Innovating the Green Economy in California Regions
California Regions A study funded by the U.S. Economic Development Administration
with
ith match
t h provided
id d b
by:
MacArthur Foundation,
UC Berkeley Department of City & Regional Planning,
Fisher Center for Real Estate and Urban Economics,
Berkeley
y Program
g
on Housing
g and Urban Policy
y
Professor Karen Chapple, Associate Professor, City & Regional Planning
with Prof. Malo Hutson, Prof. AnnaLee Saxenian, Dr. Cynthia Kroll, Dr. Larry Rosenthal, Dr. T. William Lester, Emilio Martinez de Velasco, Ana Mileva h l
illi
ili
i
d
l
il
Sergio Montero, Anita Roth, and Laura Wiles
and the students from City Planning 228/268 Innovating the Green Economy Studio
i
h G
S di
Policy &
Regulation
Regional innovation systems
Local markets
Innovation
Job growth
Study Data
Study Data
• California
• Measuring the green economy
– National Establishment Time Series (NETS)
N ti
l E t bli h
t Ti
S i (NETS)
• E‐mail/mail/phone survey of green, traditional, and toxic release inventory businesses (Sample = 6600, N=649)
• 100 interviews in six California regions
y (
)
• Network analysis (UCINET software)
Product vs. Process Innovation
Product vs. Process Innovation
100%
Product/Service
Process
90%
80%
Innovattion Type
70%
60%
50%
40%
30%
20%
10%
0%
Green Businesses
Traditional
Businesses
TRI Businesses
Product innovation
Survey results:
Primary market type
k
70%
Private Firms
60%
Private Households
Local Government
Share of firms
50%
Other Public Sector
40%
30%
20%
10%
0%
Green Businesses
Traditional Businesses
TRI Businesses
Survey results:
Primary market location
k l
60%
Within Your City or Region
Throughout California
Throughout the Country
Throughout the World
Share of Firms
50%
40%
30%
20%
10%
0%
Green Businesses
Traditional
Businesses
TRI Businesses
Survey results:
Perceptions of policy and regulation
f l
d
l
70%
60%
Share off Firms
50%
40%
Positive
N
Negative
ti
Impact Not specified
30%
20%
10%
0%
Green Businesses
Traditional
Businesses
TRI Businesses
Survey results:
Policy impact by level
l
b l l
90%
Federal
State
Local
80%
70%
Share of Firms
60%
50%
40%
30%
20%
10%
0%
Green Businesses
Traditional Businesses
TRI Businesses
Survey results:
y/
y
g
Weekly/monthly interactions with organizations
Regression findings
Regression findings
• What predicts product innovation?
What predicts product innovation?
– Greater embeddedness in local markets – Manufacturing or architecture, engineering and Manufacturing or architecture engineering and
design firms
• What predicts process innovation?
What predicts process innovation?
– Older firms
– “Policy shock” of AB32 and environmental “P li h k” f AB32 d
i
t l
regulation
• Regions matter, but which region doesn’t.
R i
tt b t hi h
i d
’t
Measuring Innovation: g
Green Innovation Index
• Idea generation – patents
• Idea development
– VC, SBIR/STTR grants, startups
• Commercialization
– gazelles
Higher
Explaining Regional Trajectories
LA
East Bay
Silicon Valley
Green
n Innovation R
Ranking San Diego County
San Francisco‐San Mateo‐
Marin
Orange County
Sacramento County
Riverside‐San Bernardino
Bakersfield
SD
Upper San Joaquin Valley
Lowe
r
Size of bubble =
2007 employment
l
t
‐4.0%
4 0%
‐2.0%
2 0%
0 0%
0.0%
2 0%
2.0%
4 0%
4.0%
Annual Avg. Growth Rate of Green Jobs, 1990‐2007
6 0%
6.0%
8 0%
8.0%
Green business interaction networks by region
The Silicon Valley Green Network
The Silicon Valley Green Network
The Silicon Valley Green Network
Expats from Silicon Valley in its related industries, the semiconductor and the biotech industry being the two most d
d h b
h d
b
h
relevant…are adapting their talent, both personal and network talent, to a fluffy mix of ideas that are coming in the clean tech
clean tech
‐‐ Silicon Valley Venture Capitalist
If you’re going to be successful in the green industry you need to understand the regulations and policies that are affecting the industry from a public policy standpoint, you know, utilities, regulations etc So this is a tricky industry it’ss not like regulations, etc. So this is a tricky industry… it
not like
starting a dot.com or something, it needs an understanding of a more complicated regulatory environment.
‐‐ Silicon Valley Consulting Firm
Silicon Valley Consulting Firm
But what about distressed regions? The case of the Inland Empire
h
f h l d
Reorganizing the Inland Empire’s economy
• AB32 is kind of what got the ball rolling here in San Bernardino County. We were the first county to get sued because of AB32. .. • San Bernardino County official
The East Bay Green Network
But the East Bay gets a d
disproportionate share of patents…
h
f
60%
% of State Patents
% of Cleantech Patents
50%
40%
30%
20%
10%
0%
Silicon Valley
East Bay
And green gazelles as well.
And green gazelles as well.
12%
% of State Gazelles
% of Green Gazelles
10%
8%
6%
4%
2%
0%
Silicon Valley
East Bay
Conclusion
• Both
Both green and traditional firms are green and traditional firms are
innovating green products and processes;
• Green businesses rely on local markets and Green businesses rely on local markets and
business networks;
• Green businesses see public policy and G
b i
bli
li
d
regulation as positive; • Green businesses are committed to staying in California.
Policy Implications
Policy Implications
• Traditional innovation policy
p y
– Talent, R&D Investment, Infrastructure
– System manager
• Green innovation policy
– Regulation
– Standards
– Grow market
• Tax incentives (households)
• Procurement
– Network “manager”
– (R&D)