East Bay well-positioned for the next era of manufacturing

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It’s easy to forget in our era of apps and social media that in the end we depend on physical products that are more than bits and bytes. Tech runs on hardware, biologics are manufactured, and products that support cleantech, electromobility and the food we eat are produced in manufacturing facilities.

This is an advantage for the East Bay, the Bay Area’s historic manufacturing center.

At one time the Bay Area had a large base of manufacturing companies. Many closed or left, seeking lower costs in other states or overseas. We should care about that. Manufacturing holds the key to a balanced economy, providing middle-income jobs, upward mobility and an anchor for product research.

With 30,000 companies and 800,000 employees, manufacturing in California is larger than in any other state but its image is out of date. More and more of today’s production requires digital skills as workers interact with robots, use 3D printers and work with sensors, data-driven autonomous systems and digitally connected devices. These skills require targeted education and training but not advanced degrees.

Manufacturing offers the East Bay — with its land, logistical infrastructure and current production base — an opportunity for growth. Last year it supported more than 70,000 jobs in Alameda County, with an average wage of $52,000. Technical instrumentation is the largest segment (where production has grown 70% since 2008), followed by electronic components, medical equipment, industrial machinery and computer equipment. Biopharmaceutical manufacturing is also strong.

In Berkeley, Bayer’s plans to expand its product development and manufacturing campus is expected to generate more than $600 million in economic activity over the next 10 years, with direct employment at the campus rising from 1,000 today to nearly 2,000. The workforce is diverse, with 75% earning salaries above $85,000.

Another example is Astra, a space company at Alameda Point that builds launch vehicles. It recently completed its first successful commercial orbital launch and will soon launch for NASA. The company expanded its employee base from 100 to over 300 last year, with plans to double that. Astra contributes more than $58 million to the city of Alameda’s economy. More than 22% of its employees are Alameda County residents and over 30% are high-skilled.

On a different scale, Tesla employs more than 10,000 workers in the Bay Area and anchors the region’s largest manufacturing supply chain, leading the nation’s transition to electrical vehicles. Production in the region is targeted to grow by 50%.

If the East Bay can embrace the opportunity that 21st century manufacturing presents, benefits will come through economic growth and new middle-income jobs in an economy that faces a growing gap between high-paid tech jobs and low-paid services.

But the Bay Area is expensive. Manufacturing can either grow here or go elsewhere. Local leaders need to work with business to create conditions that will allow manufacturing companies to grow, and work with companies and educators to ensure that the region can supply the skilled workforce required.

Other jurisdictions around the country aggressively compete for manufacturing, with governors rolling out the red carpet. They facilitate siting and many offer incentives, but the real sales pitch is ease of doing business. That puts California, and the Bay Area in particular, at a disadvantage.

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