By Robin Reimold, President and CEO, TeamCalifornia
California Dreamin’ is more than a ‘60s hit. The phrase embodies the aspirational lifestyle many throughout the world would love to achieve. Whether it’s in the deserts, mountains, beaches or valleys, the essence of that dream can be felt throughout the Golden State.
It’s part of what’s made California the fifth largest economy in the world. The state doesn’t simply rely on where it’s been, however. California, its various economic development agencies and non-profit organizations like TeamCalifornia continue to foster innovation and support emerging industries.
An Industrious State
Part of what makes California unique is its diversity. The state is home to an amazing array of people, cultures, industries, skills, companies, religions and ideologies. This “melting pot” has always been a proud, integral part of California’s identity, but it played an even bigger role during COVID.
Suddenly, the state’s biotech, life sciences and healthcare clusters, including numerous submarkets in San Francisco and San Diego, were center spotlight on the world stage. The pandemic also increased demand in the pharmaceutical, computer and electronics, aerospace, high tech, and food and beverage industries.
Being the manufacturing powerhouse that it is, California and its companies were ready to go to work when this demand materialized and it was sink-or-swim time. One of the largest trends to emerge post-COVID is our reliance on ecommerce. Though this trend was taking off before the pandemic, restrictions and health and safety concerns significantly accelerated the need for ecommerce and omnichannel solutions.
A Mobile State
California’s sophisticated transportation infrastructure, including airports, roadways, railways and major shipping hubs, were ready to roll when that demand came barreling down the track. Amenities like Southern California Logistics Airport in Victorville – also home to Fortune 500 companies like Boeing, Keurig Dr. Pepper, M&M/Mars and Newell Rubbermaid, among others – put California-based logistics players a step ahead. That’s because they saved substantial time and money as they were able to service more than 40 million customers without leaving the state.
In contrast, businesses located in the central part of the U.S. generally paid higher logistics and transportation costs to service the same volume. Speaking of volume, this increase in consumer spending has sent the state’s logistics industry through the roof.
Here’s where supporting emerging industries comes in handy. While logistics and manufacturing are certainly no strangers to California, the state and its supporters are ensuring the infrastructure and resources are there as ecommerce continues to grow.
Gov. Newsom’s California Blueprint contains a record $2.3 billion investment in California’s ports. This includes $1.2 billion for port-related infrastructure projects that bolster goods movement capacity, along with funding for zero-emission port equipment, drayage trucks and more.
The Governor issued an executive order in October that will help alleviate congestion at California ports and facilitate infrastructure projects that will ease supply chain congestion. This includes $5 billion from the California State Transportation Agency and the U.S. Department of Transportation. The executive order will also secure more storage sites for shipping containers, allow trucks to carry increased loads and double the DMV’s capacity to carry out commercial driving tests.
That’s right. While other states and industries grapple with labor shortages, many of California’s booming industries are hiring left and right.
A Labor of Love
Inc. 5000 notes California was home to 682 of the 5,000 fastest-growing private companies in America in 2021. This is more than any other state, far surpassing larger states like Texas (428) and Florida (369). California-based employers also nabbed five of the top 10 spots for fastest-growing companies.
The No. 1 spot went to Human Bees, a Rancho Cordova-based staffing solutions agency for light industrial, manufacturing, production and tech users. With a client list that includes FedEx, Foster Farms and Tesla, it’s clear companies are hiring – and Californians want to work. With a two-year revenue growth of more than 22,000 percent, Human Bees serves as an example of what success can look like when robust companies are paired with eager, skilled workers.
To ensure diversity and access to talent, California offers dynamic public college and university systems, as well as nationally-ranked private universities. Yes, the state isn’t done topping lists yet. California recently filled eight of the top 20 spots on Forbes’ “America’s Top Colleges” list. Colleges and universities at every level train workers for jobs that are in demand now, and in the future. Currently, the most popular enrollment for degrees in high-demand careers include construction, logistics, engineering, manufacturing and professional/management/technology.
A skilled labor force benefits employers and the state, regional and local economies, of course, but it does much more than that. By supporting educational and career endeavors, California is ensuring that millions of its residents are able to enjoy all the state has to offer. Job security and strong salaries mean more opportunities for employees to create their own “California Dream,” whatever that dream entails.
For some, that dream includes starting their own business. Entire submarkets – think Silicon Valley and Los Angeles’ Silicon Beach – have evolved thanks to this entrepreneurial spirit. That innovation is and continues to be fostered by funding, including venture capital.
In 2021 alone, Southern California-based ventures raised nearly $14 billion in venture capital funding for 831 deals, according to Pitchbook. This was a 39 percent increase over the previous year. The state easily took home the most funding, which is no surprise given the success of many California start-ups. Last year, 133 Bay Area start-ups reached “unicorn” status, having achieved a valuation above $1 billion.
Whether a new venture is hoping to become a mythical creature or simply wants to solve a problem, the state and its resources are here to help. The California Competes Tax Credit offers $140 million in tax credits and $120 million in grants for businesses that are expanding and adding quality, full-time jobs in the state. The Employment Training Panel (ETP) provides funding to employers that can upgrade workers’ skills, allowing them to move into good-paying, long-term jobs via training programs.
Companies that bring new jobs and loads of at least 200kW annually can receive discounted electric and utility rates, with savings typically totaling 12 percent to 30 percent over a five-year period. Of course, cities offer their own incentive programs as well. Glendale, for example, boasts two start-up accelerators and an abundance of co-working spaces. It’s no wonder the city is already home to more than 1,000 tech companies that employ 41,000 people.
TeamCalifornia: Catalyst of Dreams
Companies looking to open, expand or relocate to the state will find an abundance of resources, support and advocacy at their disposal. TeamCalifornia is happy to be one of those resources. As a private non-profit membership-based organization, we represent every city, county and economic development corporation across the state. TeamCalifornia can serve as a wealth of knowledge and connections as companies select sites and thrive to get their projects expedited.
We do this because we know the allure of the California Dream. We also know how to make it a reality, because today’s ideas are tomorrow’s solutions.