Entrepreneurial Sacramento Valley Regional Economic Impacts ...

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Entrepreneurial Sacramento Valley Regional Economic Impacts ...

  1. 1. Entrepreneurial Sacramento Valley Regional Economic Impacts and Implications
  2. 2. Sacramento Valley Entrepreneurship Project <ul><li>Completed most comprehensive documentation of the region’s base of entrepreneurial firms ever done </li></ul><ul><li>Interviewed region’s entrepreneurs, assessed national entrepreneurship research and experience, and collected data on the region’s “habitat” or environment for entrepreneurship </li></ul><ul><li>Worked with local public and private leaders and organizations to explore how best to promote entrepreneurship in the region </li></ul>
  3. 3. Targeting entrepreneurship in the Sacramento Valley Habitat Potential Firms People
  4. 4. About one in five workers is self-employed, higher than the nation 10% 12% 14% 16% 18% 20% 22% 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 California Sacramento Valley US Non-Farm proprietorships as a share of total full and part time employment, US, California and the Greater Sacramento Valley Region, 1990 - 2002 Source: US Bureau of Economic Analysis
  5. 5. Self-employment is growing faster than wage and salary employment 0.8 0.9 1 1.1 1.2 1.3 1.4 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Wage and salary employment Non-farm self-employment Indexed regional farm and non-farm self-employment compared with total wage and salary jobs in the Sacramento Valley Region, 1990 - 2002 Source: US Bureau of Economic Analysis
  6. 6. Firm creation and closure responsible for most “churn” in regional economy 139,181 firms created (1989-2002) 109,589 firms closed (1989-2002) 11,406 firms relocated or expanded into region (1989-2002) 6,448 firms moved out of the region (1989-2002) 15,526 firms moved within the Sacramento Valley from 1989-2002
  7. 7. All counties have experienced net growth in firms
  8. 8. Almost half of Valley companies operating in 2002 were created in just the last five years Share of firms that were started before 1990 31% Share of firms started between 1990 and 1996 22% Share of firms started between 1997 and 2002 47%
  9. 9. Most new jobs are from new firms Distribution of Job Creation Within the Sacramento Valley, 1989-2002 New Jobs from new firms 68% New jobs from firm relocations/expansions into region 22% New jobs from existing firms 10%
  10. 10. Jobs created by new firms comparable to those of existing and relocating firms $- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 $160,000 $180,000 $200,000 Operations of Outside Firms that Relocated or Expanded into the Valley Firms that Started in the Sacramento Valley Firms that existed in the Sacramento Valley pre-1989 Headquarters that moved into the Sacramento Valley since 1990
  11. 11. Entrepreneurship has helped regional economy diversify +9.2% +23.2% +27.6% % Change 1989-2002 131 sectors 154 sectors 162 sectors 2002 120 sectors 125 sectors 127 sectors 1989 Revenues Employment Firms NUMBER OF INDUSTRY SECTORS ACCOUNTING FOR 50% OF JOBS
  12. 12. The potential for entrepreneurship in the Sacramento Valley <ul><li>Population growth, mostly through in-migration, has expanded the talent pool and could continue to fuel entrepreneurship in the Sacramento Valley </li></ul><ul><li>Increases in educational attainment and household income could portend growing entrepreneurship in the future </li></ul><ul><li>The region has grown its entrepreneurial diversity over time, with top performers constantly changing </li></ul><ul><li>The region is successfully participating in venture capital and other, nationally competitive funding </li></ul>
  13. 13. Sacramento Valley’s population has grown steadily 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 6.7% 6.75% 6.8% 6.85% 6.9% 6.95% 7% 7.05% 7.1% 7.15% 7.2% Sacramento Valley Sacramento Valley as a share of CA Sacramento Valley Regional Population and as a share of California’s population, 1990-2002 Source: U.S. Census Bureau Sacramento Valley Population Share of California’s population
  14. 14. Most recent population growth is mostly from in-migration 19,486 19,955 18,327 16,921 16,651 15,162 13,839 13,628 13,049 13,648 14,538 15,163 49,314 21,095 14,523 3,679 7,499 11,388 19,761 15,222 44,201 54,352 51,212 43,687 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Natural Increase Net Migration Natural population increase and net migration to the Sacramento Valley Region 1991 - 2002 Source: State of California, Department of Finance, California County Population Estimates and Components of Change, July 68,800 41,050 32,850 20,600 24,150 26,550 33,600 28,850 57,250 68,000 65,750 58,850
  15. 15. Growing numbers of more highly educated residents 90377 158662 322753 324941 115444 184765 85684 95,642 151,761 344,265 402,812 128,438 241,425 120,847 0 50000 100000 150000 200000 250000 300000 350000 400000 450000 Less than 9th Grade 9th to 12th no diploma HS graduate Some college: no degree Associate Degree Bachelors Degree Graduate or professional degree 1990 2000 Population > 25 years by educational attainment level in 1990 and 2000 in the Sacramento Valley Source: US Census Bureau
  16. 16. Growing proportion of households at the highest income levels 45% 64% Less than $40,000 31% 27% $40,000 - $74,999 24% 9% $75,000 or more 2000 1990 Annual Income Level (% of households)
  17. 17. Top performing industry sectors keep changing thanks to entrepreneurship <ul><li>A comparison of the top fifty industry sectors (i.e., those at the 8-digit SIC level with the most total firms) in 1989 and 2002 shows that: </li></ul><ul><li>34% of the leading sectors in 1989 had been displaced by 2002 </li></ul>
  18. 18. Shifting venture capital investments suggest areas of future potential 1995 Business Products and Services 11% Computers and Peripherals 4% Media and Entertainment 11% Software 26% Telecommunications 48% Venture capital investments in Sacramento Valley companies by industry, 1995. Source: PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association: MoneyTree Survey 2003 Biotechnology 14% Healthcare Services 1% IT Services 14% Medical Devices and Equipment 43% Semiconductors 18% Software 4% Telecommunications 2% Financial Services 4% Venture capital investments in Sacramento Valley companies by industry, 2003 Source: PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association: MoneyTree Survey
  19. 19. Region’s venture capital investment has grown substantially $47.25 $21.31 $18.27 $77.31 $120.64 $335.72 $152.58 $111.12 $93.47 $0 $50 $100 $150 $200 $250 $300 $350 $400 1995 1996 1997 1998 1999 2000 2001 2002 2003 Venture Capital Investment Annual venture capital investment to Sacramento Valley companies, 1995 - 2003 in millions of real dollars Source: PricewaterhouseCoopers, Thomson Venture Economics and the National Venture Capital Association: MoneyTree Survey (In $ Millions)
  20. 20. Federal research funding has also grown substantially $182.54 $308.85 $- $50 $100 $150 $200 $250 $300 $350 1993 2002 Total Federal R&D dollars Federal R&D dollars allocated to the Sacramento Valley, 1993 and 2002, in millions of real dollars Source: RAND $ Millions
  21. 21. UC-Davis patent production rising 8.9% 11.0% 9.8% 9.1% 7.5% 10.6% 10.3% 14.3% 0 20 40 60 80 100 120 140 FY 1996 FY 1997 FY 1998 FY 1999 FY 2000 FY 2001 FY 2002 FY 2003 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% Patents filed Patents issued Davis share of system patents filed Number of patents filed by UC Davis compared to the number of patents issued, FY 1996 - FY 2003 Source: University of California Technology Transfer Program
  22. 22. Despite track record of business creation and indications of future potential, few firms achieve sustained, high growth (Companies with at least 250k in annual revenue, that grew by at least 10% for four consecutive years) Source: NETS Database 0 20 40 60 80 100 120 140 160 180 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002
  23. 23. The Entrepreneurial Sacramento Valley Regional stewards of innovation and entrepreneurship Local leaders helping local entrepreneurs System of entrepreneurial support Patchwork of entrepreneurship programs Rapidly converting innovations into companies Producing innovations with commercial potential Top priority in economic development Top contributor to economic development Identity as an Entrepreneurial Valley Individual entrepreneur success stories TO FROM

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