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Industries that spur growth named

L.A. County Economic Development Corp. identifies industry clusters in report released last week

Posted: April 4, 2012 2:00 a.m.
Updated: April 4, 2012 2:00 a.m.
 

Facing the challenges of preparing an educated and skilled workforce to compete in the global market, Los Angeles County Economic Development Corporation, or LAEDC, issued a report last week identifying industry clusters in the county to focus and tailor the organization’s policy and economic development efforts in the region.

The end goal is to allocate enough resources to maintain or build critically needed infrastructure, foster a climate of technological innovation and product development and pursue sustainable growth, the report stated.

Building areas with like-industries, or geographic clustering, enables firms to more easily work together to attract suppliers, develop a skilled labor pool and spur innovation, ultimately allowing companies to become more competitive, the report said. All these factors also help spur economic growth.

Like the Santa Clarita Valley Development Corp., which identified local industry clusters more than a year ago, LAEDC found 14 distinct industry clusters in the county of which the top eight include financial services, entertainment, analytical instruments, aerospace, information technology, publishing and printing and biomedical.

In comparison to the results of the SCVEDC’s study, which identified aerospace and defense, advanced manufacturing, medical devices, digital media and entertainment and information technology as key local industry clusters, there is a relationship between Santa Clarita and L.A. County industry strengths.

A concern raised by the LAEDC’s report is what the organization refers to as “traded industry.” LAEDC defines this sector as one in which competitive pressures spur innovation and expansion, however, the results of the study finds an ongoing decline in employment since 2002, citing it a “worrisome trend.” Entertainment, aerospace, information technology and biomedical industries fall in this arena.

Local-serving industry clusters are defined by LAEDC as ones where expansion is limited, and the group placed metal manufacturing in this category. This sector has been in decline over the past decade in terms of employment, LAEDC reported.

As for entertainment, LAEDC reported 159,900 people are employed in L.A. County in this cluster, making up 63 percent of the of California’s entertainment employment market and 15 percent share of the nation’s employment in the same field.

While entertainment wages overall are reported to be second only to financial services, LAEDC noted that there is a wide gap among individual industries that make up the clusters.

In the past decade, aerospace employment is concentrated mostly in the manufacturing of products and parts, a trend that started long ago in Southern California, LAEDC reported. More than half the state’s employment, and more than 7 percent of the nation’s employment, occurs in L.A. County. And although the average annual wages exceed the average, only 36,800 employees are in the field, LAEDC reported.

The county’s biomedical cluster, while still young, is responsible for attracting more than $43.2 million in venture capital in the third quarter 2011, LAEDC reported. One-third of the more than 23,000 employees are in the medical equipment and electromedical apparatus fields each.

Information technology, employment is concentrated in software publishing leads the field, but wireless carriers and semiconductor and printed circuit board manufacturing are close behind. While small, employment has been trending up in the county, the report said.

As for metal manufacturing, which LAEDC identifies as an industry cluster where expansion is limited, employment has trended downward for the past decade — coating, engraving and heat treating account for 25 percent of the industry, and threaded products contribute 20 percent, LAEDC reported.

jadkins@the-signal.com / 661-287-5599

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