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Digest of Jobs in L.A.’s Green Technology Sector - 2006

Los Angeles has been a leader in setting increasingly ambitious environmental goals and introducing innovative technologies to achieve those goals. This report identifies the green industries, occupations and sectors that are growing greener jobs.

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The City of Los Angeles investigated job opportunities that could result from becoming a center of “green” goods and services that provide renewable or less-polluting sources of energy, and help reduce pollutants from our existing economic base, transportation infrastructure, and residential communities.

Promoting the "greening" of Los Angeles includes energy and resource conservation, sustainable transportation, green architecture, recycling, waste reduction, and pollution prevention.

City of Los Angeles Green Market Development

Some effort has been made to connect Los Angeles’ green technology industries and markets for their goods and services:

  • City leaders have met with green technology business leaders to learn about their plans, needs, priorities, and suggestions for public assistance.
  • The City promotes opportunities for local businesses in green technology industries to learn about public sector needs for green products and services.
  • Where possible, city purchasing departments give local preference or require local content for public purchases of green products 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 County

The 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.)

40% of the county’s green technology establishments were located in the City of Los Angeles.

Number and Grouping of Green Technology Businesses in Los Angeles

Type of
Green Business
City of
Los Angeles
Balance of
Los Angeles County
Los Angeles County
Total
1. Alternative Fuel Vehicles 5 16 21
2. Biomass / Waste-to-Energy Power 7 9 16
3. Construction 5 8 13
4. Environmental Components Manufacturer 7 11 18
5. Environmental Components Distributor 1 1 2
6. Environmental Consulting 31 44 75
7. Fuel Cell Manufacturer 0 3 3
8. Solar Power 43 49 92
9. Waste Disposal 13 24 37
10. Water Purification 2 7 9
11. Wind Power 1 3 4
(Unclassified) 3 3 6
Grand Total 118
(40%)
178
(60%)
296
(100%)

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.

  • Waste disposal / remediation firms are concentrated in the cities of Los Angeles, Vernon, Huntington Park, Torrance and Irwindale.

  • Environmental consulting is concentrated in downtown Los Angeles, West Los Angeles, Santa Monica, Western San Fernando Valley, Pasadena, and Torrance.

  • Alternative fuel vehicle businesses are concentrated in Carson, Gardena and Torrance.

    Diversity of Los Angeles' Green Technology Sectors

    Viewed 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.

    Los Angeles’ experience with providing rebates for residents and businesses to install solar panel power systems and connect them to the DWP grid. This incentive program is partly responsible for the rapid growth of solar panel installation establishments in Los Angeles, where public subsidies help offset the cost of rooftop systems.

    In September 2000 the City of Los Angeles' Department of Water and Power began a solar buy-down program to increase the installation of Solar Photovoltaic (PV) rooftop systems among residential and commercial customers. This one-time Incentive payment dramatically reduced the cost of Solar Photovoltaic (PV) rooftop systems. The incentive ranges from $3.25 to $4.50 for each system watt, with a maximum allowable of $45,000 for residential and $1 Million for commercial customers. This LADWP Solar Program subsidy fund (which was exhausted in early 2005) could be combined with a 7.5% State of California solar income tax credit, calculated against the cost of installed, grid-connected solar electric systems. Source: LADWP website http://www.ladwp.com/ladwp/cms/ladwp000787.jsp

    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:

    • Scientific, technical and consulting
    • Computer systems design
    • Scientific R&D services
    • Architectural and engineering services
    Also high in the average monthly wage in 2002 were Power train equipment manufacturing; Water, sewage systems; Instrument manufacturing; Motor vehicle wholesaling and Instruments manufacturing. Waste treatment and disposal lost job quantity, but provides high income potential.

    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 industries

    LA 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:

    • Building Equip Contractors 11,217 jobs
    • Scientific, Tech Consulting 10,419 jobs
    • Architectural, Engineering Services 9,565 jobs
    • Computer Systems Design 8,452 jobs
    • Scientific Research and Development Services 3,775 jobs
    • Electrical Component Manufacturing 1,162 jobs
    • Waste Remediation and Management 928 jobs
    • HVAC Equipment Manufacturing 608 jobs
    • Power Train Equipment Manufacturing 431 jobs
    City employment in a cluster of 6 green technology industries that pay high wages but are experiencing job losses is as follows:

    • Instruments Manufacturing 7,432 jobs
    • Electronic Component Manufacturing 4,417 jobs
    • Water, Sewage Systems 2,803 jobs
    • Waste Treatment, Disposal 976 jobs
    • Electronic Equipment Repair 740 jobs
    • Electrical Equipment Manufacturing 622 jobs
    When compared to the U.S. economy, Los Angeles is under-represented in every major industry with green technology components.

    Existing Green Businesses and Entrepreneurs Need...

    There appears to be potential for growth in Los Angeles’ green technology industries if existing businesses and entrepreneurs:

    • Are able to learn about new markets for their environmental products and services. The City of Los Angeles can assist this process by educating local firms in green industries about of the public sector market for green products and services. These events could expand to include private-sector buyers of green technology products and services.

    • Are effective in competing for a share of those markets. Many of the green technologies are developed and sold through markets that are national or even international in scale. Thus, when a local municipality wants equipment installed they tend to request bids from companies from across the U.S. and sometimes abroad compete for these orders.

    • Strengthen capabilities for drawing on the intellectual assets of local universities and research institutions to develop cutting-edge products and services.
    Successful economic development policies for the green technology sector are less about focusing on a handful of specialized industries and more about connecting existing industries with green markets.

    Filtering criteria to identify target industries

    The 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:

    • Single-Family Housing Construction $7.6 Billion
    • Measuring and Control Device Manufacturing $7.3 Billion
    • Engineering Services and Testing Labs $5.4 Billion
    • Environmental Consulting Services $3.7 Billion
    • Trans and Power Train Parts Manufacturing $2.9 Billion

    The five industries that add the greatest value within the City of Los Angeles are:

    • Engineering Services and Testing Labs $4.0 Billion
    • Measuring and Control Device Manufacturing $3.4 Billion
    • Single-Family Housing Construction $3.3 Billion
    • Environmental Consulting Services $2.8 Billion
    • Research and Development in the Physical, Engineering and Biological Sciences $1.5 Billion

    High Regional Los Angeles Value by Industry Sector

    Industries 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:

    • Water, Sewage and Other System: 100%
    • New Residential Construction: 100%
    • Wholesale Trade: 100%
    • Residential Additions Construction: 100%
    • Miscellaneous Store Retailers: 95%
    • Arch. and Engineering Services: 90%
    • Maintenance and Repair Construction, Residential: 88%
    • Management Consulting Services: 80%
    • Environmental Consulting Services: 80%
    • Waste Management and Remediation Services: 80%

    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 Economies

    Industry 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 Jobs

    Many 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.

    Six of the city’s top 20 green technology occupations are in construction, accounting for 25 percent of jobs.

    Professional occupations provide a significant share of jobs:

    • Civil Engineers (2 percent),
    • Architects and Drafters (2 percent), and
    • Building Architects (2 percent).

      Other large occupations are office-based jobs:

    • General and Operations Managers: 3%
    • Office Clerks 2%
    • Executive Secretaries 2%

    Top Green Technology Occupations in Los Angeles, 2002

    Los Angeles' most numerous green technology occupations in 2002 included:
    • Electricians 1,380
    • Carpenters 1,304
    • Plumbers and pipefitters 1,192
    • Construction laborers 791
    • General and operations managers 724
    • First line Supervisors of construction 605
    • Office clerks 542
    • Executive secretaries 527
    • Civil engineers 504
    • Bookkeepers and auditors 443
    • Sheet metal workers 410
    • Architectural drafters 405
    • Refuse & recycling collectors 404
    • Building architects 375
    • Secretaries 356
    • Engineering managers 295
    • Helpers - electricians 272
    • Construction managers 262
    • Maintenance and repair workers 254
    • Electronics engineers 246

    Top wages (hourly averages) are almost an inverse of that list:

    • Engineering managers $55
    • General and Operations managers $52
    • Construction managers $48
    • Electronics Engineers $38
    • ....
    • Executive secretaries $20
    • Refuse & recyclable collectors $19
    • Helpers - electricians $15
    • Construction laborer $15
    • Office clerks, $12
    These wage levels are similar to the City’s entry-level and average wages for all occupations, which were $15.32 and $23.28 respectively, in 2005.

    Years of Training required for these jobs

    • Managers, Engineers require 5 years
    • Construction manageres, civil engineers, and executive secretaries require 3 years
    • Electricians, drafters, plumbers, etc. require 1.5 years
    • Bookkeepers and auditors, secretaries, and laborers require 6 months
    • Refuse and Recyclable collectors require 1 month.

    17 Most Promising Industries with GREEN Activity

    The industry niches in the top quartile in terms of wages include:
    • Water & Sewage Systems
    • Building Equipment Contractors
    • Building Finishing Contractors
    • Computer Systems Design
    • Scientific R&D

    Jobs that require the least training include:

    • Cleaning Compound manufacturing
    • HVAC equipment manufacturing
    • Durable goods wholesaling
    • Wholesale electronics
    • Waste collection
    • Remediation and waste management

    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 Recommendations

    To 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.



    Edited by Carolyn Allen, owner/editor of California Green Solutions
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