What is the Jobs Crisis?
At no other time in history has economic and industrial change occurred at such an accelerated pace. This is true at the global level, and it is certainly true for the Los Angeles region. The technology revolution of recent decades caused a transition from low-tech, routine production to an information-age economy, where even manufacturing is much less labor-intensive and more technology-driven, and economic rewards are earned by the highly skilled and well educated.Read more...
These economic transitions and the speed at which they are moving require us to answer the following trillion-dollar questions: “how will our region quickly adapt to take advantage of these changes and foster sustained regional economic prosperity?” and “how do we ensure that this prosperity is distributed equitably, so the economically distressed will also experience higher standards of living and participate in the ‘American Dream’?”
In the past, a high school graduate had a lot of opportunity to take an entry level job, such as in manufacturing, and work his way up into a middle income career to support a family. Now, those same manufacturers are looking for advanced skills.
The information age presents L.A.’s residents with both the promise of economic success and the peril of being left behind.
Skills requirements changing
Unlike the move from an agricultural economy to a manufacturing-based one 150 years ago, when a worker needed little training to move seamlessly from the field to a factory floor, moving from a production-based economy to an information age one today requires much higher levels of skills, technology experience and education.
In other words, advanced education is becoming critical for well-paying jobs, and residents in L.A.’s workforce need resources to upskill, leading to more access to good job opportunities.
But, it’s not just an education and workforce training challenge—there are many considerations that will affect how competitive the Los Angeles region remains in the face of these increasingly complex changes, from different and more flexible physical spaces, urban designs and infrastructure to more focused and tailored public policies and trade programs.
Where will jobs be created?
For answers to these questions, L.A. County’s public, private, education and philanthropy leaders have begun to look at implementing industry cluster development strategies, such as in Los Angeles County’s Strategic Plan for Economic Development and Los Angeles County’s recent recommendation to develop a Countywide Industry Sector Development Strategy, as a way to build further capacity and advance high growth potential economic drivers – and thus spur more and higher-paying jobs – in the county’s regionally concentrated export-oriented industries. When these industries grow, there are positive multiplier effects that spillover onto the entire economy, including increasing average wages and job counts in our region’s population-serving industries, such as construction, hospitality and retail.
What are Industry Clusters?
They are geographic concentrations of related firms, organizations and institutions that are present in a particular region. For example, think aerospace in SoCal, and its ecosystem of R&D, educational institutions, designers, service providers, major businesses and small suppliers, trade associations, aerospace finance, exporters…and all that makes the industry thrive in the region.
Evidence suggests that focused development of industry clusters improves performance of regional economies – and can unleash incredible growth potential when used as an approach that cuts across the traditional fields and tools of economic, community and workforce development, helping to enhance their effectiveness.
Traded or export-oriented industries sell goods and services beyond the region in which they are located. They produce a reinforcing cycle of job creation, real wage growth, investment and economic prosperity, while also driving the local service economy, triggering ripple effects that are felt across our local businesses (in terms of jobs, wages and tax revenues), and offering the best chance for bringing greater prosperity to more residents and raising standards of living across more of L.A. County’s communities.