Giving Sacramento an Edge

Greater Sacramento Area Economic Council’s Dr. Chris Weare tasked with making the region more competitive

Back Q&A Nov 7, 2016 By Rich Ehisen

Every community wants a robust economy capable of competing with any other in the country. But how do you do that? That’s the question the Greater Sacramento Area Economic Council is trying to answer. We sat down with Dr. Chris Weare, the group’s director of research and strategy, to learn about its efforts to pump more life into the Capital Region’s economy.

You’ve talked of doing an in-depth, data-driven assessment of the Sacramento market to help drive better economic performance. What data are you looking at?

In His Own Words

— Dr. Chris Weare

My best trait:

I am at once highly analytical and relentlessly critical of my own work, which keeps me open to new ideas and enables me to avoid being swept up by popular but wrong-headed ideas

My worst trait:

I’ve already used up my life’s supply of patience for bad customer service from either the public or private sectors

What I enjoy most about Sacramento:

The grid offers a great urban lifestyle minus many of the pathologies of urban life

My proudest career moment:

In a paper I wrote over 20 years ago, I predicted that many-to-many communications (the term “social media” had not been invented yet) was the emerging communications media that would have the greatest impact on politics — I should tweet that

If I could have any other profession, I would be:

Cabinetmaker

We have a number of strategic pillars that include workforce development, workforce attraction and retention, business environment and governance. Once we start looking at the data, we can find where Sacramento is performing worse than other comparable cities. A good example is that we retain less than 40 percent of our [residents who have obtained bachelor’s degrees] in this region. They’re being attracted to the Bay Area, up to Seattle, down to L.A. They’re not staying here, and that’s a shame because we’re doing a great job of training them at Sacramento State and UC Davis and other colleges in this area. But when you look at the metrics that we have for internships and for positions in organizations that are working to be a bridge between school and the work environment, it is actually very thin. The institutional infrastructure doesn’t exist. So that immediately was a discovery. Now I’m beginning to talk to people who are working on these issues and want to get robust sets of programs and institutional structures in place to really start addressing that issue.

Is it reasonable for Sacramento to try to compete against cities like San Francisco or L.A. that have so much more material wealth and resources?

Right now, there is an enormous flight of businesses leaving the Bay Area and L.A. to other states. If a guy from a small tech startup that’s getting another round of funding is increasing his level of employees to 100, but can’t afford it in the Bay Area and is now beginning to think about cities like Austin, Denver, Salt Lake City or Seattle as alternatives, we want to make sure we’re on the list as well. We want the advantages of remaining close to the Bay Area but having a more reasonable cost structure to be a factor in their decision-making.

You see Sacramento as possibly becoming part of a “Bay Area mega-region.” In what way could that happen?

The Bay Area is reaching a level of congestion that’s making it difficult to grow the number of businesses and the number of people who live on the east and west side of the Bay. The idea of the mega-region is that if we want to maintain the vitality of the economic engine that has been the Bay Area for all these years, we have to make it feasible to do business in a much broader area — a region that stretches up to Santa Rosa, out to Sacramento and down to Salinas. A big part is getting a transportation infrastructure in place so it is feasible for you to have a part of your business here in Sacramento and part of your business in the Silicon Valley. There are flights now between McClellan and a former military base in Silicon Valley, so you can get back and forth very quickly. We [also] need to minimize the congestion on I-5, and we need to make sure the Capitol Corridor train becomes a more reliable, faster commute.

What is Sacramento’s economic outlook if a mega-region doesn’t materialize?

When you look at what has happened to low-wage workers in Sacramento, it’s really devastating. During the economic downturn, the income of the bottom quintile of earners in this region went down by over 20 percent. These people are already worse off, and then they lost over 20 percent of their earning power. Our youth unemployment rate is also one of the highest in the nation. When you really dig down beneath the employment statistics, the unemployment rate has come down but the labor participation rate among working-age men remains at a very, very low level. It’s much lower than the pre-recession rate. Usually, that’s interpreted as people becoming so disaffected by their prospects in the job market that they just stop trying. These are people who are very, very much hurting. If you care about homelessness, if you care about poverty, if you care about crime, what you really should care about is making sure we have an economy that creates jobs for these people.

The economy has generally recovered from the Great Recession. However, some significant areas are still struggling, particularly in regard to youth employment. How can what you are doing help address this need?

One of the primary employers for youth is the hotel and entertainment industry — waiters, people who clean hotel rooms. These are not great jobs, but they are good first jobs. We typically underperform other cities in terms of hotel and entertainment employment. And so one way we’re really thinking now is: What is the broad range of strategy? Supportive festivals? What do we do with the Convention Center? What do we do with the Community Center Theater? What do we do with the waterfront? My hope is that every single time we start thinking about what we do with X infrastructure, the next thing we say is let’s do an analysis on what’s going to be the impact on youth employment or the creation of jobs that are attractive to young people.

Good data is key to your work. You’ve complained that government data is too “backward-looking.” Where are you getting data?

We need to be plugged into the big data revolution, and to the fact that there are people who are being incredibly creative in finding ways to develop data. For example, the job search function is almost completely on the internet now. One of the main questions for the Sacramento economy is that if a tech firm moves here from the Bay Area, are they going to be able to find the talent that can staff their new startups? Government data doesn’t have that much detail. The U.S. Census [Bureau] provides us with the flows of people from San Francisco to Sacramento, but that’s year-old data and it has nothing about their educational capabilities. We did some data scraping on LinkedIn. We looked at every single high-tech job listed in Sacramento and we were able to trace where people applying for those jobs were applying from. When you do this, you see that 20 percent of the people who are applying for high-tech jobs in Sacramento are from the Bay Area.

Can raw data alone truly give a full picture of what makes a region like this one competitive?

We’re going to be using a lot of metrics, and so these are summaries of particular data that alert you to either situations that are going well or situations that are causes for concern. Based on that, we tell a richer story. For example, we’re a very diverse city. Why does that matter? Well, the richer story is that regions that are more diverse grow more rapidly than regions that are less diverse, and companies that are more diverse are more profitable. Similarly, we just got rated [by the marketing company Infogroup] as the hippest city in California; the fourth hippest in the U.S. Interestingly, this metric was very data-driven … They looked at the concentration of certain establishments they associated with hipsters: bicycle shops, independent coffee shops, tattoo parlors, live music places and a number of others. Sacramento has a lot of those amenities for people. So that makes it very attractive. Does that tell the whole story? Well, do you really want to say we have one tattoo parlor for every 783 people while Seattle only has one tattoo parlor for every 1,000? That doesn’t tell the story. But when we connect that to music festivals — if we bring people up here for the [now-uncertain] TBD music festival, the Aftershock music festival — then we can create a really rich story that connects and validates all of that data. 

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