Sacramento as New Hub for Semiconductor Job Growth

0:01Bloomberg Audio Studios Podcast Radio News. You're listening to Bloomberg Business Week with Carol Masser and Tim Stenevek on Bloomberg Radio. Well, in California, L.A. and San Francisco get a lot of the attention. Barry Broom, though, says we've got to be looking inland at the state's capital, Sacramento. Barry Broom is the CEO of Sacramento Economic Council. It's a public-private partnership. It works to bring business to and grow business in the greater Sacramento area. He joins us here in the Bloomberg Interactive Broker Studio. First president of such, right? Yeah, I was the founding CEO of the organization.

0:40And we want to talk about what's going on in Sacramento, but you've had stints in the greater Phoenix area, Kalamazoo. Because you go around, you know, we have a founder who thinks a lot about cities and healthy cities and what you need to do. What are you seeing in terms of common threads? Because you go to some parts and some cities in America and it's really rough. And, you know, you think about how do you revitalize? revitalize. Is there common threads that can work throughout the nation or what have you found in doing this? Yeah. So I started off as a neighborhood organizer in Cleveland. I ran housing projects in the late eighties and early nineties.

1:15So I'm officially old, but you know, I think one of the things that season or season, yeah. Wisdom. You know, one of the most important, you know, the problem is, you know, we have this exotic social conversation going on in cities because they're the center of culture. So Sacramento is the most diverse city in America. And so we tend to get caught into the complexity of that conversation. But I assure you, if you run a really clean city with great parks and recreation, and you deliver basic services, and our new mayor, Kevin McCarty in Sacramento gets that, has brought in a top city manager to do that, it's remarkable what cleaning up a neighborhood will do, putting in a library in an underserved neighborhood, putting parks.

1:59One of the things that I've seen that's really successful is a standards program. So if you look at an affluent neighborhood or a poor neighborhood, do they have the same park? Well, the community that's living in the poor neighborhoods know what the rich people's parks look like. So if the mayor is giving equal access to parks and basketball courts and rec centers and youth programs, they know you control that. They know you see them. You'll tend to gain confidence. And then if you go in and clean up a street or a city, you'll see people go on their yards and landscape on their own. They'll repaint their house.

2:28So it's really a basic element. You know, it's clean, safe, public safety, parks, wrecks, things to do. But it's really a really old school, you know, Mayor Daley Chicago planning model that works, you know, and the case of New York, you know, the city that never sleeps, right? So let's talk about Sacramento and the work you've done in Sacramento as the founding CEO of the Sacramento Economic Council. I'll never forget flying into Sacramento's airport about a decade ago at this point for a friend's wedding in Tahoe. And speaking to the receptionist at the hotel, we got there like really early in the morning and there was a lot of traffic already.

3:08And she said, oh, this is everybody going to work in San Francisco right now. Even a decade ago, people had been priced out of San Francisco and they were commuting to San Francisco. Is it still like that? Not quite as much because part of what was happening is, you know, our vision for Sacramento prior to 2014 was we didn't want to end up like San Francisco or L.A. So if you look at Sacramento, it's more indigenous than most communities in California. We have a lot of migrants from L.A. and San Francisco. So when you hear everyone's leaving California, what they're really doing predominantly is moving to Sacramento or they're moving to Sacramento or L.A.

3:47We do have people leaving, but they're mostly 45, 55 and older. So we're still holding on to our young talent. So what we've been able to do is we've built a really strong semiconductor play around memory. We've driven our universities into the center of our economy. You know, we've become a top tiered performer in entrepreneurship, according to the Brookings Institute. And so we went from only keeping 10 percent of our college students to now that's like 40. and then the Bay Area migrants to Sacramento, which historically were retirees, are now 33 and educated. So the remote working kind of repositioned us a little bit.

4:22So people are staying in Sacramento. They're doing the work in Sacramento rather than commuting out of it, which has happened in the past. Yeah. And, you know, kind of like, you know, the way New York works, right? I mean, when you think of a labor shed, people think it's an MSA, not New York and not in California. So it's not unusual to drive an hour to work in California. So you're skipping through MSAs and crossing over labor sheds that people historically wouldn't think are yours. But I'll give you a great example. No one thinks Cal Berkeley is a Sacramento school. Cal Berkeley is 60 minutes from downtown Sacramento.

4:52How do we not have Cal Berkeley, right? Stanford's 90 miles away. You know, so these universities are very robust and outward facing into the Bay Area and globally. But, you know, they're within 100 miles. Sacramento's the number three U.S. market for higher education talent. Okay. I just looked up MSA. Do you mean metropolitan statistical area? Yeah. Yeah. So most people. You didn't mean multiple system atrophy. There's a couple of meetings, but that's what you're saying. So skipping over. Yeah. So, you know, you might live in Sacramento and work three days in Palo Alto. Yeah. And you might share an apartment with five of your friends and your remote work on Mondays and Fridays.

5:26Right. And there's a lot of Bay Area people. There's about 98 ,000 people from the Bay Area that work in Sacramento. State capital, health care, bioscience, food and ag. So we have a unique scientific community that draws Bay Area talent. And then Bay Area, typically historically, has drawn our tech talent. We're now keeping that because of our semiconductor achievements. Yeah, you know, it's interesting. When you are a state capital, it can be good or bad. It can be all government, nothing else. But, you know, having the right mix and attracting, tell us what kind of businesses you guys have brought in or looking to bring in that you know will be even better for the community.

5:59Yeah, so one of the things, you know, our goal is this. How do we move away from government? Because, you know, think of Albany, right? We're more dependent upon government than we should be, and we know that. And these governments are now having structural problems. That means economic challenges for you going forward, not just on the service side, but the GDP side, right? And then, you know, how do we create a net new economy in a region that pivots towards the future, respects climate change, and has an eye on equity and inclusion, which is different than DEI? I mean, if you're building an economy and you're leaving communities of color around, well, that's how we ended up where we were in 2000, right?

6:32Yeah. So you cannot grow an economy. You cannot explain to 50 % of America why they're not participating in an economy. So I think the fact that we have incredibly high performance in our racial and geographic inclusion data, number two in a country, number five in a country, has helped us. So when people see growth and expansion, they're starting to see it benefit across multiple communities. So they have a little bit more confidence that they're participating in it, which makes them more interested in the expansion. A lot of the anti-growth movements in the country is, hey, my rents are going to go up.

7:03it's going to be tougher to get a bus and you're going to be a bunch of cool bourgeoisie guys working for amazon in brooklyn but i'm not going to work at amazon in brooklyn so why don't you just push that thing out so i can still keep my rents under control and if you don't bring people along you get too much friction in the urban core for economic vitality and then of course long term that's going to leave big economic and structural debt problems in your schools and in your neighborhood so i think we're doing a pretty good job of that and i really credit my board and the political leadership of our town for doing that.

7:34Barry, come back soon. Yeah. Continue the conversation. Be fun. Barry Broom is Sacramento Economic Council president and CEO, joining us here in the Bloomberg Interactive Brokers Studio.