And it doesn’t involve getting tech businesses to move here. Finding tech applications with the businesses that are already here, especially logistics, is a better approach, the study claims.
While it will never resemble Silicon Valley, the Inland Empire should be able to attract more tech jobs if it takes the proper approach to doing so, according to a recent study by the UC Riverside School of Business Center for Economic Forecasting and Development.
The report, which is based on 2017 data, concludes that Riversides and San Bernardino counties would have limited success if they try to attract tech businesses from outside the area to locate here.
Instead, Inland economic leaders should pursue potential “synergies” between tech jobs and the region’s established industries, particularly logistics, green technology and e-commerce, said Robert Kleinhenz, the forecasting center’s executive director and one of the report’s authors.
“What we’re recommending is that we piggyback on the industries that are established here and that are strong performers,” Kleinhenz said. “There’s no reason to try to get a lot of [tech] businesses to come here that might not fit into the local economy. We should be looking for synergies.”
The 13-page Tech Industry in the Inland Empire admits that its approach to getting more tech jobs might not sit well with the people who are working to bring tech jobs to the area, but claims its recommendation doesn’t reflect reality.
“The workforce, infrastructure, venture capital and other resources that are required for successful launches of tech enterprises are only beginning to coalesce in the Inland Empire,” the report states its its introduction.
The “piggybacking” approach is similar to economic development agencies that, rather than trying to attract new businesses, focus on expanding, or otherwise enhancing, the businesses they already have. Though not as flashy as persuading a major employer to move, that approach can be an effective way to attract businesses and grow a local economy.
Not that the Inland region is without tech businesses. It has its share of green technology and it’s headquarters to Esri, the Redlands company that designs and manufactures geographic information system (GIS) software for public and private-sector clients worldwide.
Kleinhenz also cited the Riverside Economic Development Agency as one local entity that helped make that happen.
“We are strong in green technology and e-communications,” Kleinhenz said. “And Riverside has done a very good job getting out ahead on creating tech jobs.”
But tech-related businesses — a broad category that includes computer product manufacturing, e-commerce, software publishing, telecommunications and graphic design – account for only two percent of the Inland region’s job base, or approximately 2,100 companies.
To put those numbers in context, tech jobs make up nearly five percent of the national employment base and about seven percent of California’s job count.
The report also found that the bulk of the Inland region’s tech jobs – 27.3 percent – are in the e-markets, agents and brokers sector, compared with 21.3 percent in California. The report also noted that employment in a few tech categories, including telecommunications and computer and electronic product manufacturing, has declined in Riverside and San Bernardino counties since 2011.
Still, the time is ripe to get more tech businesses in the Inland Empire. The local economy is strong and shows no sign of slowing down, venture capital is beginning to find its way into the market – an estimated $10.6 million last year – and several technology incubators and accelerators are active within the region.
Working with existing businesses makes sense, but there’s also nothing wrong with nabbing a new tech business if one comes available, said Sandra Sisco, economic development director at the InTech Learning Center at Chaffey College.
“I don’t see why we can’t take both approaches,” Sisco said. “We should get any new tech businesses that we can. We don’t want to miss any trends.”
One local economist is endorsing the business center’s approach to getting more tech businesses in the Inland Empire.
“When tech companies grow they want to merge and find other tech companies to grow with, which is why this is the right approach,” said Jay Prag, professor of economics and finance at the Drucker School of Management at Claremont Graduate University. “It’s also difficult to get people to move, because you’re asking them to change their mind. If you’re in the Bay Area and someone asks you to come to Riverside, that might not seem like a good move.”
Tech jobs are attractive because they pay well, and they don’t necessary require a lot of trading to perform them.
“You don’t necessarily need a college degree,” Prag said. “Usually, you just need a little tech savvy and be willing to work hard. A lot of logistics jobs are really low-tech.”
Local officials are likely to follow the report’s advice, Prag said.
“I think they’ll like it because it’s something they can afford to do.” Prag said. “It doesn’t say ‘go out and spend a lot of money,’ it says ‘go out add to what you already have.’ They’ll do that because they know it will work.”