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Tuesday, Dec 6, 2022


The success of any area depends on its ability in creating great jobs, attracting people to live there, and giving people the chance to thrive.

As we all know, this has been a challenge for Orange County. While we have created jobs, most of them have been low-paying service jobs. While we have seen a great deal of wealth created, most people are finding it hard to keep up with the cost of living.

And while local and state taxes continue to increase, we’ve seen poverty levels and the homeless crisis grow. People are voting with their feet as they leave Orange County seeking jobs in more affordable areas of the nation.

The smart money in Orange County knows this is not sustainable and has stepped up to the challenge of doing something to reverse the trend.

A new strategy has been defined: Embrace the growth of innovation industries and position Orange County as an innovation hub.

The logic is compelling. Innovation industries have a history of creating higher-paying jobs. With higher-paying jobs, we can attract people and create businesses that can grow in the future. This economic model has been thoroughly described by the Brookings Institution. Its research shows that innovation hubs are better able to attract capital, grow faster, and build wealth than places that do not focus on innovation.

Brookings’s definition of “innovation jobs” spans industries. More than simply information technologies, software, and semiconductors (which has fueled Silicon Valley’s growth), it includes industries such as agricultural technology, chemical manufacturing, aerospace, and science and technology services. As the chart below indicates, in the past three years, Orange County’s growth rate has lagged the U.S.

The good news for Orange County is that it has many of the building blocks in place for creating an innovation economy. Great universities in our county produce world-class research and highly trained graduates. Companies in the science and technology sectors have found Orange County to be a solid place to build their futures. And, for its size, Orange County has an entrepreneurship infrastructure to support innovative growth.

Orange County, however, has not yet been fully able to strategically capitalize on its strengths.

If Orange County is ultimately to become successful in innovation, we need to recognize that we’re in a competitive battle with other innovation areas to attract human and investment capital. We need to look at this the way any successful business looks at competition in its own competitive arena. We must set quantifiable goals for innovation and regularly measure progress against those goals.

That kind of strategic roadmap requires a diagnostic tool to measure our progress against goals.

Fortunately, in partnership with the CEO Leadership Alliance of Orange County, we have started that strategic journey. Chapman University’s A. Gary Anderson Center for Economic Research has harnessed a team that includes scholars from both Chapman and UC Irvine to create a regional innovation indicator. That effort is being spearheaded by the authors of this article.

The indicator takes a quarterly snapshot of how Orange County is doing versus other tech hubs across the nation. It uses a blend of business growth, job growth, and wage growth to assess progress in Orange County versus that in 19 other innovation hubs around the county. The public unveiling of the indicator will take place on Dec. 17 at Chapman’s 43rd Annual Economic Forecast Conference.

In addition to providing local leaders with a scorecard to measure our county’s progress in creating jobs in innovation industries, we hope to use it as a tool in determining the causal factors that explain how and why innovation jobs are created. As a bonus, the “Chapman-UCI Innovation Indicator” will provide the first look at how the COVID-19 pandemic has affected innovation economies.

The key for Orange County is to continually measure its progress in achieving its innovation agenda. By focusing on building our county into a nationally-competitive innovation powerhouse, we can “lift all boats” in our county and propel prosperity into our future.

Stay tuned!

To attend the virtual Chapman University’s Economic Forecast on December 17, 2020, at 3:00 p.m. PST, go to this link https://economicforecast.chapman.edu/ and register for complimentary access.

Jim Doti is President Emeritus and Professor of Economics at Chapman University; Ken Murphy is Assistant Professor at University of California, Irvine; Raymond Sfeir is Professor of Economics at Chapman University; and Marshall Toplansky is Clinical Assistant Professor at Chapman University.

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