SIGNS OF CONTINUED GROWTH IN SOLANO'S CLUSTER
Why Is This Important?
A region’s ability to generate wealth is often determined by the activity of similar industry sectors, or “clusters.” Jobs 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. The year 2008 is the last year available for the most comprehensive industry employment data, however due to the changes in the North American Industry Classification System, a comparison to 2006 and years prior is not possible.
How Are We Doing?
Over the last fourteen years, Solano County has seen overall strong performance in its industry clusters, although the county has not been immune to the recent economic downturn. Between 1995 and 2006, all seven clusters expanded in employment, with Life Sciences growing the fastest. Construction and Professional & Environmental Services represent the two largest clusters in terms of total employment.
With the recent economic downturn, the county’s total employment fell 1 percent between 2007 and 2008. The county’s seven industry clusters accounted for 36 percent of Solano’s total employment in 2008. While five of the seven industry clusters were hit with losses, two clusters actually expanded over this time period. With gains of roughly 400 jobs in each, Trade & Logistics increased by 6 percent and Health & Social Services increased by 5 percent. The growth in Trade & Logistics is primarily due to an increase of employment in two industry sectors: Machinery, Equipment, & Supplies Merchant Wholesalers and Support Activities for Water Transportation. In Health & Social Services, Home Health Care Services increased by 49 percent, adding 263 employees. The hardest hit, Construction witnessed the largest contraction of 13 percent with a loss of 1,500 jobs.
In addition, from 2007 to 2008, four of the county’s clusters remained highly concentrated relative to the state, which suggests there are areas of growing specialization in the county. In 2008, Life Sciences and Special Manufacturing were nearly 30 percent more concentrated than the state. Although five clusters shed employment, three of those clusters maintained a higher concentration relative to California.
Solano County’s energy cluster is rapidly transforming, creating new opportunities for economic prosperity and job growth. The cluster is diverse, with both carbon-based energy and clean energy sectors and businesses. Together, these sectors employ over 1,500 people across more than 60 establishments. They include companies in oil and gas drilling and petroleum refining, as well as clean energy generation (e.g., solar and wind), energy conservation products and services, and clean transportation. Jobs in Solano County’s energy cluster span a wide range of occupations at the high, medium, and entry levels, with many occupations important in both carbon-based and clean energy sectors.
More importantly, Solano County is growing jobs in Clean Energy and Transportation at a faster rate than the carbon-based energy, or even the overall economy. Overall, total jobs grew 30 percent from 1995 to 2007, while clean energy and transportation jobs grew 72 percent. The bulk of the growth occurred in energy generation, which grew from an estimated 130 jobs to 300 jobs.