Goal: Diversify Business Clusters
About 71% of Diversification Goals are completed or ongoing.
Measure of Success
- Target Cluster Employment
- Small Business Startups
- Woman- & Minority-Owned Businesses County Average Wage
- Income Disparities
- eCommerce Sales
- Capital Investment
Collective Impact Partners
- Sonoma County EDB
- Local Cities
- Local Chambers of Commerce
- Private Employers
- Napa-Sonoma Small Business Development Center
- Local Banks & Credit Unions
- Workforce Investment Board
- Sonoma State University
- Santa Rosa Junior College
- Public & Private California Universities
Objective: Sonoma County’s economy is resilient – with support for small businesses, a diverse industry base, and career opportunities for all residents.
Since the recession, Sonoma County employers created jobs faster than the United States and nearly all Strategic Sonoma benchmarks. Growth occurred across industries and revealed strong existing clusters in agriculture, manufacturing, healthcare, and hospitality. With unemployment now below 3% and housing unavailable, growing employment will be an increasing challenge for many local employers. To stay competitive in the current environment, businesses must instead focus on growing their operations through innovation, adoption of new technologies, and diversification of their service and product offerings.
Strategic Sonoma identified six target clusters for Sonoma County. These targets include existing business operations and those with potential for increased diversification – taking advantage of new opportunities created by technological advancement, consumer preferences, demographic change, and new legislation. Some of these business clusters will grow naturally, but through collective action, Sonoma County partners can support existing businesses as they adapt to the modern economy and encourage innovation and entrepreneurship.
- The EDB currently operates initiatives focused on a number of industry clusters like Agriculture, Cannabis, Craft Beverages, Creative Sonoma, Outdoor Recreation, and Specialty Food. The EDB should create at least two additional industry groups to facilitate local businesses as they work to address common issues around workforce, innovation, and adoption of technology. A Sonoma County AgTech Innovation Cluster would be a county-wide, multi-agency program to connect farmers with grants, technology, and other assistance in adopting precision agriculture practices. A Sonoma County Manufacturing Alliance would similarly bring together local manufacturers to pinpoint shared needs and exchange ideas.
- The EDB should continue to conduct regular Business Retention & Expansion (BRE) activities through a systematic approach that meets with local businesses and discusses their operations and needs. Meeting with local businesses should be used to help identify resources to support their needs, celebrate their success, and connect them with strategic initiatives. Local Cities and chambers of commerce that conduct similar BRE meetings should be encourage to share their reports with the EDB on a regular basis so that the EDB can prepare an annual report on all BRE activity in the county.
- Through the EDB, Napa-Sonoma Small Business Development Center (SBDC), and local banks and credit unions, Sonoma County should continue to facilitate financing and entrepreneurial support programs, including the Sonoma County Impact Loan Fund, Small Business Administration (SBA) loans, and other resources. These partners and local leaders should explore the feasibility of creating a revolving fund focused on specific strategic objectives, such as assisting businesses with purchasing and adopting new technology. Partners should proactively market the availability of financial resources – especially to minorities, women, and disadvantaged groups and geographies.
- The EDB should conduct a feasibility study for a research and development (R&D) center focused on sustainable applied technologies in target clusters. This could be a collaborative R&D center that includes private employers, regional public and private university system researchers, and entrepreneurial leaders. The goal would be to provide a proving ground to test new technologies in areas like AgTech, Outdoor Products, Additive Manufacturing, Healthcare, and more.
- As Sonoma County focuses on critical housing needs, commercial space cannot be forgotten. Local businesses need modern, utility-served warehouse, office, and flex space to expand as they modernize and grow their operations. The EDB should facilitate a gap analysis of commercial real estate in Sonoma County – seeking to develop an inventory of constructed properties and land zoned for commercial use while surveying existing businesses to understand their needs. This analysis would benefit County and City planners as they review comprehensive plans in the future and prioritize certain areas for commercial construction and redevelopment. New commercial corridors should be planned in areas with minimal environmental impact that are near transportation and mixed-income housing to support related goals around mobility.
- The WIB, Sonoma State University, Santa Rosa Junior College, Empire College, and the EDB should work with local businesses to develop programs that prepare businesses for the future. The partners can use the BRE program and surveys to identify specific needs of the business community and develop tailored training sessions that focus on priority topics such as adoption of new technologies, utilization of eCommerce tools to sell products online, and upskilling of existing workers to increase productivity.
Best Practice – Business Diversification
Georgia Manufacturing Extension Partnership – Helping Companies Embrace Automation
The Georgia Manufacturing Extension Partnership (GaMEP) is part of Georgia Tech’s Enterprise Innovation Institute and has locations in nine regions across the state. GaMEP is a federally funded organization, making it more cost effective for small manufacturing businesses compared to traditional consulting, and uses resources from Georgia Tech to assist companies.
The purpose of GaMEP is to coach and educate manufacturing companies in order to reduce bottom line costs and increase productivity. Part of their coaching includes helping companies adapt to and embrace automation in the manufacturing industry.
GaMEP has been outspoken about the benefits of automation – pointing out that technology can help ease labor challenges faced by businesses and that as jobs are displaced by automation, new jobs are created. A recent study by Deloitte found that while automation eliminated 800,000 jobs, it created 3,500,000 new positions that paid on average $13,000 more than those they replaced. The Director of GaMEP recently led a panel at an economic development conference about automation and explained that automation has been instrumental to the growth and success of manufacturing companies in Georgia.
GaMEP helped several companies across the state embrace automation – including Shaw, Helena Industries, and Fondarific. All of these companies are reaping the benefits of automation, including increased revenue, lower labor costs, and a decrease in inventory. Representatives from these companies are being nominated for awards such as the Top 10 Faces of Manufacturing and Georgia Small Business Person of the Year.
Overall, GaMEP is helping combat negative stereotypes about automation in manufacturing, and helping companies become more productive.
University Of California – Expanding Innovation & Entrepreneurship
In January 2017, the California legislature passed Assembly Bill 2664, which granted the University of California system a one-time award of $22 million to expand innovation and entrepreneurship among its campuses. Each of the 10 University of California campuses was given $2.2 million to promote innovation and entrepreneurship throughout their community. Each campus is expected to leverage public-private partnerships in order to use the $2.2 million in a way that is most beneficial for their community.
The funding is intended to:
- Encourage greater outreach to women, minorities and veterans in entrepreneurship,
- Increase seed and proof-of-concept funding,
- Expand lab and incubator capacity,
- Support deployment of successful programs across multiple campuses,
- Accelerate startup launch and growth,
• And create networking, mentoring, internship, and entrepreneurship opportunities.
The government support that the University of California received was unprecedented and is expected to have economic effects that reach far beyond their campuses.
Allowing each campus to use the funds at their discretion will enable them to address community-specific issues, improve the learning experience of their students, and promote innovation and entrepreneurship across the entire state.
The Council for Supplier Diversity, San Diego – Assistance for Minority, Women, and Service Disabled Businesses
The Council for Supplier Diversity has a long history of supporting minority, women, and service disabled-owned businesses in San Diego. Founded in 1999, the Council’s mission is to use Supplier Diversity Initiatives as an engine for economic development in underrepresented communities, which adds value to the supply chain, increases opportunity for diverse businesses, and reduces poverty. The Council offers Member and Supplier Services.
Member Services are for companies interested in expanding their own diversity programs, and for an annual membership fee the Council assists the company in engaging in more proactive diversity efforts. Supplier services give minority, women, and service disabled business owners access to resources like networking events with potential clients, certification services, and access to the Business Development Center.
The Business Development Center opened in 2012, and includes three main resources – office suites for suppliers in need of office space, professional meeting and training space for suppliers, and professional training and seminars. The Council’s main goal is to provide suppliers with opportunities to expand their businesses, and connect them with supportive members who might not have otherwise turned to a minority, women, or service disabled-owned supplier business.
The Council for Supplier Diversity is funded through renting out their office spaces in the Diverse Business Development Center, annual membership fees, and donations. The Council’s members include high-profile businesses like the San Diego Zoo Safari Park and San Diego Unified School District.
he San Diego Economic Development Department is also partnering with the Jacobs Center for Neighborhood Innovation and Connect, a startup support company, to create Connect All – an accelerator focused on entrepreneurs in low-income and minority neighborhoods left out of the city’s recent growth.