The City Wall of Economic Strength: Part 2

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In a prior article about Redding’s economic foundation, I made a point that resource extraction historically provided the foundational stones for our economic wall, bringing in outside money. As these industries changed, no longer providing the jobs they once did, our city was unable to replace those gaping holes in our foundational wall. Instead, we built up an economy around service and retail, which relied upon the recirculation of existing money. The gaping holes in the foundation of our economic wall, need to be replaced with diversified sectors that bring in outside money and represent the jobs of the future.

When a city like Redding relies upon industries that don’t bring in new money, it becomes vulnerable to the winds of economic downturns. We are just now rebuilding our economic wall after the last recession while other cities had recovered by 2010. As we strategically replace these key foundational stones with diversified sectors, we become less vulnerable to the boom and bust cycles that haunt our city.

So what are the jobs of the future? It is estimated that seventy percent of all jobs in California will be in STEM in the next ten years. Technology will continue to grow, and although tech and manufacturing sectors represent only four percent of our local economy, there is some exciting growth and potential here in Redding. The mobility of this sector, proximity to the Silicon Valley, low cost of living, and quality of life make Redding a good place for the tech sector. In addition, the Shasta County Office of Education understands the importance of STEM and is working strategically with all of the players in our community to develop a trained workforce. We have entrepreneurs like Faye Hall, formerly of Google, who started Code It and Build It to help train children and adults in coding skills here in our community. Shasta College has started an advanced manufacturing program, as this is another area of growth in our community.

Examples of tech companies that are growing in Redding include Spiritus Solutions, which provides back office support for Silicone Valley companies, Limelight Health, which has grown from four to twenty-seven employees in little over a year and smaller companies live Catavolt, and many others. Of the fifty new startups in the past year or so, close to eighty percent of these are in the tech sector. This is telling us where our future, or at least a good chunk of it, is headed. What if we doubled this sector from four to eight percent in the next five years? I believe it’s doable, and the economic impact would ripple throughout our economy. The synergy created by the growth in this sector will inspire new ideas and innovations, spawning the growth of new startups.

I hear people say we can’t do tech here. The truth is, we are doing tech here, and it’s growing. Instead of looking for reasons why we can’t be successful in growing jobs locally, let’s talk to the people who are doing it. What additional infrastructure do they need to accelerate growth? Wider access to lower cost broadband may be a worthwhile investment that our city makes to grow the jobs of the future and give our children an opportunity to make their dreams come true here.

In my run for Redding City Council in 2016, my economic focus group created a survey, which I am using to collect data from business owners. I want to know why they think Redding is a good place to do business. Do they feel the city appreciates what they bring to the community and what recommendations do they have for the city that would accelerate job growth? If you are interested, you can share your vision for our city on my website at juliewinter.com. Let’s strategically work together to leverage our assets as we grow the jobs of the future right here in Redding.

Julie Winter is an NP who works in family practice with Andre Van Mol,MD.  Julie is a graduate of Leadership Redding and currently serves on the Community Development Advisory Committee for the city of Redding, as well as the board of directors for Advance Redding and the Redding Area PA/NP Alliance.  She has lived in Redding since 1989 and is married with 2 children and 3 grandchildren. She is a 2016 Redding City Council candidate.

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13 Responses

  1. Avatar name says:

    Good analysis/ideas.    By the way, it is “Silicon” Valley – (“Silicone” Valley is a nickname for San Fernando Valley because of the type of movies they make there…)

  2. Avatar A Brady says:

    We need to push for tech infrastructure yet we have a Shasta County Planning Commissioner like the one below:

     

    From David Benda item in R/S Paper May 2015:

    ‘But Shasta County Planning Commissioner James Chapin questioned the need for instant information via the palm of your hand. Chapin spoke before voting to deny Verizon a permit to build its tower. Commissioners Gene Parham and Roy Ramsey voted for approval. The motion needed three votes to carry so the project is in limbo.
    “When is this going to end?” Chapin said. “I don’t believe we need cellphone coverage everywhere in the county.”’

  3. Steve Towers Steve Towers says:

    Julie says, “Of the fifty new startups in the past year or so, close to eighty percent of these are in the tech sector.”

    This factoid also appeared in the first column, and I still find it hard to believe.  When I questioned it the first time, Julie responded, “The data about 80% of the new local startups being in the tech sector comes from our EDC.”

    I can’t find anything resembling this statement on the EDC’s website.  I’m just going to say it flat out:  It’s preposterous to think that any single sector accounts for 80% of the start-ups in Shasta County—let alone the tech sector.  Repeating it ad nauseam and vaguely attributing it to EDC doesn’t make it true.

    I’ll also repeat this:  It’s fundamentally untrue that only resource extraction and manufacturing bring in money, and all other sectors merely recirculate it locally.  CH2M, as an example, employs a lot of people in the professional services industry, and most of their work involves contracting to outside entities.  Those are outside dollars coming in, and it’s a mistake to discount the contribution of those professional services-industry dollars to our local economy.  People who want to be in charge of shaping local economic policies need to have more nuanced understandings of these issues.

    • Avatar Julie Winter says:

      Steve, thank you for your interest in our local economy.  I apologize if I gave the impression that sectors other than tech or manufacturing are not valuable or don’t bring in any money from outside the county.  CH2M and architectural firms like NMR (as well as others) are a part of the business and professional sectors that do bring in some outside money and are of tremendous value to our city.  Per the EDC, the average economic output for a job  in B&P is $88K.  I am grateful for every job we have in our community and we need each sector.   Even the hospitality sector, which has a lower economic output of $54K per job, brings in outside money  from people traveling through the area.  There are two main points here and that is we need more jobs that don’t just recirculate money and we need more jobs that have a higher economic output.

      Per the EDC our largest local sectors are government, education, health and retail.  These sectors typically have an economic output of $75-$85K per job.  In contrast, manufacturing is $387K and IT is $256K per job.  My vision is to see our city diversify and increase the sectors that have higher output, so we have more boom and less bust!

      The 80% tech statistic came from staff at EDC, not from their website.  The startups are in various stages of development and Hope Seth over at EDC could give you more information if you are interested.  The tech industry is fairly broad, and I have not limited it to just high tech.  Examples of some recent tech related startups are Tegile, FireWhat and Limelight Health.  Certainly, other industries related to our abundant sunshine, natural beauty, outdoor activities, lifestyle and creative arts would be additional areas to diversify beyond retail and service industries.

      Feel free to contact me at julie@juliewinter.com.  I’d be interested to hear your ideas about what we can do to provide good jobs for the next generation.  It saddens me that many of our kids (my oldest son included) have to move way from Redding to find work.

       

       

      • Steve Towers Steve Towers says:

        Thank you, Julie.  I sent Hope an email asking for the source of the 80% figure.  I’m positive it has something to do with how broadly “tech” is defined.  However, I’m not convinced it makes sense to define “tech” so broadly that the term loses meaning.

        I’m only harping on this because if we’re lumping everything as “tech” and signification portions of that new start-up category are in reality other sectors, it potentially blinds us to fruitful non-tech areas to nurture.  That was the point of my CH2M/professional services example.  And yes, NMR is another great example.

        My other point is that Shasta County is not a closed system.  I understand the logic of favoring “created money” as opposed to “recirculated money.”  CH2M jobs largely recirculate wealth created elsewhere, but to Shasta County, it’s almost all inflow of new money.  Locally, we’re not in a position to turn up our noses at any sources of clean high-paying jobs that bring in outside money, I’m sure you’ll agree.

        BTW, I don’t work for CH2M, and they’re not a client.  Even though I’m advocating on behalf of professional services business sector using them as an example, I’m not at all sure they appreciate being dragged into the discussion.  Sorry, CH2M.  It comes with being the big dog on the top of the hill.

  4. Avatar Dick says:

    Hmmm, expert on the tech sector and calls it Silicone Valley, not a promising start.

    • Come on, Dick. It’s a typo. All fixed. 🙂

    • Steve Towers Steve Towers says:

      I don’t think Julie is misrepresenting herself as an expert on the tech sector, but rather as a person with some broad-brushed ideas about Redding’s high potential.  My comments are meant as constructive criticism.  I don’t know if I’d vote for her—I’d need a far better understand of where she’s coming from before committing—but I like her positive attitude.

      What I don’t like (as is probably obvious) is the careless use of what I’ll loosely call “data” and the reluctance to accurately site its source.  That raises a red flag for me—among political types of a certain stripe, it often suggests an underlying contempt for rational empiricism and objective analysis of information, in favor of what Stephen Colbert used to call “truthiness.”

      It would be easy enough for Julie to assuage my concern by citing the specific source of her repeated claim that 80% of Shasta County’s start-ups in the last year have been in the tech sector.

  5. Avatar Joanne Lobeski-Snyder says:

    Julie, your article, combined with the comments by other thoughtful, knowledgeable people is great information for me.  No one person has all the answers.  No one person knows everything that is happening with business in Shasta County.  Eighty percent of 50 is 40.  What kinds of startups are these?  How big are they?

    Thank you for a a great article Julie

  6. Avatar cheyenne says:

    I see two obstacles to tech infrastructure in Shasta County.  Heat and expensive utilities.  Heat needs no explanation and according to Sperlings the utilities cost in Redding is 18% higher than the national average.

    What Shasta County has is the outdoors.  The top three of California’s 100 fly fishing streams are in Shasta County.  The hiking trails are rated in the top tier of California trails as is mountain biking.  The affordability is still one of the lowest in the state.  What should be done is attract the retirees.  This will bring in steady money that is new money to the area.  An infrastructure project that would bring in retirees would be a quality golf course by Shingletown.  Get out of the heat from summer.

    Change Redding into a cooler more scenic and affordable option to Palm Springs or Sun City in Arizona.