or Less, Figure 38 Comparison of Gross Regional Product by 2015-2019 Estimate by Zip Code Industry and County, 2019 Figure 16 East Bay Projected Job Openings by Wage Figure 39 Industry Subsectors that Added the Greatest Level and Educational Requirement, 2018 Number of New Establishments in the East to 2028 Bay, 2014 to 2019 Figure 17 Change in Jobs by Industry in East Bay, Figure 40 Fastest-growing Industry Subsectors by January 2020 to January 2021 New Establishment Formation, Alameda Figure 18 Vulnerable Jobs in the East Bay, 2018 County, 2014 to 2019 Figure 19 Unemployment Rate in East Bay, January Figure 41 Fastest-growing Industry Subsectors by 2020 through July 2021 New Establishment Formation, Contra Costa County, 2014 to 2019 Figure 20 East Bay Unemployment by Race/Ethnicity, 2020 (Bay Area Equity Network) Figure 42 Middle-Wage Occupations with Most Projected Openings in the East Bay, 2018 to 2028 Figure 21 East Bay Unemployment Claims vs Labor Force by Gender, 2020 Figure 43 Top Posted Occupations that Require a Bachelor’s Degree in the East Bay, May to Figure 22 Unemployment Claims to Labor Force August 2021 Ratio, 2020
EAST BAY FORWARD | Executive Summary 5 I. EXECUTIVE SUMMARY The COVID-19 pandemic has forced many changes in the global economy, some from the rapid accelerations of existing trends, and others from new economic patterns and ways of doing business. “East Bay Forward” provides an assessment of how the pandemic’s impacts have played out in the East Bay, and what this means for the region’s economy going forward. East Bay Forward establishes a roadmap of twelve shared priorities for regional leaders to address our most pressing challenges, including the growing economic and social divides that pervade our communities. This initiative will move the East Bay toward a new economic paradigm to capitalize on the many existing and potential opportunities our region offers, ensuring that our diverse businesses and residents can grow and thrive. Sunrise over the Altamont Pass. Photo by: Dawn Humphrey.
EAST BAY FORWARD | Executive Summary 6 East Bay Forward is being led by the East Bay • Realign and reorganize local and regional Economic Development Alliance (East Bay networks and systems that influence and EDA). East Bay EDA is a regional economic shape issues related to business climate, development organization with more than 150 land use and infrastructure, workforce members that serves as the regional voice and development, and community health and networking resource for strengthening the well-being. East Bay economy, workforce, and quality of Six guiding principles—developed with exten- life for our residents. We believe that now is sive input from diverse East Bay stakeholders— the moment to undertake this strategic effort underpin the priorities of East Bay Forward. to address many long-simmering issues of These principles must guide the efforts of East racial, gender, income, and spatial inequality Bay EDA’s stakeholders and compel us to be: in the East Bay. It is also time to capitalize on 1. Connected. Many of our region’s great- our economic strengths and new investment est challenges are inextricably linked, opportunities coming from multiple public and requiring coordinated regional advocacy, private activities. and policy actions and investments that To realize this vision, everyone involved in the address multiple challenges and deliver East Bay economy will need to be engaged in shared benefits. these efforts—business and nonprofit leaders, 2. Equitable. An equity-first approach education professionals, elected officials, local ensures that current and future genera- governments, community members, and other tions will achieve meaningful economic stakeholders. We must increase investment inclusion, access to opportunity, and and build greater resilience into our human upward mobility. and physical infrastructure if we are to steer our region toward a healthy and sustainable 3. Measurable. For our region to move economic recovery that supports our business- forward, we need to be able to measure es and residents. And we must remain com- meaningful indicators and outcomes mitted to this goal by charting a new course indicating how we are doing with accom- forward rather than merely succumbing to the plishing our goals. pull toward business as usual. 4. Regenerative. Supporting clean and East Bay Forward provides a framework to renewable investments to support the undertake this exciting transition based on just transition to a dynamic, healthy, and East Bay EDA’s core activities, which include circular economy has immense potential providing informed and data-driven guidance to drive innovation and growth, as well for leaders to: as yield economic, environmental, and community benefits. • Maximize the East Bay’s opportunities 5. Resilient. From destructive wildfires to within the greater Bay Area and Northern future public health crises, there is an California economies and position the urgent need to mobilize and prepare for diverse subareas of the East Bay to benefit complex, intersecting disasters and to from them. future-proof our physical and human • Promote economic recovery efforts that assets to provide maximum resilience reduce income and wealth disparities by against ongoing and future challenges. gender and race. 6. Transformational. Public and private • Promote efforts around regional emer- investment must focus on dismantling gency preparedness and safeguarding barriers and creating opportunities for public health to protect against future long-term and systemic solutions; it is economic shocks. imperative that we do more than pro- mote incremental change.
EAST BAY FORWARD | Executive Summary 7 East Bay EDA will pursue the priorities out- COVID-19’S IMPACTS ON lined in East Bay Forward by coordinating with THE EAST BAY ECONOMY various East Bay stakeholders across four dif- The COVID-19 pandemic accelerated and ferent “focus areas.” These focus areas repre- amplified trends and conditions already sent specific topics around which East Bay EDA underway in the East Bay, and brought about brings together members and partners with transformational changes that will forever specific knowledge, networks, and resources. shift our old ways of living and working. The These focus areas include: conclusions of data analyses described in 1. Business Climate: Encompasses efforts Section III’s “The Evolving East Bay” section to attract, grow, and retain businesses of of this report found that the COVID-19 pan- all sizes and industry sectors to ensure demic accelerated and amplified the follow- that the East Bay continues to enjoy ing conditions and trends in the East Bay: the benefits of a diverse composition of • Systemic inequities: The pandemic exac- companies and industries. erbated longstanding systemic economic 2. Land Use and Infrastructure: En- and health disparities in the East Bay, par- compasses efforts to address critical, ticularly along racial, ethnic, and gender interconnected land use policy issues to lines. These disparities played out in work- support the mobility of people and goods force job stability and access to oppor- across the East Bay and beyond, as well tunity, on-the-job coronavirus exposure, as the needs for resilient, responsive physical health outcomes, mental health and safe transportation, utilities, and outcomes, and numerous other ways. other essential infrastructure systems to withstand climate-related risks and • Business Impacts of Ecommerce: Existing other disasters. trends related to Ecommerce accelerated, as people purchased a greater share of 3. Education and Workforce Development: goods on the internet. This trend primarily Encompasses efforts to advance access favored larger retailers with established to and implementation of early child- Ecommerce platforms, but also pushed care, K-12 education, higher education, smaller businesses to pivot toward expand- and workforce preparedness to ensure ing their Ecommerce and online marketing the East Bay provides a globally com- presences. The acceleration of Ecommerce petitive and diverse workforce that can will also continue to accelerate growth of access quality jobs and careers. “experiential” businesses in bricks-and- 4. Community Health and Well-Being: mortar retail locations as the pandemic Efforts within this focus area recognize recedes, including businesses such as that community safety, health, and em- restaurants, gyms, and entertainment. powerment are all critical ingredients for addressing disparities between the • Land Use Impacts of Ecommerce: Ecom- East Bay’s communities and ensuring merce growth will continue to drive reduc- greater resiliency against economic tions in total retail space required per downturns and other external shocks. resident, increased demand for distribu- tion facilities located near population cen- ters, and new opportunities to redevelop East Bay Forward’s guiding principles will and reuse shopping center sites. help us achieve an inclusive, resilient, and sustainable economic future.
EAST BAY FORWARD | Executive Summary 8 At the same time, the COVID-19 pandemic brought about several transformational changes: • Widespread adoption of remote work: This sudden transformation will have wide- ranging impacts on locations and quantities of demand for office space, design of offices, locations of demand for daytime retail and services, locations of demand for housing, and transportation needs. • Rapid adoption of telehealth, distance learning, and other digital strategies: As with remote work generally, rapid and widespread adoption of telehealth and distance learning will likely lead to a permanent expansion of these services. Mayfair Mixed-Income Housing Development at El Cerrito del Businesses also undertook and learned Norte BART Station. Photo by Lowney Architecture. from implementation of a variety of digital strategies to replace entertainment, • Housing affordability challenges: While conferences, and other activities that once federal, state, and local policies and occurred in person. assistance limited mass eviction and • Enhanced regulatory flexibility: The pan- foreclosure activity during the pandemic, demic provided a moment for governments the pandemic’s effects on workers and to prove their ability to rapidly remake laws, incomes demonstrated again how vul- policies, and regulations. Some of this ad- nerable many East Bay residents are to ditional regulatory flexibility and speed is economic shocks in our extremely high- likely to continue beyond the pandemic. cost region. • Creation of new funding resources and • Small business funding and financing programs: Federal, state, and local challenges: A relatively large share of governments deployed enormous new small businesses struggled during the resources to support communities dur- pandemic due to thin operating margins, ing the pandemic and to reinvest in the lack of capital reserves, and lack of exist- economy as the pandemic recedes. These ing relationships with traditional financial resources will have a lasting effect, pro- institutions—which posed a further ob- viding new one-time or ongoing resources stacle to accessing new federal assistance for affordable housing, workforce develop- such as the Paycheck Protection Program. ment, infrastructure investment, business These challenges were especially notable support, and numerous other needs. for businesses owned by women, people of color, and immigrants.
EAST BAY FORWARD | Executive Summary 9 OPPORTUNITIES Investments” described in Section IV’s “Look- FOR THE EAST BAY’S ing Ahead to a Post-Pandemic Future.” They include the following: POST-PANDEMIC FUTURE East Bay Forward has identified critical legacy • Manufacturing is responsible for an assets, industries of opportunity, and investment outsize share of the East Bay’s job and trends that together indicate “bright spots” economic growth, provides a high share that will support a vital East Bay economy and of entry-level middle-wage jobs, and is workforce as the COVID-19 pandemic recedes. directly linked to the Bay Area’s thriving innovation ecosystem. The East Bay’s legacy assets consist of rela- tively permanent, longstanding, and fixed-in- • Creative Technology and Design services place components of the region that support and sectors also tie directly into the Bay and shape the economy—as they have done for Area’s innovation ecosystem and attract decades or longer already. These are funda- substantial venture capital investment mental factors that establish the East Bay’s in the East Bay. This industry group is basic competitive strengths compared to other dominated by businesses related to the Bay areas, including institutions, infrastructure, Area’s computer technology industry and land use and land availability, location, and scientific research and development, but geographic features. These assets are listed also includes jobs in architecture and engi- and described in Section IV’s “Legacy Assets,” neering, media, and technical consulting. but examples include our region’s colleges and • Biomedical industries are positioned to universities that support education, innova- continue attracting major venture capital tion, and workforce preparedness; our na- investments; the East Bay plays a special- tional laboratories that support innovation; ized role within the Bay Area as a distinct our ports, airports, highways, and industrial biomedical innovation ecosystem focused lands that underpin our goods movement, on medical equipment, biotechnology, manufacturing, and innovation-oriented pharmaceuticals, and medical devices, industries and high-quality job opportunities; with strong relationships among our and our unique and diverse arts, culture, and national laboratories, universities, and open space assets that provide a sense of industry associations and accelerators. belonging and inclusivity for residents while • CleanTech activities and industries are generating economic activity and contributing attracting large quantities of venture to the East Bay’s cachet as a residential and capital investment in the East Bay and will business location. continue to grow as our society moves to East Bay Forward identified five “industries to reduce waste and carbon emissions. The watch” based on economic trends and the East East Bay’s CleanTech cluster especially Bay’s competitive assets, workforce opportu- benefits from our expansive network of nities, and recent venture capital investment firms involved in scientific research and activity. These five industries or industry groups development, advanced manufacturing, drive outsized economic output in the East Bay and construction, as well as the East Bay’s and are well-positioned to generate substantial industrial land supply. innovation, investment, business growth, and • Goods Movement and Logistics is rooted growth of high-quality jobs over the coming in the East Bay based on the Port of Oak- years. The industries are described in detail in land seaport and Airports, Port of Rich- the “Industries to Watch” and “Venture Capital mond, our rail and highway connections, and our vast industrial land supply.
EAST BAY FORWARD | Executive Summary 10 OUR TWELVE PRIORITIES FOR 3. Concentrate education, workforce ECONOMIC RECOVERY AND training, and broadband infrastructure investments that expand equitable ac- PROSPERITY IN THE EAST BAY cess to economic opportunity. East Bay Forward’s twelve critical priorities 4. Align land use policy and infrastructure together serve as a comprehensive framework investments to ensure sufficient flex- for engaging and activating efforts by East Bay ibility to respond to regional trends EDA’s many stakeholders to ensure a more around remote work, e-commerce, and inclusive, resilient, and sustainable economic related innovations. future for our businesses and residents. The priorities chart a course for responding to the 5. Mobilize the East Bay’s robust network COVID-19 pandemic’s impacts, building on our of institutions and organizations to ad- region’s assets and opportunities, and ensur- dress regional housing affordability. ing widely shared future economic growth. 6. Protect and invest in the East Bay’s Achieving that vision will require the East Bay’s industrial employment lands to support business and nonprofit leaders, education pro- economic diversity. fessionals, elected officials, local governments, 7. Secure regional and local multimodal community members, and other stakeholders transportation infrastructure invest- to work together so that their individual efforts ments to support job growth and acces- collectively build toward outcomes centered sibility. around these strategic regional priorities. 8. Position the East Bay to be a leader in This approach reflects the reality that the East sustainability and climate advance- Bay’s most pressing challenges and opportu- ments while spurring economic growth nities are shared both locally and regionally, and innovation. so our approach must combine individual and 9. Bolster the East Bay’s diversity of arts, collective decisions and actions. culture, parks, and other essential as- Section V of this report provides more sets to ensure a vibrant and cohesive details about the twelve priorities, including region. major opportunities and challenges for each 10. Expand access to health resources, priority, and examples of actions that East Bay human infrastructure investments, and EDA’s partners could pursue to support each other supports that enhance the resil- priority’s implementation. The featured case ience of our region’s most vulnerable studies serve to highlight relevant innovative, residents and workers. equity-centered, and collaborative models and 11. Develop solutions to improve public best practices in the East Bay. safety outcomes while reducing sys- 1. Prioritize delivering resources and temic biases and encounters between services for East Bay small to mid-sized community residents and law enforce- businesses—especially those most se- ment agencies. verely impacted by the pandemic. 12. Champion efforts to develop integrated 2. Promote assets and opportunities in the socioeconomic data sets and metrics to East Bay region to attract and retain a di- evaluate equity outcomes over time. verse range of businesses and quality jobs. The priorities chart a course for responding to the COVID-19 pandemic’s impacts, building on our region’s assets and opportunities, and ensuring widely shared future economic growth.
EAST BAY FORWARD | INTRODUCTION 11 II. INTRODUCTION The COVID-19 pandemic has forced many changes in the global economy, some of which came from the rapid accelerations of existing trends, and others of which represented new economic patterns and ways of doing business. This initiative, East Bay Forward, provides an assessment of how the pandemic’s impacts have played out in the East Bay, and what this means for the region’s economy going forward. Emeryville shoreline. Photo by: Rahman Hayes.
EAST BAY FORWARD | INTRODUCTION 12 EAST BAY FORWARD’S plex, intersecting disasters, and future- GUIDING PRINCIPLES proof our physical and human assets to provide maximum resilience against East Bay Forward is centered around six ongoing and future challenges. principles that are foundational to helping our region realize a future that creates more 6. Transformational. Public and private widely shared economic prosperity and se- investment must focus on disman- curity. These principles underpin each of the tling structural barriers and creating priorities outlined in this report and were opportunities for long-term and sys- informed and developed with extensive input temic solutions; it is imperative that from diverse East Bay stakeholders. These six we do more than promote incremental principles compel us to be: change. Transformational leadership and purpose-driven strategic planning 1. Connected. Many of our region’s great- must come together to not only confront est challenges are inextricably linked, failures of business as usual, but also to requiring coordinated regional advocacy, build long-term organizational capaci- policy actions, and investments that ties and cultures to sustain and imple- address multiple challenges and deliver ment initiatives and actions. shared benefits. 2. Equitable. An equity-first approach ensures that current and future genera- THE PROCESS FOR SHAPING tions will achieve meaningful economic THIS INITIATIVE inclusion, access to opportunity, and This East Bay Forward document reflects input upward mobility. from multiple sources. The process started with 3. Measurable. For our region to move reviewing the many recent studies and reports forward, we must be able to measure presenting analyses of the East Bay’s economy meaningful indicators and outcomes and workforce. Information gathered from these showing whether we are accomplishing reports was augmented with new data analy- our goals. Enhanced data collection by ses to provide a more nuanced view of the East socioeconomic and geographic lenses Bay’s changing conditions spanning the 2014 to can improve outreach, program plan- 2019 period. These new analyses also assessed ning, and monitoring of outcomes. the transformative impacts of the COVID-19 4. Regenerative. Supporting clean and re- pandemic, which started in 2020. The analysis newable investments and supporting the situated the East Bay within the context of the just transition to a dynamic, healthy, and entire Bay Area economy, highlighting the ways circular economy has immense potential in which the East Bay is both distinct from, and to drive innovation and growth, as well integrated into, this regional powerhouse. as yield economic, environmental, and Finally, several of the East Bay’s expert stake- community benefits. holders weighed in through multiple channels, 5. Resilient. From destructive wildfires to including through a Strategic Advisory Com- public health crises, there is an urgent mittee established by East Bay EDA. This group need to mobilize and prepare for com- provided feedback and direction on the analytical work and helped set priorities for the East Bay Forward initiative. East Bay EDA also conducted four focus group meetings. Three drilled more Many of our region’s greatest challenges are deeply into East Bay EDA’s three standing focus inextricably linked, requiring coordinated areas: land use and infrastructure, business cli- regional advocacy, policy actions, and investments that address multiple mate, and education and workforce; and a fourth challenges and deliver shared benefits. tapped into the expertise of other community
EAST BAY FORWARD | INTRODUCTION 13 the transition to producing green fuels, showing the East Bay’s economic resiliency. The East Bay experienced a housing boom af- ter World War II, when cities sprawled out to the east in conjunction with highway construction and an expanding BART system. Today, the East Bay is home to almost 3 million people and 1.3 million jobs. In 2019, the two East Bay counties comprised 36 percent of the nine-county Bay Area’s total population and 33 percent of Bay Area jobs (see Figure 1). While this report analyzes the East Bay as a single area, the two East Bay counties are distinct from each other, with different opportunities and challenges. In 2019, Alam- eda County accounted for approximately 67 Panorama of Berkeley skyline. Photo by: Patrick Civello. percent of the East Bay’s jobs. A large share of those jobs were in traded1 sectors ranging from biotechnology, creative professional ser- leaders. As the process evolved and specific top- vices, and information, to advanced manufac- ics or issues arose, these were further explored turing and logistics. In contrast, Contra Costa with subject matter experts. County’s economy, with only few significant The combined findings from these sources office concentrations that emerged during are presented in this report to fully tell the the 1980s and 1990s, is dominated by house- East Bay’s economic and workforce story, and hold-serving sectors, such as food services, to establish new priorities that will serve as healthcare, hospitality, and personal services. the “roadmap” to move the East Bay forward In addition, eastern Contra Costa County, in this decade and beyond. which has some of the Bay Area’s lowest-cost housing, is also relatively distant from the Bay INTRODUCING THE EAST BAY Area’s major employment centers. Two counties, Alameda and Contra Costa, com- As Figure 1 shows, the East Bay has been prise the East Bay. With an extensive shoreline divided into seven different economic subar- and a direct overland connection east to the eas, for purposes of this report’s analyses. Sierra Nevada mountains and beyond, the East Three subareas are entirely in Alameda Coun- Bay has a rich history of indigenous occupation ty, three are entirely in Contra Costa County, and as a strategic economic location. Much of and one—Tri-Valley—falls in both. the East Bay’s early industrial development was In terms of economic output, the only two fostered by the availability of land along the criti- subareas in Contra Costa County that perform cal transportation connections of the San Fran- on par with the Alameda County subareas are cisco Bay and the Delta Estuary, combined with Central Contra Costa and Tri-Valley (which the terminus of the transcontinental railroads. includes Danville and San Ramon, in Contra Some of the East Bay’s oldest legacy industries Costa County). This further highlights the dif- still operate in their historic locations, includ- ferences between the two counties. Figure 2 ing the petroleum refineries along Contra Costa shows where the seven subareas are located. County’s northern waterfront. And yet, these Each subarea is further described in Section 19th century industries are also poised to make VII of the report 1 “Traded” or “basic” industry sectors are those with a high concentration of business activity that exports goods and services outside a given area, thus attracting outside spending and fueling economic activity.
EAST BAY FORWARD | INTRODUCTION 14 REPORT CONTENTS The remainder of this report is divided into five sections: I. The Evolving East Bay presents findings that capture the trajectory of the East Bay economy and workforce before the COVID-19 pandemic, and then identifies specific impacts of the pandemic on the East Bay economy. II. Looking Ahead to a Post-Pandemic Future describes the East Bay’s primary competitive assets, industries poised for growth and innovation, and recent venture capital investments to identify critical drivers of the region’s economy as we emerge from the pandemic. III. Fulfilling Our Principles: Priorities for Economic Recovery and Prosperity in the East Bay describes the priority recom- mendations of East Bay Forward, includ- ing summaries of key opportunities and Windmills at the Altamont Pass. Photo by: Dawn Humphrey. challenges identified through this effort that are addressed by each priority. GEOGRAPHIC REFERENCES IV. Appendices. Three of the four appendices at the end of this report describe addi- This report makes frequent references to the tional detailed data analyses that may be following geographies: useful for the technical needs of specific • East Bay or “the region”: Refers to Alam- readers. The fourth appendix provides an eda County and Contra Costa County. overview of the EMSI data source used for • Bay Area: Refers to the seven-county much of this report’s analyses. The ap- Bay Area when used to refer to employ- pendices include: ment analyses, including Alameda, Contra V. Economic Profiles of East Bay Subareas Costa, San Francisco, San Mateo, Marin, describes population, employment San Benito, and Santa Clara Counties. trends, and defining attributes in each of General references to the Bay Area also the seven East Bay subareas. include Sonoma and Napa Counties. • Megaregion: Includes the San Francisco Bay Area, Sacramento, the Northern San Joaquin Valley, and the Monterey Bay Area. • Subareas: Refers to the seven East Bay subareas. See Figure 2.
EAST BAY FORWARD | INTRODUCTION 15 FIGURE 1 East Bay at a Glance Central Eastern Western Northern Central Southern Tri Contra Contra Contra Alameda Alameda Alameda Valley Costa Costa Costa East Bay Population (2019) 442,504 619,541 371,878 393,015 390,924 342,156 264,838 2,824,855 Population Change (2014 - 2019) 2% 2% 4% 8% 2% 8% 2% 6% Population (2021) 447,792 622,246 381,534 395,039 393,228 348,303 271,428 2,859,570 Population Change (2019-2021) 1% 0% 3% 1% 1% 2% 2% 1% Employment (2019) 294,326 240,653 194,569 239,837 210,485 78,350 73,214 1,331,434 Employment Change (2014-2019) 11% 11% 15% 12% 8% 9% 10% 11% Employment (2021) 278,981 230,313 188,907 229,189 201,782 74,739 70,595 1,274,506 Employment Change (2019-2021) -5% -4% -3% -4% -4% -5% -4% -4% Unemployment Rate % (May 2021) 6.0% 6.1% 6.0% 6.1% 6.3% 6.3% 6.3% 6.10% Source: EMSI, 2021; ACS 5-year Estimates, 2010-2014 and 2015-2019; Strategic Economics, 2021. FIGURE 2 The Seven East Bay Subareas 80 Western Contra Costa 4 Antioch Central Contra Costa Northern Alameda Concord Central Alameda Richmond 580 Southern Alameda Tri-Valley Walnut Creek 24 4 Eastern Contra Costa Berkeley Emeryville 80 680 Downtown Oakland 880 580 San Leandro 580 Pleasanton Livermore Hayward 92 Union City 84 N 0 5 10 miles Fremont 84 880
EAST BAY FORWARD | The Evolving East Bay 16 III. THE EVOLVING EAST BAY With over 1.3 million jobs in the region pre-pandemic, the East Bay has a large and robust economy. However, like the rest of the global economy, the East Bay has been significantly disrupted by the COVID-19 pandemic. Ultimately, our region must address both accelerated pre-existing trends and new post-pandemic conditions to be able to realize a better and brighter economic future. Public and private investment must focus on dismantling structural barriers and creating opportunities for long- term and systemic solutions; it is imperative that we do more than promote incremental change. Anti-matter experiment at the Jupiter laser facility. Courtesy of Lawrence Livermore National Laboratory.
EAST BAY FORWARD | The Evolving East Bay 17 This section captures the trajectory the econ- Based on the data analyses and extensive omy was on before the pandemic and then stakeholder input, the information below is identifies the areas in which the pandemic had divided into three topic areas. the greatest impacts. To some extent, these • The first topic characterizes the region’s impacts merely accelerated trends that were pre-pandemic economy, concentrating on already in motion. In other cases, the pan- trends from the five years leading up to demic created changes in the economic cli- the pandemic (2014 to 2019). The analy- mate that must be acknowledged. Ultimately, sis is quantitative and relies on standard the East Bay Forward initiative must address measures to describe the region’s econ- both accelerated pre-existing trends and new omy including total employment growth, post-pandemic conditions. sectoral mix and changes in sectoral This section combines inputs from three key composition, industry specialization, and sources: 1) an extensive review of the many growth rate by industry. background reports regarding the East Bay’s • The second topic is an analysis of the East economy; 2) input from the East Bay Forward Bay’s pre-pandemic workforce. This sec- Strategic Advisory Committee, four focus tion focuses on specific workforce chal- group meetings, and follow-up interviews with lenges that existed prior to the pandemic local topic area experts; and 3) original data in terms of education and skills gaps and analyses undertaken so that the quantita- access to livable jobs. tive data presented in this report specifically reflects the topics, issues, and concerns raised • The third topic then discusses the specific by the Strategic Advisory Committee and other impacts COVID-19 had on the East Bay East Bay stakeholders. economy. FIGURE 3 East Bay Jobs per Square Mile, 2018 Density of All Jobs (jobs per square mile) 80 4 Antioch 20,000 Emeryville 80 Subarea 680 Downtown Oakland 880 580 San Leandro 580 Pleasanton Livermore Hayward 92 Union City 84 N 0 5 10 miles Fremont 84 880
EAST BAY FORWARD | The Evolving East Bay 18 • The final section ends with findings on eas have the lowest number of jobs in the East the ways in which the pandemic has both Bay. Richmond (Western Contra Costa) as well accelerated trends already underway, as Antioch and Pittsburg (in Eastern Contra as well as the transformational changes Costa) have the strongest job concentrations brought up by the pandemic. in these subareas, though they are not par- ticularly large compared to concentrations in The East Bay is more than just an economy. the other subareas. It is also place composed of many communi- ties. Figure 3 provides a spatial backdrop for The spatial employment pattern is critical for understanding how jobs are distributed across understanding the East Bay region for two rea- the region. Jobs are not distributed equally sons: 1) It shows that the East Bay is also part of across the two East Bay counties. Northern the larger Bay Area. Communities that are closer Alameda has the strongest concentration of to and better connected with the rest of the Bay jobs, as Downtown Oakland, Berkeley, and Area have historically represented the greatest Emeryville constitute a large share of re- economic opportunity. 2) It sets the stage for gional employment. The Interstate 880 cor- understanding how each subarea within the East ridor, which connects Downtown Oakland Bay has been impacted by the pandemic, and to San Jose through Alameda County, also what opportunities exist to strengthen each sub- has sizeable job concentrations throughout. area’s employment base in the future. Profiles Communities with strong job concentrations of the region’s seven subareas can be found in along this corridor include Fremont, Union Section VII. City, Hayward, and San Leandro. Within the Tri-Valley, most jobs are concentrated either PRE-PANDEMIC ECONOMIC at the intersection of Interstates 580 and 680 TRENDS in Dublin and Pleasanton (both of which are in The following data captures the key ele- Alameda County). There are also job concen- ments of the East Bay economy as defined by trations along Interstate 580 in Livermore jobs, sectoral mix, industry growth rates and (Alameda County) and along Interstate 680 in economic specialization. In this analysis, the San Ramon (Contra Costa County), which is spatial differences within the East Bay were where Bishop Ranch is located. Walnut Creek captured by comparing the two counties to and Concord, which are in Central Contra each other. Specific implications for individual Costa, also have strong job concentrations. subareas can be further inferred based on the The Western and Eastern Contra Costa subar- subarea profiles. FIGURE 4 The East Bay economy grew at a rate that was East Bay Jobs by County, 2014 and 2019 nearly on par with the Bay Area, although 1,400,000 Contra Costa the growth was disproportionate by county. 32.6% Alameda 1,200,000 Total jobs in the East Bay grew (1.3 million) 11 33.5% percent from 2014 to 2019. However, Alam- 1,000,000 eda County grew by 12 percent, which is on Number of Jobs 67.4% par with the Bay Area’s growth over this same 800,000 66.5% period, while Contra Costa County only grew 600,000 by eight percent. This illustrates an increasing divergence in economic activity across the two 400,000 counties (See Figure 4). 200,000 Overall, the East Bay economy is diverse. Fig- 0 ure 5 shows the East Bay’s 2019 employment 2014 2019 by industry using 2-digit NAICS codes. Four of Source: EMSI, 2021; Strategic Economics, 2021.
EAST BAY FORWARD | The Evolving East Bay 19 the largest individual sectors all fall into the including Information (2 percent), account for a household-serving industry group (“Health relatively small share of total employment, but Care and Social Assistance,” 14 percent; Public have been growing and/or represent a strong Administration, 13 percent; Retail Trade, 9 East Bay concentration. Other sectors, such as percent; “Accommodation and Food Service,” those typically associated with the life sciences 8 percent). These four sectors accounted for and biotech industries, are distributed across 44 percent of total East Bay employment. multiple NAICS classifications, and will there- The largest basic or “traded” sectors include fore not stand out in a high-level sectoral analy- Professional and Technical Services (9 percent) sis such as this. Other analytical methods have and Manufacturing (8 percent). In total, the been used to highlight these East Bay economic region’s traded sectors comprised about 30 strengths and will be discussed below. percent of total jobs in 2019. The proportional The East Bay’s recent employment growth share between household serving and traded varied considerably by industry sector. industries is about on par with the way most Figure 6 shows percent changes in employ- diversified economies are structured. However, ment growth over the 2014-2019 period by these numbers are not necessarily the best industry for the East Bay and for the Bay Area. description of the East Bay’s overall economic The Manufacturing industry had the greatest strengths partly because some industries, employment growth relative to the Bay Area, FIGURE 5 growing by 20 percent in five years compared East Bay Jobs by Industry Sector, 2019 to 13 percent in the region. Although the Tesla Number Share of plant in Fremont accounted for a significant Industry of Jobs Jobs share of the East Bay’s overall increase, other Health Care and Social Assistance 185,148 14% industry sub-sectors including food process- Public Administration 170,825 13% ing and biomedical devices also grew quickly. Professional and Technical Services 121,258 9% This overall trend suggests that the East Bay’s Retail Trade 118,780 9% legacy as a manufacturing hub for the Bay Accommodation and Food Services 105,011 8% Area persists, while many of the processes Manufacturing 102,590 8% and products involved represent the latest in Construction 91,502 7% advanced manufacturing techniques. Other Services 78,123 6% Alameda and Contra Costa counties are distinct Administrative and Waste Services 76,604 6% from each other based on both their industry Wholesale Trade 46,400 3% mix in 2019 and their five-year employment Transportation and Warehousing 45,591 3% growth by industry. Figure 6 shows industry Finance and Insurance 42,896 3% employment as a share of total employment in Educational Services 33,397 3% each county. Alameda County has a higher share Information 29,950 2% of jobs in traded sectors, with concentrations of Arts, Entertainment, and Recreation 26,702 2% jobs in Manufacturing and Logistics (which in- Management of Companies and cludes many subsectors in Wholesale Trade and 25,596 2% Enterprises “Transportation and Warehousing”). Alameda Real Estate and Rental and Leasing 24,092 2% County has a higher share of jobs in Professional Utilities 5,635 0.4% Services and Information, both of which include Agriculture, Forestry, Fishing & many subsectors that fall in the “Creative Tech- 1,750 0.1% Hunting (a) nology and Design” category. Alameda County Mining (a) 221 0.02% also has a higher share of jobs in the Biomedical TOTAL 1,332,072 100% cluster, which is difficult to track with NAICS Notes: (a) These two sectors account for a very small share of employment codes but tends to fall into Manufacturing and in the East Bay, and are not analyzed further in this report. Source: EMSI, 2021; Strategic Economics, 2021. Professional Services.
EAST BAY FORWARD | The Evolving East Bay 20 In contrast, household-serving sectors Figure 7 shows the employment growth by such as “Accommodation and Food Services,” industry sector in each county from 2014 to Health Care, “Other Services,” and Retail 2019. In Alameda County, most of the sectors Trade, account for a greater share of jobs that are driving economic growth also expand- in Contra Costa County. These sectors tend ed their workforce from 2014 to 2019. Profes- to constitute larger shares of employment sional Services, Manufacturing, and Informa- in places that are predominantly residen- tion all grew by at least 10 percent in terms of tial. Contra Costa County also has a higher employees over the period. share of jobs in office-based sectors that are The “Transportation and Warehousing” household-serving in the East Bay context. sector also had strong employment growth in The Central Contra Costa subarea has a large both counties, as the rise in Ecommerce has proportion of the East Bay’s “Finance and driven employment demand in distribution Insurance” jobs, while the county generally centers and other logistics facilities. has a higher share of jobs in the real estate Household-serving sectors, including sector. Additionally, a large number of the Healthcare, “Accommodation and Food region’s Utilities jobs are attributed to the Services,” and Construction also had strong Eastern Contra Costa subarea because of the employment growth in both counties. Growth presence of Pacific Gas & Electric. in these sectors is closely intertwined with household growth. FIGURE 6 Rate of Job Growth by Industry Sector in the East Bay and Bay Area, 2014 to 2019 Health Care and Social Assistance East Bay Bay Area Public Administration Professional, Scientific, and Technical Services Retail Trade Accommodation and Food Services Manufacturing 185% Construction Other Services Administrative and Waste Services Wholesale Trade Transportation and Warehousing Finance and Insurance Educational Services Information Arts, Entertainment, and Recreation Management of Companies and Enterprises Real Estate and Rental and Leasing Utilities -20% -10% 0 10% 20% 30% 40% 50% 60% Source: EMSI, 2021; Strategic Economics, 2021.
EAST BAY FORWARD | The Evolving East Bay 21 The East Bay economy has many unique sistance,” Public Administration, Retail Trade, industry specializations when compared to and “Arts, Entertainment, and Recreation.” the Bay Area economy. “Economic specializa- Household-serving industries are typically tied tion” is another way to evaluate the East Bay’s to population growth and have a low “multiplier economic strengths. The “location quotient” effect” in terms of driving additional spend- measure is a ratio used to indicate when an ing and generating increases in overall income industry in the East Bay has a higher share of within the region. However, because household- jobs than would be expected when compared serving industries are more concentrated in the against the Bay Area as a whole.2 As shown in East Bay than in the Bay Area, this indicates Figure 9, East Bay industries with a location that these industries are likely not just serving quotient greater than “one” represent greater the East Bay’s resident population but are also economic specialization in the East Bay than in drawing activity from a larger area beyond the the Bay Area overall. two-county region. This likely reflects how well The East Bay has multiple sectors with a the East Bay is physically connected both to location quotient of greater than “one.” Many of other Bay Area counties and to the 21-county these sectors are in household-serving indus- megaregion that extends both east and north tries, including “Health Care and Social As- via Interstate 880, BART, and the four bridges 2 The location quotient is calculated by dividing the share of an industry’s employment in the East Bay by the share of that industry’s employment in the Bay Area. FIGURE 7 Industry Employment as Share of Total Employment in Alameda and Contra Costa counties, 2019 Health Care and Social Assistance Alameda Contra Costa Public Administration Professional, Scientific, and Technical Services Retail Trade Accommodation and Food Services Manufacturing 185% Construction Other Services Administrative and Waste Services Wholesale Trade Transportation and Warehousing Finance and Insurance Educational Services Information Arts, Entertainment, and Recreation Management of Companies and Enterprises Real Estate and Rental and Leasing Utilities 0 2% 4% 6% 8% 10% 12% 14% 16% 18% Source: EMSI, 2021; Strategic Economics, 2021.
EAST BAY FORWARD | The Evolving East Bay 22 connecting the East Bay to the West, North, Gross Regional Product (GRP) is another and South Bay households and workforce. measure of which industries are contributing The East Bay also has specializations in to the East Bay Economy. The East Bay’s total certain traded sectors that differentiate the GRP amounts to $209.3 billion, with Alameda East Bay’s strengths from those of the Bay County accounting for 64% of this activity and Area’s overall economy. Such sectors include Contra Costa County making up 36% of this Wholesale Trade and “Transportation and total. Certain traded sectors play an outsized Warehousing,” which are both tied to the Port role in generating economic growth (i.e., dollars of Oakland (including the major container ter- moving through the economy, as compared to minals in Oakland, and Oakland International their share of employment). This comparison Airport), as well as the Port of Richmond, a between GRP and employment by industry bulk cargo port. Other sectors concentrated is especially illuminating for industries like in the East Bay are Construction, “Administra- Manufacturing, where automation and other tive and Waste Services,” and Utilities; these industry changes generate faster growth in eco- sectors represent a combination of traded and nomic output relative to jobs. As Figures 10 and non-traded activities. However, small emerg- 11 show, Manufacturing plays an important role ing industries that are becoming increasingly as an economic driver for the East Bay. Addi- important in the East Bay are likely to have tionally, Professional Services, Information, and relatively low location quotients, illustrating “Finance and Insurance” sectors are contribut- the importance of using multiple measures to ing substantial economic output, particularly in understand the East Bay’s economic strengths. Alameda County. FIGURE 8 Employment Growth by County and Industry Sector, 2014 to 2019 Health Care and Social Assistance Share of Jobs Public Administration Share of GRP Professional, Scientific, and Technical Services Retail Trade Accommodation and Food Services Manufacturing Construction Other Services 185% Administrative and Waste Services Wholesale Trade Transportation and Warehousing Finance and Insurance Educational Services Information Arts, Entertainment, and Recreation Management of Companies and Enterprises Real Estate and Rental and Leasing Utilities 0% 5% 10% 15% 20% 25% Source: EMSI, 2021; Strategic Economics, 2021. See Appendix for full GRP detail.
EAST BAY FORWARD | The Evolving East Bay 23 FIGURE 9 Concentration of East Bay Industry Sector Employment in East Bay, Compared to Bay Area, 2019 (Displayed as Location Quotients) Industry Number of Jobs Location Quotient Health Care and Social Assistance 185,148 1.23 Public Administration 170,825 1.19 Professional and Technical Services 121,258 0.70 Retail Trade 118,780 1.19 Accommodation and Food Services 105,011 0.94 Manufacturing 102,590 0.97 Construction 91,502 1.28 Other Services 78,123 0.93 Administrative and Waste Services 76,604 1.07 Wholesale Trade 46,400 1.32 Transportation and Warehousing 45,591 1.20 Finance and Insurance 42,896 0.94 Educational Services 33,397 0.77 Information 29,950 0.39 Arts, Entertainment, and Recreation 26,702 1.08 Management of Companies and Enterprises 25,596 1.10 Real Estate and Rental and Leasing 24,092 0.96 Utilities 5,635 1.37 Total 1,332,072 Source: EMSI, 2021; Strategic Economics, 2021. FIGURE 10 Alameda County: Share of Jobs and Gross Regional Product by Sector, 2019 Health Care and Social Assistance Share of Jobs Public Administration Share of GRP Professional, Scientific, and Technical Services Retail Trade Accommodation and Food Services Manufacturing Construction Other Services Administrative and Waste Services Wholesale Trade Transportation and Warehousing Finance and Insurance Educational Services Information Arts, Entertainment, and Recreation Management of Companies and Enterprises Real Estate and Rental and Leasing Utilities 0 5% 10% 15% 20% 25% Source: EMSI, 2021; Strategic Economics, 2021. See Appendix for full GRP detail.
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