Larry Westerlund, Fresno’s director of economic development, seeks to partner with Fresno State and UC Merced in an effort to draw more tech jobs into Fresno.

published on November 16, 2018 - 7:00 AM
Written by David Castellon

Fresno economic development officials have had a fruitful run of attracting major e-commerce distribution centers – Amazon, Ulta and Gap key among them, generating at least 4,500 jobs.

Know they are kicking around ideas intended to attract major tech businesses, which generally pay much higher wages to a larger ratio of their employees than Ulta and Amazon.

Of course, Apple and other tech-oriented businesses aren’t likely to abandon their Bay Area offices for the Valley. Instead, the pitch would be to locate divisions or satellite offices here, said Larry Westerlund, Fresno’s director of economic development.


Come on over

If the idea gels into an actual strategy, it would start with visits to leaders of such companies, as “we know that 60 percent of the folks in the technology world in the Bay Area want to move out. They might love the Bay, the Golden Gate, but they can’t afford to live there,” Westerlund explained to a crowd of nearly 50 people gathered last week in a classroom at the Craig School of Business at Fresno State.

He mentioned reports of large numbers of Apple employees putting off having children because of high cost of living, noting that workers making seemingly ample salaries of $142,000 a year often are priced out of home ownership in areas where the median price for a modest home is in the $900,000 range, with prices well over double that in some areas, even for modest homes.

“Even with that pay, people are just scraping by in the Bay Area,” or they move to Patterson or Los Banos, where homes are cheaper, but they have to endure “ungodly” daily commutes to work in Bay Area cities, Westerlund said.


The Fresno alternative

Westerlund noted that in September, Facebook opened a new office complex – more of a village, according to news reports – in Menlo Park, but as he sees it, such a complex could have been built cheaper in Fresno. He added that many of the company’s employees might be happier if it had been built here so they could live and work here.

With social media tools and collaborative computer software, employees often can easily collaborate with bosses and co-workers over great distances without being in the same building or city, he added.

Once the California High-Speed Rail line from the Valley to San Francisco is completed, workers here could get to the Bay Area for face-to-face meetings in about an hour, Westerlund noted.


The plan

The idea Fresno officials are discussing would involve pitching to high-tech companies that locating portions of their operations here not only might save them money, but also incentivize workers to stay on, because housing is cheaper here – with median prices in the $250,000 range – and they wouldn’t have to endure the heavy traffic, high costs for goods and other issues that can make Bay Area living difficult, said Westerlund, who discussed the potential plan as the guest speaker last week as part of the 2018 speaker series put on by Fresno State’s Gazarian Real Estate Center.

“We’re working on something with Fresno State and [University of California], Merced about approaching companies and saying, ‘Hey why don’t you go and do something down in Fresno?’”

Westerlund, whose job mostly entails trying to recruit large businesses to locate or expand in Fresno, said involving the universities in such discussions likely would be important because of one of the reasons higher-paying tech jobs have mostly gravitated to the Bay Area and Southern California and not so much here.


Skills gap

A few years back when Fresno leaders were putting together an incentive plan to entice Ulta to build here, there were some objections over the jobs the new businesses would generate, Westerlund recounted to the audience.

Not the number of jobs, but rather the types of jobs – most offering salaries at or slightly above the minimum wage – with few in the higher-wage ranges, as might be more common for employees of Apple or Google or at other big tech companies.

“We had people come up to the [City Council] dais and say. ‘I don’t want $15-an-hour jobs. … We want higher-paying jobs,’” said Westerlund, noting that similar objections came as city officials developed incentive proposals for Amazon and Gap, Inc.

He told the audience that city officials would love to attract the sorts of industries offering large numbers of higher-paying jobs above the $30,000 annual salary range and even those paying near or above $100,000 a year, but “Right now these are what the city can supply,” he said of the lower-paying jobs. “The reason we can supply those jobs is because that’s what our workforce can do.”

Not that the city or the Valley is bereft of engineers, scientists, etc., but the Valley doesn’t have them in the numbers tech companies tend to want in an area before considering the possibility of locating there. And despite having two traditional universities in Fresno and UC Merced nearby, they don’t produce graduates in these high-tech skillsets in the numbers that big tech firms would consider them consistent sources for new employees, Westerlund explained.


‘Bane of Fresno’s existence’

“This is the bane of Fresno’s existence, and the Central Valley, for that matter,” he told the audience, referring to the U.S. Bureau of Labor Statistic’s Occupational Employment Statistics and Location Quotient, which allows potential employers to get a measure of a given occupation’s share of an area’s employment relative to the national average. The jobs listed cover a wide gamut, from bartenders to aerospace engineers.

Generally, a score of 2 to 4 is the “sweet spot” high-tech companies look for, indicating a good number of people in a particular career field who could potentially be hired, Westerlund said.

But in those tech fields, the Fresno area tends to score well below the sweet spot, said Westerlund, noting the area has a .35 rating for electrical engineers and a .16 rating for industrial engineers.

As such, he said part of the discussions the city now is having with Fresno State and UC Merced is how to approach their respective university trustees to request making the expansion of science, technology, engineering and mathematics (STEM) classes a “priority project” here in the Valley, bringing in more students majoring in these fields and, thus, more graduates, which could incentivize businesses that most need people with these skillsets to locate here.

“I mean, lets go big if we’re going to go big,” he said. “Because if we can show we have an answer to the problem, and if we can do that ,we can sell that. I think I can sell that.”

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