San Francisco

Business Retention and Expansion Plan

Phakhini Charukamnerdkanok

ED 765 Business Retention & Expansion Dr. Brian Richard May 3, 2008

Index
page Introduction Exclusive summery City situation Demographic How consideration in demographic is important San Francisco demographic situation Quality of life How consideration in quality of life is important San Francisco quality of life situation Workforce and education How consideration in workforce and education is important San Francisco workforce and education situation Business climate How consideration in business climate is important San Francisco Business climate situation Supporting Service and infrastructure How consideration in supporting services and infrastructure is important San Francisco supporting service situation Global business fostered How consideration in Global business fostered is important San Francisco Global business fostered situation SWOT Analysis S – Strengths W – Weaknesses O – Opportunities T – Threats Action Plan I: workforce and training development II: Service, infrastructure, and technical resources for emerging businesses III: Reach global business IV: Create climate that fosters business retention V: Increase city involvement and regional cooperation VI: Encourage local trade and consumption Evaluation Conclusion 1 1 1 1 1 2 2 2 2 2 3 3 4 4 4 4 4 4 5 5 5 5 5 6 6 6 6 6 6 7 7 7 7 8 8

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San Francisco

Business Retention and Expansion Plan

Exclusive Summery Through this outreach processes, San Francisco Economic Development Organization was tasked with formulating an implementation plan regarding the top community need, that is to expand and retain existing businesses in the city of San Francisco. The area of development focuses on improving of entrepreneurial supports which include workforce and training, service, infrastructure, and technical resources for emerging businesses. Other areas such as reaching global business, creating climate that fosters business retention, increasing city involvement and regional cooperation, and encouraging local trade and consumption must be included in this process.

Introduction This BR&E Plan represents the program of work for San Francisco. It brings together in one document the projects, programs and services. These programs share the common goals of economic development, community promotion, and service to businesses retention and expansion of San Francisco. In order to address a plan to retain and expand businesses must be able to understand and identify the problem. (IEDC, 2006) In this paper is beginning with city situation which included how important of each economic development factor that was identified as a problem of businesses in San Francisco. This strategic plan contains the following key sections: Current Assessment: An overview of San Francisco situation SWOT Analysis Action Plan Performance measurements Conclusion

Current Assessment: City Situation Demographic How consideration in demographic is important The population growth is often used as a top line observation on a community’s vitality and competitive success. Companies typically desire to be in growing

2 communities, or communities that have the lifestyle amenities that will allow them to relocate their best employees. San Francisco demographic situation San Francisco is a big city with a population 744,041 people since 2006. San Francisco had a positive net increase in population, but the population growth is slight. San Francisco is one of the most ethnically and culturally diverse populations. For people reporting one race alone, 55 percent was White; 7 percent was Black or African American; less than 0.5 percent was American Indian and Alaska Native; 33 percent was Asian; less than 0.5 percent was Native Hawaiian and Other Pacific Islander and 5 percent was some other race. Three percent reported two or more races. Fourteen percent of the people in San Francisco city were Hispanic. Quality of life How consideration in quality of life is important Some contexts such as crime rate, housing cost, education, and cultural assets, could be used to measure the population’s quality of life. Businesses would consider to relocate or expand their businesses in place that have a good quality of life. Strategic plan should address to enhance the quality of life as a goal in order to retain and expand business. San Francisco quality of life situation In 2006, San Francisco city had 323,000 occupied housing units - 127,000 (39 percent) owner occupied and 196,000 (61 percent) renter occupied. Four percent of the households did not have telephone service and 29 percent of the households did not have access to a car, truck, or van for private use. Twenty-one percent had two vehicles and another 8 percent had three or more. From this point would lead the frame of idea to the vital of public transportations. The median monthly housing costs for mortgaged owners was 2,864 dollars, nonmortgaged owners 464 dollars, and renters 1,174 dollars. Fifty-one percent of owners with mortgages, 17 percent of owners without mortgages, and 43 percent of renters in San Francisco city spent 30 percent or more of household income on housing. The median income of households in San Francisco city was 65,497 dollars. Eighty percent of the households received earnings and 11 percent received retirement income other than Social Security. Twenty-two percent of the households received Social Security. The average income from Social Security was 12,936 dollars. These income sources are not mutually exclusive; that is, some households received income from more than one source. Workforce and education

3 How consideration in workforce and education is important Education and skills are important determinants of the employability and income potential of workers. The productivity of labor is a function of the technical skills the employee has acquired. As the value of strong minds and knowledge increases, employers will seek skilled and educated workers. The demand for education and workforce training thus increases. San Francisco workforce and education situation In the area of San Francisco city, there are several public universities such as Stanford University and University of California, San Francisco. UCSF is a nation’s premier health sciences teaching, training and research centers and a world leader in advancing new techniques. UCSF is the second-largest employer in San Francisco who receives more than $500 million in federal research grants each year. In addition to a 2,700member student body, UCSF has 800 postdoctoral scholars pursuing research training. And also there are 18 private educational institutes which are expertise in a variety of industrial category that can provide difference kind of training programs to San Francisco labor force. Through the stable number of businesses in San Francisco that there are 66,706 businesses in 2001 and 69,695 in year 2006, that increased only 4.58%. According to the U.S. Department of Labor, San Francisco’s diverse and educated population results in one of the most productive workforces in the country and the world. San Francisco has a high rate of educated population, 84.9% of adults are high school graduates and 50.4 percent of adults got college degrees or higher. High number of high educational population would enhance trend of business growth via potential of workers. In addition, San Francisco has a high labor force base, 63 percent of population is between 20-54 years of age (median: 39.4). The city’s resident labor force is 433,000, with another 590,500 workers commuting to the city each day. With a total daily work force of more than 1 million, San Francisco businesses can select employees from a large scale of qualified workers. In order to drive 69,695 businesses in the city to be retained and expanded; therefore, potential worker and labor force base should be addressed to be crucial factors.
2001 RETAIL TRADE TRANSPORTATION AND WAREHOUSING INFORMATION FINANCE AND INSURANCE REAL ESTATE AND RENTAL AND LEASING SERVICES Total 6,955 1,149 2,066 3,889 3,198 47,448 66,706 2002 6,724 1,117 1,873 3,891 3,222 48,557 67,386 2003 6,523 1,084 1,637 3,918 3,241 49,279 67,85 2004 6,428 1,069 1,526 3,860 3,194 49,765 67,846 2005 6,248 1,023 1,444 3,788 3,220 49,615 67,343 2006 6,332 1,011 1,497 3,950 3,343 51,556 69,695

Table 1: Number of business in San Francisco 2001-2006

4 Business climate How consideration in business climate is important According to Scott (1997), the business climate data would help the reader to better understand the processes of cluster and benefit of businesses cooperation--by better understanding the type of businesses which located in the community. San Francisco Business climate situation San Francisco is home to many large and well-known organizations – including Wells Fargo, Gap Inc.,The Charles Schwab Corporation, Levi Strauss & Co., Lucas film Ltd., VISA U.S.A., Providian Financial, SBC Pacific Bell, PG&E Corporation and others – it also has more than 10,000 of small- and medium-sized businesses. More than 95 percent of all businesses in San Francisco employ 50 employees or less, making small business is the lifeblood of the city’s economy. In order to support the creation and growth of midsize and small size businesses, the city of San Francisco provided a range of services such as one-stop shop for businesses and SFWorks( customize training program) Supporting Service and infrastructure How consideration in supporting services and infrastructure is important According to Kvotsai T., the essential economic foundations which entrepreneurs would consider are accessible technology, available capital, advance capital, and infrastructure. Most businesses would be unable to thrive without access to good transportation system for shipping in raw materials from suppliers and goods to their customers. Supporting services is a way to keep the existing businesses in the community. In pursuing a business retention and expansion strategy, an Economic development organization would use many of the same economic development tools which include providing services that are used in business attraction or recruitment program (IEDC, 2006, P.6). Current number of providing could be showed as a prediction of services that will be available in the future. Availability of services and infrastructure is a main factor which entrepreneurs consider to relocate their businesses. San Francisco supporting service situation San Francisco has the most complete public transportation system of any Bay Area city. A higher percentage of San Francisco residents; 30.2 percents use public transportation than the rest of the state around 5 percents. A 1.5 billion dollars new Bay Area Rapid Transit (BART) station connects trains to the heart of San Francisco and the East Bay, and an intra-airport rail system links airport terminals and facilities together. San Francisco is investing in the future of its transportation system to ensure that businesses continue to find it easy to attract employees and deliver goods and services.

5 For venture capital, San Francisco is the largest investment community in the United States. Research sponsored by government and private sectors brings billions of dollars to the region’s economy each year. In addition, San Francisco’s economic activity attracts and supports a range of industries. It is the base for some of the nation’s largest banks, more than 30 international financial institutions and the Pacific Exchange. Moreover, San Francisco businesses are provided a convention facility, Moscone Center, is centrally located in the bustling and vibrant South of Market neighborhood adjacent to the Financial District and Union Square, and within walking distance of nearly 20,000 hotel rooms to meet the needs of dynamic industries in San Francisco. Through the large investment San Francisco has made. They has prepared for a future infrastructure to support the local businesses. Global business fostered How consideration in Global business fostered is important Helping firms fine market is an important goal to bring dollars into the area rather than to simply re-circulate existing dollar. This is done by exporting the product and services of companies to markets.(IEDC, 2006) San Francisco Global business fostered situation San Francisco located halfway between London and Tokyo and between Seattle and San Diego, so San Francisco is at the center of global business. There are more than 62 cruises called at the Port of San Francisco in 2003 and 110,000 passengers passed through the Port in 2003. The total annual trade through the Port of San Francisco is more than 72 billion dollars. The San Francisco International Airport is the ninth largest airport in the United States and the fourteenth largest in the world. San Francisco has nearly completed a 2.4-billion dollar program to build an airport. New parking lots, a consolidated rental car center and other amenities make business travel comfortable as well as convenient.

SWOT Analysis S – Strengths Highly educated labor force. Education attainment is spread fairly Community is served by rail line. San Francisco has 9th-largest airport in the United States

6 San Francisco is served advance-technology educational infrastructure by Stanford and University of California Broadband internet access available in community Good quality of life W – Weaknesses Median wage rate for manufacturing and services are higher than state of California’s wage rated. Limited land available for businesses wishing to expand. High price of land High housing cost compare with national affordability index A variety of culture and language. O – Opportunities The key industries are growing T – Threats High Competition in each key industry cluster High energy cost (one of the highest tax rate of energy)

Action Plan I: workforce and training development 1.a) Promote workforce development through coordination of K-16 educational programs with higher education, advance training, and the need of San Francisco industry clusters and businesses Hi-tech Workforce and Innovative Training program Provide workforce and training to Latin and other non-English speaking population Latino and non-English speaker training program o English language programs and promote availability of the programs in a culturally sensitive manner

1.b)

II: Service, infrastructure, and technical resources for emerging businesses 6.a) Provide services to existing business include: professional, affordable work spaces and facility experienced business advisors; legal, management, venture capital, and tax advice Business library resources

7 Employment services; training, recruitment and pre-screening of job applicants Technical assistance for operational improvement Business security system III: Reach global business 3.a) Sponsor and promote participation in national and international trade show that bring awareness for doing business in San Francisco Publish quarterly ED periodical. Being trade show sponsor Assist business to register trade show participation Export and import assistance Helping business identify alternative distribution networks, and export production services to help firms identify potential international markets that can assist in their international trade goals. Provide international market information Help them to match to appropriate supplier and the best quality of merchandise

3.b)

IV: Create climate that fosters business retention 4.a) Integrate transport planning around major arterial roads and fixed rail, cable car, and bus public transport routes and provide a safe, efficient and sustainable traffic and car parking system to meet the transport needs of the city.

V: Increase city involvement and regional cooperation 5.a) Involve local business and industry clusters1 in identifying interests and opportunities for partnerships to implement San Francisco’s economic development program. Zoning program High-Tech district Downtown business zone

5.b)

VI: Encourage local trade and consumption 6.a) Encourage local investment opportunity and promote “Buy Local” for goods and services : local event Fisherman Wharf Festival

According to Porter M., firms tend to cluster geographically into production networks and systems. They find it advantageous to be near other firms and produce similar goods. So, that they can transact business more readily and at lower cost

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8 Cerebration of 50 years San Francisco China town Downtown Shopping Spree Day Evaluation: year to year trend line comparison • • • • • • • Number of existing business Number of participation in each program Number of accesses the website Number of people who register to get periodical Number of attendants who graduate from these program Percent of benefit that increase in each cluster Percent of city’s export value

Conclusion It is essential that San Francisco move forward to implement this plan. They must improve the city’s business climate. Investment in transportation infrastructure must remain a top priority for the city. Educate the future workforce, provide higher quality of life, and build the infrastructure that is needed now and for the future are the key role of economic development organization. Looking forward, expansible businesses will face challenges of higher cost, especially impacts of the high costs of energy. With this plan as its guide, San Francisco is poised to meet tomorrow’s challenges today.

References

Employment Development Department(EDD). Retrieved, May 1, 2008; http://www.labormarketinfo.edd.ca.gov/cgi/databrowsing/?PAGEID=4&SUBID= 111 International Economic Development Council, Business Retention and Expansion. 2006. pp. 10 & 99 Kvotsai Tomliou. Handbook of economic development. pp.197-198. Labor Market Info. Retrieved; April 25, 2008; http://www.calmis.cahwnet.gov/htmlfile /msa/sf.htm Metropolitan Transportation commission. Retrieved; May 2, 2008; http://www. mtc.ca.gov/maps_and_data/datamart/stats/cardmile.htm San Francisco Business Times, Retrieved; May 4, 2008; http://sanfrancisco.bizjournals.c om/sanfrancisco/ San Francisco city data. Retrieved; April 27, 2008; http://www.city-data.com/county /San_Francisco_County-CA.html\ San Francisco Economic Development. Retrieved April 23; http://www.sfced.or g/infrastructure.htm San Francisco Economic Development. Retrieved April 23; http://www.sfced.or g/living.htm San Francisco Economic Development. Retrieved April 23; http://www.sfced.o rg/talent.htm San Francisco Prospector. retrieved, May 1,2008; http://www.sfprospector.com/site /sfprospector_index.asp San Francisco Public library. Demographic and Economic Statistics Entire City of San Francisco. Retrieved, April 28,2008; http://sfpl.org/librarylocations/main/gic/en tirecity.htm San Francisco’s SF prospector. Retrieved; April 26, 2008; http://gispub02.sfgov.org/web site/sfprospector/ed.asp?cmd=start2&nvis=ncor&bhiw=1259&bhih=631 Scott L., Guidelines for Research Reports in Business Retention and Expansion Programs.Economic Development Review. 1997 United states fact sheet. US census Bureau. Retrieved; April 24, 2008; http://factfinder. census.gov/servlet/ACSSAFFFacts?_event=&geo_id=01000US&_geoContext=0 1000US&_street=&_county=&_cityTown=&_state=&_zip=&_lang=en&_sse=on &ActiveGeoDiv=&_useEV=&pctxt=fph&pgsl=010&_submenuId=factsheet_1&d s_name=DEC_2000_SAFF&_ci_nbr=null&qr_name=null&reg=&_keyword=&_i ndustry=

US Census Bureau. Retrieved April 23; http://factfinder.census.gov/servlet/ADP Table?_bm=y&-geo_id=16000US0667000&-qr_name=ACS_2006_EST_G00 _DP2&-ds_name=&-_lang=en&-redoLog=false

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