Overview of West Berkeley Economy: Opportunities and Challenges

Overview of West Berkeley Economy: Opportunities and Challenges Office of Economic Development [email protected] 510-981-2490 West Berkeley Area Plan Goals for Employment Growth (from Preferred Land Use Concept and West Berkeley Area Plan, p. 33) Office and laboratory jobs Retail Jobs Manufacturing Jobs: TOTAL 1,200 1,200 700 3,100 The Plans land use policies were intended to allow at least this amount of employment growth. Private Employment in the 94710 Zip Code

June 1991 & June 2008 1991 1991 2008 2008 Businesses Employees Businesses Employees Sector Agriculture Construction Manufacturing Transportation & Public Utilities Wholesale Trade Retail Trade (inc. restaurants) Finance, Insurance, Real Estate Services Unclassified TOTAL % Change

Employment 9 67 153 34 1,251 5,025 1 61 89 *** 1,089 3,636 -15% -38% 24 100 463 1,488

5 61 100 1,078 -363% -38% 108 2,598 151 2,973 13% 25 258 14 758 160 4,723 67

15,809 45 348 27 788 308 5,498 *** 15,548 48% 14% *** Sectoral employment suppressed for reasons of confidentiality but included in the total Sources: Figures for 1991 from West Berkeley Area Plan, Table 2-1, p. 65; Figures for 2008 from California EDD, Quarterly Census of Employment & Wages, 2 nd quarter 2008 -2% Manufacturing Employment in Berkeley, 1958-2008 9,000 8,000 7,000

6,000 5,000 4,000 3,000 2,000 1,000 0 1958 1963 1967 1972 1977 1982 1987 1991 1992 1996 2000 2001 2002 2007 2008 300 Sources: Economic Census (US Census Bureau): 1958, 1963, 1967, 1972, 1977, 1988, 1987, 1992; 250 Other years- California EDD, Quarterly Census of Employment & Wages Number of Manufacturing Establishments in Berkeley,1958-2008 300 250 200 150 100

50 0 1958 1963 1967 1972 1977 1982 1987 1991 1992 1996 2000 2001 2002 2007 2008 Sources: Economic Census (US Census Bureau): 1958, 1963, 1967, 1972, 1977, 1982, 1987, 1992; other years, California EDD, Quarterly Census of Employment and Wages West Berkeley Employment by Use Category Use Category Heavy Manufacturing Light Manufacturing Offi ce-Based Other Industrial Retail Trade Grand Total 1990 2007 Employees Firms Employees Firms 1,684 31 3,008 61

3,097 266 1,753 130 1,304 232 4,466 604 2,385 310 1,042 171 1,923 272 2,165 323 10,393 1,111 12,434 1,289 % Change 79% -43% 242% -56% 13% 20%

Sources: West Berkeley Area Plan, Table 1-1, p. 25 that used 1990 Berkeley business license data; Data for 2007 compiled by OED from 2007 business license data. Berkeleys Economic Strengths Highly educated workforce Proximity to research institutions Close to sources of capital and entrepreneurship Geographic center of the Bay Area Green policy leadership Educational Attainment Compared to Surrounding Jurisdictions 100.0% 6.78% 90.0% 8.44% 23.61% 20.16% 80.0% 18.10%

70.0% 20.45% 22.89% 60.0% 50.0% 30.93% 23.15% 31.57% 40.0% 30.0% 17.98% 20.0% 35.74% 16.61% 10.0%

14.80% 8.77% 0.0% Berkeley Oakland Richmond Source: 2006 ACS Estimates, Bay Area Census Graduate or Professional Degree Bachelor's Degree Some college or associates degree High School Graduate Less than High School Degree Berkeley Resident Occupations, 2006 Production & transportation

3% Construction & repair 4% Farming, fishing, and forestry 0% Service occupations 10% Sales and office occupations 20% Sources: US Census Bureau Management & professional 63% Average Tax Burden by City Source: Berkeley Economic Development: Attracting University Spin-off Businesses, David Agrawal, Elinor Buchen, Lauren Friedman, Chelsea MacMullan and Lin Tien (2006), p. 37 and Appendix 4

Berkeleys Economic Strengths Highly educated workforce Proximity to research institutions Close to sources of capital and entrepreneurship Geographic center of the Bay Area Green policy leadership UC Berkeley Start-Ups The website for the UC Berkeley Office of Intellectual Property and Industry Research Alliances lists over 100 start-ups that have leveraged UC Berkeley intellectual property rights (patentable inventions and copyrightable software) since the mid-1990s. Of those with known locations: 24 are located in Berkeley 13 are located in other Green Corridor cities 54 are located elsewhere in California 19 are located outside of California (including outside the U.S.) Two-thirds of start-ups are now located outside Green Corridor cities Spin-Off Firms from UC Berkeley and LBNL Diverse but concentrations in: Biofuels, including from innovative sources like algae Green construction materials Bioscience (biopharmaceuticals, drug discovery,

diagnostics) Photovoltaics and other forms of solar energy Nanotechnology UC Berkeley Spin-Off Companies that have Located Outside of the East Bay Green Corridor CNNSuperChip Classification of Start-up firms In NAICS (North American Industrial Classification System), many start-ups are classified in Industry 541710 Research and Development in the Physical, Engineering, and Life Sciences: Establishments primarily engaged in conducting research and experimental development in the physical, engineering or life sciences In the Zoning Ordinance, the likely classification is Laboratories, Commercial Physical or Biological. Allowed as an Other Industrial Use in MU-LI but cannot displace protected Use. Not allowed at all in the M District. Problems with Laboratory Use Category for Start-ups Use allowed as Other Industrial in MU-LI and MM but not M In MU-LI and MM an Other Industrial Use cannot

displace Protected Uses Laboratory Use Category not appropriate for many startups requiring flexible amounts of office and industrial space Berkeleys Economic Strengths Highly educated workforce Proximity to research institutions Close to sources of capital and entrepreneurship Geographic center of the Bay Area Green policy leadership Berkeleys Economic Strengths Highly educated workforce Proximity to research institutions Close to sources of capital and entrepreneurship Geographic center of the Bay Area Green policy leadership Map courtesy of the East Bay EDA Berkeleys Economic Strengths Highly educated workforce Proximity to research institutions Close to sources of capital and entrepreneurship Geographic center of the Bay Area

Green policy leadership East Bay Green Corridor Partnership: UC Berkeley, Lawrence Berkeley National Lab and cities of Oakland, Berkeley, Richmond and Emeryville Regional Map Retaining & Building the East Bays Emerging Green-Tech Economy Research Institutions e.g UC Berkeley, LBNL Local Government Regional Cradle to Scale Strategy Emerging Green Tech Companies

Professional Linkages & Referrals Research Space Needs Land Use Policy Local Consumer Demand (e.g. Berkeley Solar Financing Program) East Bay Green Corridor Partnership Training & Workforce Development Business Assistance

Marketing Regional Retention of Green Industries Presence of Green Suppliers & Services Employment in Emerging Green Jobs GREEN ACADEMY VISION GREEN ENERGY EDUCATION PATHWAYS In the East Bay Green Corridor Education for Environmental Sustainability, Social Justice, and Community Development GREEN ENERGY EMPLOYERS (AND INCUMBENT WORKERS) *Internships *Employment *Apprenticeships * Mentoring GREEN ENERGY AND GREEN BUILDING DESIGN MASTERS & DOCTORAL DEGREES

GREEN ENERGY MANAGEMENT, ENGINEERING, & ARCHITECTURE FOUR-YEAR BACHELOR PROGRAMS CERTIFICATES & TECHNICAL EDUCATION GREEN BUILDING TRADES Labor Union Apprenticeship Programs COMMUNITY COLLEGE PRE-BRIDGE AND BRIDGE PROGRAMS OUTREACH, RECRUITMENT AND ASSESSMENT Large Development Sites ~28.18 Acres University-Driven Local Economic Development: How to Birth, Catch & Keep (Green) Start-ups City of Berkeley Planning Commission February 2009 Michael Cohen UC Berkeley Office of IP & Industry Research Alliances

[email protected] 510-643-7201 01/29/20 Agenda: ~7 Minute Presentation Highlight Opportunity Summarize 4 Paths for Commercializing Research Discuss 4 Steps of Locating in Community Page 27 01/29/20 Opportunity: Start-up Pipeline In most years, 10-20 start-ups based on UCB / LBL innovations In FY08, over 18* start-ups based on UCB / LBL innovations At least 11 were green tech

o Now, at least 3 currently located in the 4 EBGC cities o At least 6 were located in EBGC, but 3 moved.. Many communities dream of this econ dev pipeline Establish programs & protocols to attract & retain start-ups Encourage facilities to attract & retain emerging growth companies * This number is comprised of the start-ups that licensed IP from UCB or LBL; The number doesnt include other UCB or LBL spin-outs that didnt license IP, nor does it include established companies that licensed IP from UCB or LBL. Page 28 01/29/20 Opportunity: Start-up Econ Dev Models

Page 29 Commercializing: 4 Paths Out of Research High Milked Pull Systematically out of research by corporate collaborators Mined The extent that companies drive the transition from research to product Morphed Opportunistically by entrepreneurs (e.g. MBA students) that periodically scour campus Organically out of research by team member(s)

Marketed Low Low Push Methodically to industry by campus (e.g. PI, PR, IPMO, etc) High The extent that universities drive the transition from research to product Page 30 Commercializing: Morphed, Mined, Milked, Marketed Examples: Amyris, Calimetrics, CaliSolar, CellASIC, Chiron, Excellin, GoodGuide (TaoIt), Harmonic Devices, Inktomi, Integrated Diag, IntelliOne, Kalinex, Lumiphore, Mercator Med (EndoBionics), MicroClimates (Aptility), MicroFluiDX, OnWafer, ON Diagnostics, PhotoSwitch Bioscience, Redwood Bioscience,

SiClocks, TheraFuse, Urban Scan, Verimetra Med, Wireless Industrial Tech, Dust Networks, Iris AO, SiTime High Pull Morphed Low Drivers: Organically out of research by team member(s) Low Push High Great Research Entrepreneurial culture & eco-system IP: Some obtain exclusive license to improve biz plan & attract investors

Some ignore or abscond with IP Page 31 Commercializing: Morphed, Mined, Milked, Marketed High Pull Low Mined Examples: Adura Tech, Aurora Biofuels, CommandCAD, Euclid Media, Fluxion Biosystems, MediFuel, NanoRay, nanoPrint Drivers: Great Research MBAs, Biz plan comp, OTL mrktg Opportunistically by entrepreneurs IP: (e.g. MBA students) Many obtain exclusive license to that periodically scour campus

improve biz plan & attract investors Some ignore or abscond with IP Low High Push Comments: Pathway with highest growth rate MBAs are the campuss EIRs Page 32 Commercializing: Morphed, Mined, Milked, Marketed High Milked Pull Systematically out of research by corporate research sponsor Examples (that licensed IP): Analog Devices, Ecoprene (XL Tech), Google, Honeywell, Intel, Berkeley Bionics (first morphed then milked)

Drivers: Great sponsored research with optimized terms (i.e. 1st access, NERF, open source, etc) Off-campus corporate labs (i.e. BWRC, Intel, Cadence, Yahoo, Starkey, etc) IP: Low Low Push High Some jointly own IP Some obtain a license to legally use IP or thwart competitors Some ignore or abscond with IP Page 33 Commercializing: Morphed, Mined, Milked, Marketed Examples: Arkal Medical, Cisco, ClimateCooler, FuelFX, Luminus Devices, Honeywell, Microchip Biotech, Renovis, Silicon Basis,

Solexel, Vitesse, 3M Drivers: High Pull Great Research Marketing (i.e. IP Licensing offices, University PR Methodically to industry programs, Faculty pubs & ppts, Patent pubs, etc) by campus faculty & staff (e.g. PI, PR, OTL) IP: Marketed Low Low Push High Most obtain exclusive license to stay legal, improve BP, attract investment, or

thwart competitors Some ignore IP or abscond with IP Comments: Didnt get morphed, milked or mined because tech or market too nascent when invented Page 34 01/29/20 Locating: 4 Steps* Into Community * Simplified Model Virtual Step (Dorm, Apt, Cafe, Libe, etc) Baby Step (Free space: Incubator, Garage, etc) Big Step

(Pay for space) Big Leap (Pay for space with growth) Locating into the Community Page 35 01/29/20 Locating: Competitive Attributes Cost Capacity (appropriate space) Capital (easy access to VC) Change (inertia of relocating) Coolness

(of space & hood) Customers (proximity / density) Credibility (proximity to known corps) Colleagues (recruiting, support services) Commute (finish degree/relocate) Collaboration (with UCB people) Virtual Step (Dorm, Apt, Cafe, Libe, etc)

Baby Step (Free space: Incubator, Garage, etc) Big Step (Pay for space) Big Leap (Pay for space with growth) Locating into the Community Page 36 01/29/20 Locating: Baby Step Cost Capacity (appropriate space) Capital

(easy access to VC) Change (inertia of relocating) Coolness (of space & hood) Customers (proximity / density) Credibility (proximity to known corps) Colleagues (recruiting, support services) Commute (finish degree/relocate) Collaboration

(with UCB people) Leverage these existing advantages Virtual Step (Dorm, Apt, Cafe, Libe, etc) Berkeley (campus vicinity) Baby Step (Free space: Incubator, Garage, etc) Locating into the Community Page 37 01/29/20 Locating: Big Step Cost

Capacity (appropriate space) Capital (easy access to VC) Change (inertia of relocating) Coolness (of space & hood) Customers (proximity / density) Credibility Establish these potential advantages EBGC

(including Berkeley) (proximity to known corps) Colleagues (recruiting, support services) Commute (finish degree/relocate) Collaboration (with UCB people) Leverage these existing advantages Virtual Step (Dorm, Apt, Cafe, Libe, etc) Berkeley

(campus vicinity) Baby Step (Free space: Incubator, Garage, etc) Big Step (Pay for space) Locating into the Community Page 38 01/29/20 Locating: Big Leap Cost Capacity (appropriate space) Capital (easy access to VC) Change

Cant expect advantages with these attributes, Bay Area & beyond but need to be competitive with alternatives especially The only way to establish an advantage is to be the incumbent & minimize CHANGE (inertia of relocating) Coolness (of space & hood) Customers (proximity / density) Credibility Establish these potential advantages EBGC (including Berkeley)

San Francisco & Silicon Valley; but including EBGC (proximity to known corps) Colleagues (recruiting, support services) Commute (finish degree/relocate) Collaboration (with UCB people) Leverage these existing advantages Virtual Step (Dorm, Apt, Cafe, Libe, etc)

Berkeley (campus vicinity) Baby Step (Free space: Incubator, Garage, etc) Big Step (Pay for space) Big Leap (Pay for space with growth) Locating into the Community Page 39 01/29/20 University-Driven Local Economic Development Michael Cohen

UC Berkeley, Office of Intellectual Property & Industry Research Alliances (IPIRA) [email protected] IPIRA.Berkeley.edu 510-643-7201 Page 40 The Aquatic Park Commute Shed is Wealthy & Educated Within a 45 Minute Commute Midlife Success (79) Inco m e

Y1 Young Achievers (294) Y2 Accumulated Wealth (74) Affluent Empty Nests (280) F1 M1 Young Accumulators (137) F2 Conservative Classics (117) Mainstream Families (29)

Cautious Couples (28) M2 M3 F3 Striving Singles (6) Y3 Younger Sustaining Families (66) Sustaining Seniors (55) F4 Family M4

Mature Five County Bay Area Industry Size, Growth & Concentration 25% 5 County Quad 20% Construction 15% Education and Health Services Financial Activities 10% Government Information 5% Leisure and Hospitality 0%

-0.20 0.00 -5% -10% -15% -20% 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60

1.80 Manufacturing Natural Resources and Mining Other Services (except Public Administration) Professional and Business Services Trade, Transportation, and Utilities

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