According to Zillow, a median-priced home near Infoblox’s Santa Clara headquarters is more than $1 million, compared to the median price of $250,000 in Tacoma. Noguera also notes that the retention rate of tech workers is much higher in the region, up to four years in Tacoma, compared to an average of nine months in Silicon Valley. “We’re seeing a number of tech startups starting to take shape in our city, and more investment. The cost of living and ability to grow the company and maintain the workforce are big factors,” Noguera says.
NO. 44 OREGON
Rapid Growth and Expansion in Apparel Manufacturing
The Beaver State has had one of the healthiest economies in the nation for the past few years with growth in multiple sectors. Chris Harder, director of Business Oregon, says tech and software development are growing rapidly, driven by the presence of Intel and a robust entrepreneurial community.
Oregon remains “the Silicon Valley for the outdoor and apparel industry,” he adds, and is home to such companies as Columbia Sportswear, Nike and Adidas North America. Amazon recently announced plans to construct a ninth data center in Umatilla County.
The manufacturing sector is being driven by the Oregon Manufacturing Innovation Center, which opened in Scappoose in January as a partnership between state government, higher education and industries. Modeled after the Advanced Manufacturing Research Centre in Sheffield, England, the OMIC will promote research and development and training in the industry. “We’re bringing together all of these groups, economic developers, government, universities, and firms… and its goal is to help companies do R&D, create better products,” Harder explains.
Michael Gurton, an analyst at Prosper Portland, says Portland has been experiencing rapid post-recession growth, with most of its large employers continuing to expand. As with a number of other West Coast cities, he says there has been strong in-migration and a big talent pool. Last year, Nike announced a $380 million expansion of its headquarters in Beaverton; Under Armour is also expanding its 109,000-square-foot campus in Portland.
Yet Gurton says Portland is increasingly challenged with affordability, homelessness and inequality. He says the city is making a number of investments through the housing bureau and trying to leverage economic development to bring more benefit to underserved communities. “And the city, from the mayor down to us, is trying to meet that challenge head-on and change how we do economic development to be more inclusive and focus on those who haven’t experienced this post-recession boom,” Gurton says.
NO. 50 CALIFORNIA
A Return of Auto Manufacturing
There has been a resurgence in American auto manufacturing, and nowhere is that more apparent than in California. The state’s automotive manufacturing sector has grown by 22% since 2011, driven by direct access to the Pacific Rim and one of the country’s top talent pools. Brook Taylor, deputy director of Governor’s Office of Business and Economic Development (GO-Biz), says growth is partly being fueled by the California Competes Tax credit program, which has been in place since 2014 and offers $240 million in annual incentives.
“California is leading the next phase of automotive development, and it’s being spurred directly by a government program that is propelling these companies to make investments here,” Taylor says.
It’s a big change from where California was a decade ago. In the mid-2000s, the auto industry started divesting from the state, closing a number of plants. In 2010, Toyota and General Motors abandoned their joint operations at the New United Motors Manufacturing Facility in Fremont, which was then taken over by Tesla.
Taylor says the market started to truly turn around in 2011 when Tesla established its headquarters and made the base of its manufacturing operations in Palo Alto. Since then, legacy car companies such as Ford, Honda, Mazda and GM have returned and made large investments in their new technology divisions. “A lot of this was the result of a push toward electric vehicles and zero-emission vehicles, and now it’s a push toward autonomous vehicles,” Taylor says.
The activity is branching out beyond consumer automobiles to buses and service vehicles, Taylor adds. Chinese company BYD, which opened a factory in Lancaster in 2013 to construct electric buses, is working on a second phase expansion that will add thousands of additional square feet and more jobs.
Despite the growth, California has its challenges. The state has been noted for its high costs and what some call a “business unfriendly” environment. Yet Taylor points to the state’s economic success and says any higher costs can often be offset by incentives and access to top talent and the Asian market via West Coast ports.