Technology fuels need for new skills

Pasadena Star News

By: Cynthia Kurtz
Posted 4/10/2013

  

There are many ideas about what we can do to boost the economy-investing in infrastructure, controlling inflation, improving access to capital and getting our national debt under control are just some of the proposals being considered. However, I believe there is something else we should tackle first. 

We are experiencing a global technology revolution. It is a revolution that is going to have as far-reaching impacts as the printing revolution which transformed the way we communicate and the industrial revolution which reengineered manufacturing. 

What is the technology revolution changing? Everything. Whether it is genomics, cloning, bioengineering, smart manufacturing, nanotechnology, big data, or how we watch TV, there isn’t anything that isn’t being impacted by technology. Every product, every transaction and every service is changing.

Previous revolutions took 50 to 60 years. This one is happening seemingly overnight. Every day there are new business doing new things and needing people trained and ready to fill the new jobs. 

The technology revolution is also changing what job skills businesses need. Many lower skilled jobs are being eliminated and higher skilled jobs are being created requiring retaining for older workers and a better educated youth workforce.

We have known for some time that high unemployment and education are related. In 2012, individuals without a high school diploma had a 12.4 percent unemployment rate and a median annual salary of $24,400. Employees with an Associate’s Degree had a 6.2 percent unemployment rate with a median annual salary of $40,800. The technology revolution will increase this education gap.

A few week ago Encino Advisors, LLC, an economic consulting firm based in Davis, CA released a report entitled “Left Out, Left Behind: California’s Widening Workforce Training Gap.” The report was commissioned by Corinthian Colleges, Inc., based in Santa Ana, CA.

The report concluded that “increasingly individuals need post-secondary education and training to secure and maintain employment. New jobs especially in the primary growth industries require new skills. Further there will be an insufficient number of skilled workers to fill the available jobs.”

This seems like the perfect role for community colleges. While CCs are well positioned for providing skill based training, the study found that there is a “significant gap between demand and supply for career education in California.” They concluded that more than two million Californians will go unserved by the state’s community colleges in the next decade. 

Last Sunday this newspaper ran a story on how difficult it is to get a community college degree. Kelly Puente reported that “the traditional two-year (community college) stint has ballooned into six years and beyond as they struggle to transfer and graduate.”

Think about what this means. Millions of Californians looking for work while good positions go unfilled. Building our economy recovery plans around fixing these education gaps is a path for success.

Retailers pull out stops to lure shoppers

Pasadena Star News

By: Cynthia Kurtz
Posted 4/03/2013

 
California sales were up 6.1 percent for the fourth quarter of 2012 (October to December) compared to the same period in 2011 according to a recent report released by HdL Companies, an economic data analysis consultant located here in the SGV serving 360 clients in six states. That is good news since consumer spending is a key to economic recovery. 

For retailers the fourth quarter numbers that matter are general consumer goods spending. Holiday sales often make or break the whole year for a retailer and they also received good news with receipts up by 4.3 percent over 2011.

Year to year comparisons alone don’t tell the story about what is happening inside retail. Things are changing quickly. Looking at the 2012 holiday trends gives us a glimpse of how shoppers are dictating what they want before they will part with their hard earned dollars. 

Starting Black Friday and continuing throughout holiday shopping season, brick and mortar retailers offered expanded hours including being open on holidays, opening as early and 8:00 am, and closing well into the wee hours. While some consumers expressed concern about the nontraditional hours, many retailers concluded it was a good move.

At least in part the expanded hours are in reaction to the explosion of e-commerce competition. On-line shopping increased as much as 17 percent over 2011 while in-store sales declined by 2 percent.

One way traditional stores are attempting to adapt is by merging the on-line and in-store experiences so they complement rather than compete against each other. Until recently a shopper could often find different merchandise, pricing and specials when shopping in the store and on-line with the same retailer. It was confusing and frustrating. Retailers quickly realized a confused or frustrated shopper was an ex-shopper.

Meshing the two experiences so a shopper can order the merchandise on-line and pick it up at the store or order at the store for home delivery is quickly becoming the norm. The combined showroom/on-line experience gives shoppers more choices.

Free shipping is a must during the holidays and a few retailers are finding that continuing it year round helps blur the in-store versus on-line experience. The message is “how can we help you make the decision to buy whenever and wherever you wish?”  And it seems to be working.

Hype also helps. Conventional wisdom use to be that big specials should be kept secret until that day of the sale. Otherwise they would hurt pre-sale sales. But getting shoppers excited seems to be edging out the surprise sale. Shopping is a social experience often planned with friends and family, like going to the movies or sporting event. Advance advertising makes shopping “the event.”

Comparing prices, especially on large ticket items, use to be labor intensive but apps have changed everything. With the flick of a finger, a shopper can know everything about competitors’ prices without ever leaving the store. What is a savvy retailer to do? Match or beat the competitors’ price, of course. 

Gift cards use to be common for durable goods but now consumers want cards for groceries, coffee, entertainment and dining. Considered more appropriate than giving cash...even though they are basically the same thing... today gift cards are the number one requested gift and retailers are ready to accommodate.

Once again the Consumer is King.

Importance of freight is recognized

Pasadena Star News
By: Cynthia Kurtz
Posted 3/20/2013

Trains, planes and automobiles - we need all kinds of transportation to meet the challenges of moving goods and services. This is especially true in Southern California where 40 percent of the containerized goods that enter the U.S. destined for places throughout the country comes through the Ports of Los Angeles and Long Beach. 

Last week while visiting officials in Washington D.C., I had an opportunity to learn more about what the federal government is thinking regarding goods movement. There are issues that transpose party lines. While the political parties don’t agree on much and the likelihood of a federal budget remains slim, everyone I spoke to agreed that there is a critical need for investments in infrastructure. Among the most pressing is the need for improvements in transportation systems particularly those used extensively for moving products from where they are produced or imported to the customers and users.

The first step in the federal legislative process is setting policy. When the topic is transportation that means including the item in the national transportation act. The latest transportation act, “Moving Ahead for Progress in the 21st Century" or "MAP-21” for short, passed in October 2012. It represents a significant change in thinking about goods movement. 

Map-21 is the first national transportation act to recognize the importance of freight. It establishes a National Freight Policy, calls for investments in transportation and operational improvements, and requires the federal Department of Transportation to define "primary" and "rural" networks of roads that are essential in freight movements.

Map-21 also encourages States to develop their own freight strategic plans and advisory committees. The committees are to be broad reaching and include representatives from ports, shipping, carriers, freight associations, state transportation departments and state and local government. 

While there are great advances in planning for freight, in its current form the freight policy and essential networks are defined exclusively around the highway system. Those of us here in the SGV know freight rail, which carries 42 percent of the nations ton-miles, is also a critical part of the goods movement system. If all of the freight that crosses the SGV were in trucks, our congestion would be unmanageable. The Alameda Corridor East along with its safety improvements and 22 grade separations needs to be regarded with the same high priority as our interstate system.

That's why this month's introduction of the "Multimodal Opportunities Via Enhanced (MOVE) Freight Act of 2013" is such encouraging news. The Freight Act focuses on creating a national freight plan for moving goods by road, rail, water and air. Introduced by Congressmember Sires from New Jersey, it has five co-sponsors including the San Gabriel Valley's Congressmember Grace Napolitano and Southern California Congressmember Janice Hahn.

Freight volumes are expected to more than double by 2040. This makes an inclusive policy that expands the definition of national freight network and makes financial investments in a multimodal integrated system key to developing the most effective and efficient system for goods movement. Now everyone in the SGV should get behind this important piece of legislation and help lift it over the finish line.

SGV well positioned for success

Pasadena Star News

By: Cynthia Kurtz

Posted 3/6/2013 

“It’s close to what counts the number one reason the San Gabriel Valley is the place for business. Successful businesses need to be close to customers, markets, materials, and employees. When you are in the SGV you are close to it all. 

Need to get to Orange County? Jump on the I-605 or SR-57. Headed to the IE? You’ve got the I-210, the I-10 and the SR-60 to choose from. Got a meeting in downtown Los Angeles? Twenty minutes and you can be there. In all, seven major freeways traverse the region. The light rail lines that will eventually connect all the Foothill cities and run along the SR-60 are only going to make connecting better.

What if you are importing materials from New Zealand or China? Selling your products in St. Petersburg or Italy? Not a problem. The nation’s two busiest container ports are close at hand with both truck and rail options for shipping.

Your CEO has a trip to the east coast each week? No need to go all the way to LAX. Ontario and Bob Hope Airports are just minutes away. If your company owns its own airplane, then El Monte Airport is your home base.

The SGV has every neighborhood from blue collar to executive so employees at every income level have affordable and attractive housing options.

No matter where you locate in the SGV, you will be close to institutions of higher education. I am not talking about any old schools. SGV schools are prestigious. No other region can brag about “bookends” like Caltech - the number one university in the world two years in a row - and the Claremont Colleges. No doubt about it, the SGV is “400 square miles of talent.”

All of the SGV’s prestigious schools - Mt. San Antonio (SAC), Citrus College, Cal Poly Pomona, University of La Verne, Rio Hondo College, Azusa Pacific University, Pasadena City College, Mt. Sierra College, Western University of Health Sciences, Caltech, and  Keck Graduate University, - provide a skilled workforce and a steady supply of opportunities for research and product development. 

The SGV is also a good deal for businesses. Lower commercial lease rates help the bottom line. There is room to expand. All in all, locating in the SGV will “make your CFO happy.”

There are very few other places that can top the location, talent and cost effectiveness of the San Gabriel Valley for business. Help spread the word. Let your professional contacts know that the SGV is open for business.

Note: Thank you for all the comments on the recent column about the penny. While a few readers just couldn’t imagine getting rid of the penny, the vast majority were ready to make the change. The best idea comes from my friend Victoria at The Ratkovich Company. Since the penny costs 2.4 cents to make and the nickel costs almost 10 cents to make, Victoria asked, “why not make the penny worth 5 cents and get rid of the nickel thereby solving two problems at the same time?” Victoria, thank you. I wish I had thought of that!

Official: State industry is fragmented

Pasadena Star News

By: Cynthia Kurtz

Posted 2/27/2013

Recently the San Gabriel Valley Economic Partnership was pleased to host Karen Hathaway, 2012 President of the Los Angeles Area Chamber of Commerce, as our featured lunch speaker. The Chamber Chair is a fitting role for Karen since her great-great grandfather was one of the founders of the L.A. Chamber 125 years ago.

Karen is President and Managing Partner of LAACO one of the oldest continually operating businesses in Los Angeles. Her family’s involvement in the Southern California business community harkens back to the 1880’s, with the founding of the Los Angeles Athletic Club. Today the company is a publicly traded limited partnership. Along with the LAAC, their primary business is managing four million sq. ft. of self-storage facilities.

Even with the responsibilities that come with being appointed President of the company in 1990 and elected as Managing Partner in 1991 Karen has made civic and community involvement a priority. Throughout her business career, Karen has found the time not only to chair the Los Angeles Area Chamber of Commerce, but to serve as chair of the Central City Association, as well as to have served on the Boards of numerous community service organizations including the American Red Cross of Greater Los Angeles and the United Way of Los Angeles.

When it comes to civic engagement, Karen doesn’t just talk the talk, she walks the walk. And civic engagement was what Karen’s lunch presentation was about. Her theme was simple - people in business need to get involved in public policy decision-making. 

California has the ninth largest economy in the world. Los Angeles County has the 21st largest GDP. Our region leads the nation in number of export/import related jobs and is still the nation’s largest manufacturing center. We are clearly a global business center. 

So how can a state and a region with this much economic activity have such a bad reputation as a place to do business? Why are costs and regulations businesses must shoulder so much higher and more complex here? Instead of pointing fingers at who to blame for our situation, Karen suggested the business community needs to do some soul searching. What we would find is that businesses and business associations have “fallen behind.”

“Labor unions coalesced long ago,” she told us “as did the environmental community. Not business.  Fragmentation is the major issue that dilutes the voice of business in politics and government reform. We are told by elected officials that business needs to start showing up (when policy is being made). Our physical absence is a sign that we don’t care.”

Karen suggested a road map for action. Involvement in associations like the L.A. Area Chamber and the San Gabriel Valley Economic Partnership is a step...but just the beginning. “There are limits to what any one business organization can do by itself. Business groups must band together, if we want to be heard.  When we work together, we increase our leverage.”

Great advice from someone who knows the business of business and the business of public involvement.  Partnership and collaboration are the means for a stronger California economy.