Digest of Jobs in L.A.’s Green Technology Sector - 2006
City of Los Angeles Green Market DevelopmentSome effort has been made to connect Los Angeles’ green technology industries and markets for their goods and services:
The City of Los Angeles continues to investigate opportunities for economic growth in industries that provide important green technology inputs but are under-represented in the local economy. This includes "upstream" suppliers of green technology industries identified in this report as well as suppliers identified through further research and implementation activities.
The City continues to strengthen links between Los Angeles’s research universities and green technology industries to increase technology transfer, consulting assistance, and business start-ups.
Analysts monitor the "ripple-effects" that green technology industries have on other industries in L.A.’s economy.
The California Employment Development Department reported that there were 373,898 establishments in Los Angeles County during the 1st Quarter of 2005, and they have surveyed several sources to see how many of these businesses are considered part of the "green technology" sector.
300 Green Companies Operating in Los Angeles CountyThe search carried out in September 2005 yielded a list of almost 300 of these establishments operating locally, or 0.08 percent of the all wage and salary establishments in the county’s economy. (The list of green technology establishments was compiled from business directories, Internet searches, newspaper articles, and existing lists from L.A.’s Department of Water and Power and the California Energy Commission.)
Number and Grouping of Green Technology Businesses in Los Angeles
While construction and solar power establishments, for example, are scattered throughout the county, there are some discernable geographic concentrations of other green technology vendor categories.
Diversity of Los Angeles' Green Technology SectorsViewed altogether, L.A.’s green technology sector is highly diversified, with a broad range of production activities (research and development, manufacturing, sales and distribution) and services(remediation, engineering, legal, research and development,and testing laboratories) located here.
L.A.’s residual technological strengths related to green technology and the large local demand for green products and services suggest that:
1) There is significant potential for expanding the green technology sector of the economy, both by helping new businesses start-up and by “greening” existing businesses and industries.
2) Planning and incentives by local government can help spur economic growth in “green” directions.
Occupations in green technology industries and job opportunities for LA residents.The most desirable occupations identified by the report for targeted job creation strategies include:
High growth occupations on the lower end of the desirable wage scales include: Waste remediation and management; Electrical component manufacturing; Building equipment contractors, HVAC equipment manufacturing, HAC hardware wholesalers; Machinery wholesaling, and Building exterior contractors. The fastest growing group is small but has a 60% growth rate: Waste Remediation and Management.
Major green technology industriesLA City employment in nine major green technology industries that have stable or growing job levels and pay average wages of at least $2,500 a month is as follows:
Existing Green Businesses and Entrepreneurs Need...There appears to be potential for growth in Los Angeles’ green technology industries if existing businesses and entrepreneurs:
Filtering criteria to identify target industriesThe amount of total sales and local value added by the largest industries in L.A.'s green technology sector include: Industries in L.A. City's green technology sector with the highest output are:
The five industries that add the greatest value within the City of Los Angeles are:
High Regional Los Angeles Value by Industry SectorIndustries that pass a high percentage of their value added along to employees as compensation, such as Semiconductor Device Manufacturing and Measuring and Control Device Manufacturing tend to be capital-intensive durable goods manufacturers, deriving most of their value added from worker fabrication and assembly activities.
These industries pass on a much greater share of the value they add to employees than is typical in Los Angeles County. The Environmental Consulting, Waste Treatment and Remediation and Irrigation Systems industries resemble the county average much more closely.
How much revenue is required to create one job in each green industry?This variation is largely explained by whether industries are labor- or capital-intensive, since those with higher total output per worker (such as Motor Vehicle Parts Manufacturing and Semiconductor Device Manufacturing) generally require greater investments in physical plant and capital.
Local Economic Impact by Industry Segment
The Regional Purchase Coefficient identifies the degree to which increased sales will have local impacts. Ten of the largest industry segments in the green niche obtain 80% or more of their supply inputs from within Los Angeles County. Industries with the highest Regional Purchase Coefficients include:
At the other end of the scale, the Air Purification Manufacturers industry was found to have no local suppliers, and thus would have limited impact upon the Los Angeles County beyond paying out compensation to its own employees, land rent, and local taxes.
Several of Los Angeles’ green technology industries purchase 80 percent or more of their supply inputs from within the county. These industries produce the largest local economic and job multipliers. The share of added value that goes to employees in different green technology industries ranges from 44% to 93%. Manufacturing industries pass on a large share of locally added value to workers.
Participating in National and Global EconomiesIndustry inputs that come largely from outside Los Angeles represent potential opportunities for import substitution through local economic development initiatives targeted on those industries.
Occupations In Green Technology Industries and JobsMany occupations, such as electricians and carpenters, secretaries and clerks, engineers and architects, are found in many different green industries and add up to a significant regional job pool.
Professional occupations provide a significant share of jobs:
Top Green Technology Occupations in Los Angeles, 2002Los Angeles' most numerous green technology occupations in 2002 included:
Top wages (hourly averages) are almost an inverse of that list:
Years of Training required for these jobs
17 Most Promising Industries with GREEN ActivityThe industry niches in the top quartile in terms of wages include:
Jobs that require the least training include:
Promising Industries with Green Technology Activity
Professional Services STRENGTHS: Large, Growing, High Wages, Low Cost to Create Jobs LIMITATION: Extensive Training Needed
Construction STRENGTHS: Large, Growing, Low Cost to Create Jobs LIMITATIONS: Volatile Employment, Some Training Needed
Wholesale STRENGTHS: Large Industries, Many Entry-level Jobs LIMITATIONS: Significant Cost to Create Jobs
Manufacturing STRENGTHS: Many Entry-level Jobs LIMITATIONS: Small Industries, High Cost to Create Jobs
Utilities & Waste Mgmnt. STRENGTHS: Entry-level Jobs LIMITATIONS: Small Industries, High Cost to Create Jobs
Two of the five clusters, Professional Services and Manufacturing, are highly knowledge-dependent. Improved linkages with Los Angeles’ research universities can be a key asset for these industries.
Policy RecommendationsTo build the right environment for green jobs and industries to thrive, there are a number of general conditions that need to grow and thrive ... and lead the way for additional job creation.
Adopt goals for green technology in L.A that include career paths out of consumer services sector with equitable access to opportunities
Build connections between LA's green tech industries and markets for their goods and services.
Promote the “greening” of Los Angeles, including energy and resource conservation, sustainable transportation, green architecture, recycling, waste reduction, and pollution prevention.
Identify how Los Angeles’ job training, economic development and business assistance programs can be used to support the growth of green technology businesses. This includes training programs that give residents a foothold on green technology career ladders and economic development strategies that are both community- and industry-specific for supporting the growth of green industries.
Ensure that workers have fair opportunities to compete for green technology occupations that require specialized skills. Tools for achieving this outcome include outreach through community colleges, WorkSource centers, and community based organizations.
Investigate opportunities for economic growth in industries that provide important green technology inputs but are under-represented in the local economy. This includes “upstream” suppliers of green technology industries identified in this report as well as suppliers identified through further research and implementation activities.
Strengthen links between L.A.’s research universities and green technology industries to increase technology transfer, consulting assistance, and business start-ups.
Los Angeles is challenged to build local institutions capable of implementing strategy-driven, targeted economic development initiatives. Building these institutions requires an information-rich environment that supports strategy refinement, timely course correction, and insights for adapting to a rapidly changing economy.
SOURCE: Jobs in L.A.’s Green Technology Sector 2006, Prepared for the Department of Water and Power and the Workforce Investment Board of the City of Los Angeles through a contract with the Milken Institute. Report by Patrick Burns and Daniel Flaming, Economic Roundtable, www.economicrt.org.
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