INDUSTRY CLUSTERS IN THE BAY AREA An industry cluster is a group of businesses that tend to locate and grow in close relation to one another. By examining these clusters, researchers can anticipate growth and contractions in a regional economy. In 1995, more than 480,000 people in the San Francisco Bay Area were employed in one of seven knowledge-based industry clusters. These included the computer industry, multimedia, and biotechnology, among others. The number of jobs in these clusters is projected to grow by 59 percent between 1995 and 2020. In comparison, all jobs in the region are expected to grow 45 percent. The computer cluster alone will add more than 70,000 jobs ranging from high-wage engineering jobs to low-wage stockroom clerks.

By 2020, the Bay Area’s knowledge-based industry clusters will employ approximately 18 percent of the region’s workforce. In its recent report, Leading the Transition to a Knowledge-Based Economy, the Bay Area Economic Forum stressed that these clusters drive innovation, economic growth, and job generation in the region. The Bay Area Economic Forum’s study compared the performance of the Bay Area’s knowledge-based industry clusters with those of comparable urban regions, such as Seattle, Houston, New York, and Los Angeles. The Forum concluded that the Bay Area is quite competitive, ranking first or second in all but one of the knowledge-based industry clusters studied in terms of employment concentration and output per employee. Performance of San Francisco Bay Area Knowledge-Based Industry Clusters Compared to Other Similarly-Sized Regions in the U.S. Industry Clusters Computer & Electronics Telecommunications Multimedia Movie/TV Production Biotechnology Environmental Technology Travel and Tourism Employee Concentration 1st 1st 2nd n/a 2nd 1st 5th Output per Employee 2nd 1st 2nd n/a 1st 2nd 5th Source: Bay Area Economic Forum SUBREGIONAL INDUSTRY CLUSTERS Within the Bay Area, the Silicon Valley has the highest concentration of jobs in the computer and electronics cluster. It also tops the list in four other knowledge-based clusters: telecommunications, multimedia, movie/TV production, and biotechnology. Job growth in knowledge-based industries will continue to be strongest in Santa Clara County. Between 1995 and 2020, these clusters will produce approximately 35 percent of the county’s new jobs.

Knowledge-Based Industry Job Growth in the San Francisco Bay Area, 1995-2020

San Mateo County will rank second, with 28 percent of its new jobs in knowledge-based industries. Here the trend will be driven by the health-care industry, since this county has the greatest concentration of employees in the biotechnology cluster. San Mateo County will also benefit from the expansion of the San Francisco International Airport, which is included in the travel and tourism cluster. This county also has a significant number of jobs in the movie/TV cluster, as do Marin and San Francisco counties.