The Board of Governors of the California Community Colleges

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1 The Board of Governors of the California Community Colleges AVE BLANK PRESENTED TO THE BOARD OF GOVERNORS DATE: January 14, 2019 SUBJECT: Workforce & Economic Development Sector Strategies Item Number: 4.1 Attachment: No CATEGORY: Workforce & Economic Development TYPE OF BOARD CONSIDERATION: Recommended By: Lynn Shaw, Interim Director Consent/Routine First Reading Approved for Consideration: Eloy Ortiz Oakley, Chancellor Action Information X ISSUE: This item provides an update on the ten sectors in the Workforce and Economic Development Division under the division s strategic masterplan called Doing What Matters for Jobs and the Economy. BACKGROUND: This item was previously agendized for the November 2018 Board meeting and removed for lack of time. The mission of the Workforce and Economic Development Division is to provide quality leadership to the 115 California community colleges as the institutions develop a targeted career pathway framework for the 2.1 million students enrolled in the nation s largest system for worker training. Starting in , Doing What Matters for Jobs and the Economy provided the four-pronged strategic blueprint to address the skills gap: 1) give priority for jobs and the economy; 2) make room for jobs and the economy; 3) promote student success; and 4) innovate for jobs and the economy. As a part of the effort to innovate, the Board of Governors launched in 2016 the Strong Workforce Taskforce to develop more workforce opportunities and lift low-wage workers into livingwage jobs. The result of this statewide study resulted in a commitment to create one million more middle-skill workers to fill a projected 1.9 million vacant new jobs over the next decade. Both California s Governor and the Legislature have responded favorably to the Board s initiative, providing an on-going $248 million in new community college career education funds and $164 million in K-12 new local education agency funding. This item outlines the sector strategies to best invest these new dollars in the top ten new and emerging industry sectors in California: 1) Advanced Manufacturing; 2) Advanced Transportation and Logistics; 3) Agriculture, Water and Environmental Technologies; 4) Business and Entrepreneurship; 5) Energy, Construction and Utilities; 6) Global Trade; 7) Health; 8) Information and Communication Technologies/Digital Media; 9) Life Sciences/Biotechnology; and 10) Retail/Hospitality/Tourism Learn and Earn. (Background cont.) RECOMMENDATION: This item is presented for Board information and discussion.

2 (Background cont.) Examples of the details and job development strategies for some of the ten sectors are: Advanced Manufacturing: Some experts define advanced manufacturing as a new way of accomplishing the how to of production, where the emphasis is on customization and scalability, while advancing the technologies necessary to improve capabilities. The manufacturing sector is critical to California s economy. For every one job created in manufacturing, at least two and a half jobs are created to support the sector. Further, manufacturing firms create regional wealth by producing a product that is exported across the state, nation and/or world. This attracts additional funds to the region building wealth for businesses, individuals and community. Because of this ripple effect, manufacturing firms have a deeper impact on the state of the economy than most other industries. There are about 64,000 manufacturing businesses in California. The manufacturing sector accounts for 1.3 million jobs in California or about 7% of the state s employment across all sectors. While manufacturing experienced an overall loss of jobs in (-3,276 jobs), sectors such as food manufacturing and biotechnology actually added jobs (4,104 and 3,232 respectively). Revenue generated by manufacturing sector in 2011 totaled $341 billion. The 2012 average sector earnings per worker (EPW) for manufacturing was $92,532 that is 62% more than the average EPW across all sectors in California. Agriculture, Water and Environmental Technologies: Most people think agriculture is farming or ranching. However, modern agriculture encompasses much more. Agriculture and agricultural sciences touch every aspect of American society from the individual consumer s health and safety to the nation s welfare, security, and environmental sustainability. Agricultural activities are broken down into four specific clusters within the sector, as follows: 1. Agriculture Support: activities related to agriculture including veterinary services, equipment operators/mechanics, forest & conservation workers, and pest control. 2. Agriculture Production: production processes are specific to the commodity, but include crop, vegetable and animal farming, poultry & egg production, and aquaculture. 3. Agriculture Wholesale Trade: all activities related to the sale, administration, operation, management, production, and support of wholesale endeavors within the agriculture sector. 4. Agriculture Water and Environmental Services: services related to water treatment and environmental planning including irrigation, hazardous materials workers, septic servicers/cleaners, inspectors, and environmental science and protection technicians. 22,731 companies operate in the agriculture sector within California alone. Agriculture accounts for over 1.5 million jobs in California. The agriculture sector generated over $69.7 billion in revenue in By the year 2014, the agriculture sector is forecasted to add over 2,000 new jobs. Annual wages for all industries within the agriculture sector in 2011 averaged $40,000; agricultural wholesale trade and agricultural water & environmental services clusters far outperformed the average annual wages within the sector as a whole.

3 Business and Entrepreneurship: The Small Business Administration (SBA) defines a small business as one that is independently owned and operated, is organized for profit, and is not dominant in its field. Depending on the industry, size standard eligibility is based on the average number of employees for the preceding twelve months or on sales volume averaged over a three-year period. However, for consistency, this profile uses the SBA s Office of Advocacy criterion that describes a small business as an establishment with less than 500 employees. Global Trade: Examples of small business sectors include: Professional, Technical, and Scientific Services Personal and Laundry Services Merchant Wholesalers, Durable Goods Food Services and Drinking Places Administrative and Support Services Specialty Trade Contractors Construction of Buildings Repair and Maintenance Clothing and Clothing Accessory Stores Examples of specific small businesses include: Custom Computer Programming Services Advertising Agencies Beauty Salons Garages Security Guards and Patrol Services Drywall and Insulation Contractors Extermination and Pest Control Services The small business owner generates ideas for specific products or services. The business is started to sell products or service. 15% of small businesses in California provide professional, technical and scientific services. In California, there were more than 280,000 small business enterprises in Each small business has an average of three employees. 106 community colleges in California provide education in small business development. A supply chain is a system of organizations, activities, technologies, and resources that help move a product or service from supplier to customer. According to the Council of Supply Chain Management Professionals, supply chain involves sourcing, procurement, conversion, and all logistics related activities. It also includes coordination and collaboration among channel partners, such as suppliers, intermediaries, third-party service providers, and customers. Supply chain functions can be performed by third-party providers, such as independent logistics companies, as well as internally within the firms as part of business operations. Hence, supply chain related employment can be found across a variety of sectors, including manufacturing, retail, agriculture, wholesale, and others. International trade involves exchange of capital, goods, and services across international borders. Supply chain activities create important support systems and linkages for international trade to take

4 place. International trade is a major economic driver for the state of California. In 2012, California exports amounted to more than $161 billion, which is about 11% of total U.S. exports. According to the California Chamber of Commerce, state s trade and exports translate into high-paying jobs for more than 1 million of Californians. Many economists contend that exported growth is the only sustainable way to maintain living standards and secure long term economic success. As supply chain technologies advance, they offer many opportunities to increased efficiency and productivity across the industries that are involved in the international trade in California. Health: In 2011, there were over 75,000 identified exporters in California, 96% of which were small and medium enterprises (500 or fewer employees). California ranks first in the nation for exporting computers, electronic products, and food and kindred products. California exports to approximately 225 foreign markets; the top three trading partners are Mexico, Canada, and China. More than 47,000 California firms may be connected to logistics/supply chain activities. Over the next three years, employment for supply chain-related occupations is expected to grow by 12,900 jobs. Employers across a variety of industries posted over 50,000 online job advertisements for twelve supply chain occupations in Median 2012 hourly wages for supply chain workers range from $14 and $38. According to the Bureau of Labor Statistics, the healthcare sector combines medical technology and the human touch to diagnose, treat, and administer care to the general population. The healthcare sector is typically comprised of three subsectors: 1. Ambulatory Health Care Services: provides direct and indirect health care services to ambulatory patients. 68,230 establishments; 862,000 employees. 2. Nursing and Residential Care Facilities: provides residential care combined with either nursing supervisory, or other types of care as needed. 7,700 establishments; 268,300 employees. 3. Hospitals: provides medical, diagnostic, and treatment services to inpatients and some outpatient services. 1,400 establishments; 497,600 employees. The healthcare sector is one of the largest employers in California, providing a wide range of job options to residents of both urban and rural areas. With rapid population and expanded coverage under the healthcare reform, the demand for high-quality healthcare services is increasing. In order to provide these services, a sufficient pool of qualified workers is needed. Healthcare continues to add jobs, albeit at a slower pace than usual because of the recent recession. This provides job seekers with an opportunity to enter and retain employment in a wide range of health occupations and skill levels. Many of these jobs provide good wages and career advancement opportunities. Developing a competent healthcare workforce across a full spectrum of occupations is crucial for the sector and economic well-being of California.

5 There are approximately 77,300 healthcare sector establishments in California. The healthcare sector accounts for 1.6 million jobs in the state, which comprises approximately 8% of employment across all sectors. Over the next three years, this sector will add nearly 130,000 new jobs growth of 8%. Total revenue generated by the healthcare sector in 2011 reached $158 billion. Average sector earnings per worker in 2012 totaled $70,876.