SOLANO'S CLUSTER PORTFOLIO REMAINS RELATIVELY STRONG
Why Is This Important?
A region’s ability to generate wealth is often determined by the growth in activity of similar industry sectors, or “clusters.” Employment and income growth in a region are dictated by a cluster’s strength and competitive advantage - a calculation that measures the percentage of regional employment against the percentage of the state’s employment in that cluster.
How Are We Doing?
This year’s index utilizes the National Establishment Time Series Database to try to capture the economic changes in the region – a change from previous cluster analysis, which was based on public labor market data. Over the past 15 years, Solano County has developed a diverse and growing industry cluster portfolio of growing and specialized industries.The most highly concentrated clusters in the county are Construction, Specialized Manufacturing, and Health & Social Services. Construction is also one of the largest clusters in terms of employment, alongside Professional & Environmental Services.The fastest growing cluster in the region is Life Sciences, which includes Pharmaceuticals, Medical Devices, and Biotechnology.
Employment continues to grow in some of the county’s industry clusters. From January 2008 to 2009, employment increased 12 percent in Professional & Environmental Services and 19 percent in Life Sciences. Since reported data is current as of January 2009, the increase in Life Sciences employment does not reflect the workforce reductions imposed by two Solano County companies, Genentech and Alza. Genentech announced in November 2010 that it planned to lay off 100 workers from its Solano County facilities over the next two years.2 Alza Corporation, a pharmaceutical and medical delivery company, announced its third round of layoffs in a little more than a year in November 2009.3 Two clusters contracted with employment losses of 5 percent in Trade & Logistics and 3 percent in Construction from 2008 to 2009.
The Construction cluster is the most highly concentrated in the county, with employment shares 30 percent higher than the statewide average in 2009.This cluster employed 16,300 people in Solano County, the second largest of any industry cluster. Professional & Environmental Services was the largest employment cluster in the county with 22,200 employees in 2009. Employment in this cluster expanded on average 6 percent annually from 1995 to 2009.The fastest growing cluster in the 15-year period is Life Sciences. During this period, employment in Life Sciences grew, on average, 7 percent a year and boasted 2,100 employees in 2009. Also highly concentrated, Specialized Manufacturing maintained average employment growth of 0.8 percent every year since 1995, while employment in this industry statewide contracted an average of 0.6 percent annually. Not included in the recent cluster analysis are the individual reports on the energy cluster and the food chain (scheduled for release in February 2011).The County and Solano Economic Development Corporation continue to move forward in supporting growth in those clusters.
Micro-enterprise businesses are small businesses, often unregistered, that require low sums of seed capital. As a way to connect the micro-enterprise businesses (establishments with 10 or fewer employees as well as nonemployers) to Solano’s cluster portfolio, this year’s analysis is based on the National Establishment Time Series database instead of the public labor market data. As a result of rapid employment growth since 1995, micro-enterprises in Solano County now account for 36 percent of total employment in 2009 up from 24 percent in 1995. Employment in micro-enterprises grew by 68 percent during the same time frame, far outpacing growth in total employment in the county, which grew by only 14 percent. Accounting for 27 percent of micro-enterprise employment, Professional & Environmental Services represents the largest percentage with a total of 14,800 employees in 2009.The second largest category is Services, with 11,900 employees in 2009.