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    The New Economy and the Future Economic Health of Southern ... The New Economy and the Future Economic Health of Southern ... Presentation Transcript

    • The New Economy and the Future Economic Health of Southern California Venture Capital Investments in the Nation and the SCAG Region Updated October 2001
    • Venture Capital Defined
      • Equity investments made in emerging private companies
      • Barometer of regional and national economic health
      • Identifies promising industry segments
      • Predictor of future output, employment, and wealth growth
    • Factors Influencing Where Capital is Invested
      • Proximity to major research institutions and universities
      • Proximity to major international airports
      • Educated workforce
      • Proactive government
      • Venture capital firms located in the area
      • Cultural amenities
    • Venture Capital Investments in the United States
      • Venture capital investments grew rapidly in 1999 and 2000, with the peak quarter in the 1st quarter 2000
      • Investments have dropped drastically in 2001 compared to the previous two years
      • California has received 46% of the investment dollars during the 1997-2nd Quarter 2001 time period
    • Nationally, Investments Peaked in the 1st Quarter of 2001
    • California is the National Heavy Weight in Venture Capital Investments
    • The SCAG Region Receives a greater percentage of Investments than San Diego...
    • … But SCAG Trails San Diego and the U.S. in Average Per Person Investments
    • Regionally, 2000 was the Best Year for Venture Capital Investments.
    • This 2-Year View Shows Investment Hot Spots in Santa Monica, Irvine, the South Bay, Pasadena, and the Conejo Corridor .
    • Currently, Venture Capital Investments remain Steady with 1st Quarter 2001 and Well Below the Previous Year’s Level.
    • Discussion - The Double Edged Sword of Venture Capital
      • Venture capital investment is the fuel of the new economy and is necessary for future economic prosperity
      • Areas without venture capital investment in new economy jobs will lack the highest paying, most wealth generating jobs
      • However, venture capital investment inflates real estate prices, limiting the availability of affordable housing
    • Link to Jobs/Housing Balance
      • Venture capital investments tend to flow to areas that are Jobs-Rich...
      • ...Despite the fact that housing costs in these Jobs-Rich areas are higher than elsewhere
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    • Future Ramifications
      • The SCAG economy is diversified and has not been as adversely affected by the decrease in venture capital investments as Silicon Valley
      • In the aftermath of the terrorist attacks on the U.S., high paying New Economy jobs may be replaced with high paying engineering jobs
    • Future Ramifications
      • The defense industry may resurface as a driving high-paying, wealth-generating industry in Southern California