ARIZONA IN THE GREEN ECONOMY

ARIZONA IN THE GREEN ECONOMY

Labor Market Information Improvement Grant

Project Overview

Session 1April 25, 2011

CREDITS AND DISCLAIMER

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This report was funded by a grant awarded by the U.S. Department of Labor’s Employment and Training Administration. The report does not necessarily reflect the official position of the U.S. Department of Labor. The Department of Labor makes no guarantees, warranties, or assurances of any kind, express or implied, with respect to such information, including any information on linked sites and including, but not limited to, accuracy of the information or its completeness, timeliness, usefulness, adequacy, continued availability, or ownership.  State of Arizona has the copyright to this report.  Internal use by an organization and/or personal use by an individual for non-commercial purposes is permissible.  All other uses require the prior authorization of the copyright owner.

WHY “GREEN”? WHY NOW?THE CASE FOR RESEARCH ON THE GREEN ECONOMY

High profile policy priority related to: Energy Economic Development Job Creation

Lack of a baseline of information about the economic importance of “green activities”

Significant investments being made in policies to promote “green” economic activity and job creation

Need for information to guide expectations about impacts of green investments

Nearly $50 million available for research and capacity building from American Recovery and Reinvestment Act (ARRA) of 2009

ABOUT THE ARRA LABOR MARKET INFORMATION IMPROVEMENT GRANTS:AN OPPORTUNITY TO GET ANSWERS

What exactly should be counted as a “green” economic activity or a “green” job?

How important is “green” to the current economy?

What jobs are available (or will likely become available) as a result of growth in the “green” economy?

How do those jobs compare with other sectors?

Implied question: Is the policy focus on growing “green jobs” warranted as an economic development goal?

ARIZONA’S GREEN LMI IMPROVEMENT GRANT1. Project Mgt &

Stakeholder Engagement

Project Steering Committee

Green Economy Advisory Committee

2. Green Economy trends Definition Quantitative data

analysis

3. State of Arizona Green Industries

Industry and occupations survey

4. Job Vacancy Survey5. In-demand Green

Occupation Profiles6. Web Redesign

Benchmark Arizona Workforce Informer

Identify best practices and customer needs

Implement enhanced web functionality

GREEN ECONOMY TRENDS6

DEFINING GREEN JOBS:

Green jobs are either: Jobs in businesses that produce goods or provide

services that benefit the environment or conserve natural resources.

Jobs in which workers’ duties involve making their establishment’s production processes more environmentally friendly or use fewer natural resources.

--Bureau of Labor Statisticswww.bls.gov/green

OVERVIEW OF BLS DEFINITION, SEPT. 2010

1. Energy generation

2. Energy efficiency

a. Includes buildings, equipment, appliances, or vehicles

3. Reduction and reuse

a. Greenhouse gas reduction

b. Pollution reduction and cleanup

c. Recycling and waste reduction

4. Natural resources conservation

5. Environmental compliance, education and training, and public awareness

Output approach: Identifies establishments that

produce green goods and services and counts the associated jobs based on the 5 green activity categories

Process approach: Identifies establishments that

use environmentally-friendly production processes and practices and counts the associated jobs

Green Activity Categories Measuring Green Activity

MEASUREMENT APPROACH USED IN “BATTELLE STUDY”

Identify Arizona-based enterprises producing green goods and services.

No existing industry classification for green industries:

E.g., solar energy, energy efficient products, green materials, and reduction of greenhouse gases are not “industries”

Used business lists to identify companies with:

Green certified products, VC/patent databases, national association memberships, market research listings, etc.

Existence and operations of these firms were also verified to the extent possible through the examination of company websites and phone calls.

Used employment reported in the Dun & Bradstreet company database.

Used company websites to confirm Arizona business locations for firms not listed in D&B

FIRST MEASURE OF THE GREEN ECONOMY:BY INDUSTRY

Battelle identified 1,711 establishments producing green goods and services in Arizona, which employ 31,649 at the end of 2009.

At major the segment level, traditional environmental industries lead in employment.

Agricultural & Natural Resources

Conservation16%

Education & Compliance

4%

Energy & Resource Efficiency

13%

Greenhouse Gas Reduction

1%Pollution Reduction &

Cleanup43%

Recycling & Waste Reduction

12%

Renewable Energy11%

Total Arizona Employment in Green Economic Activities = 31,649

Source: Calculated by Battelle Technology Partnership Practice using Dun & Bradstreet data, April 2010

LOOK AT MORE DETAILED GREEN INDUSTRY SEGMENTS

Arizona’s largest-employing green economy segments include: Waste Mgt. & Treatment – 353 establishments &

9,762 jobs Conservation – 246 establishments and 4,643 jobs Recycling – 277 establishments & 2,887 jobs

Energy Efficient Building Products & Materials – 116 establishments & 2,234 jobs

Environmental Research & Consulting Services – 279 establishments & 1,746 jobs

Solar PV and Thermal Energy – 133 establishments & 1,496 jobs

IDENTIFYING STRATEGIC “GREEN” OPPORTUNITIES IN ARIZONA

NEW ENERGY ERA – DISTRIBUTED SOURCES OF ENERGY TAKE HOLD

0.0

50.0

100.0

150.0

200.0

250.0

1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 2028

Natural Gas

Coal

Liquids (including biofuels)

Nuclear

Renewables

Qua

drill

ion

BTU

s

Year

World Energy Use by Fuel Type – 1980 through 2030

Sources: History: Energy Information Administration (EIA), “International Energy Annual 2006 (June-December 2008), web site www.eia.doe.gov/

SETTING THE CONTEXT: AN EMERGING GREEN ECONOMY

First Wave – Traditional Environmental Industries Led by advancement of environmental laws and

regulations to address problems from air pollution, contaminated water, and hazardous/solid waste, among other environmental threats

Emerging Wave – Renewable Energy & Energy Efficiency Led by growing concerns about the

environmental impacts of climate change as well as the rising cost and uncertainty of oil supplies

IDENTIFYING STRATEGIC OPPORTUNITIES IN THE EMERGING GREEN ECONOMY FOR ARIZONA

Potential future growth driven by innovation in new technologies

Most important opportunities in AZ include: Solar Photovoltaic (PV) Energy Solar Thermal Energy Wind Energy Biofuels/Biomass Energy Efficiency and “Green” Building Systems Water Efficiency and Management

ARIZONA GREEN JOBS SURVEY REPORT

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WHY A SURVEY OF GREEN JOBS?

Key workforce questions focused on what people do rather than what companies make What job titles and occupations are “green”? What skills are needed? What education is required? What wages are offered?

Data not readily available by occupation

No administrative source available to provide insights

GREEN ACTIVITY EXAMPLES USED FOR THE SURVEY

Examples Of Green Activities

Making Goods or Providing Services

Improving Processes in Existing Goods or Services

Energy generation Producing renewable energy

Improving fuel efficiency

Energy efficiency in buildings, equipment, appliances, or vehicles

Building long-lasting batteries

Implementing smart grid technologies

Pollution reduction/removal, green-house gas reduction, recycling and reuse

Producing industrial scrubbers or generating nuclear energy

Managing energy proactively

Natural resources conservation

Organic farming Conserving soil, water, or wildlife

Environmental compliance, education and training, and public awareness

Training in regulatory compliance

SURVEY RESPONSES

Mailed surveys to 10,000 employers statewide Conducted follow-up mailing to non-respondents

Response rate from mailings below 10%

Conducted nearly 17,000 telephone follow-up calls (June to Sept. 2010)

Final response rate: 52%

Survey results used to make inferences to all AZ companies

DISTRIBUTION OF GREEN JOBS BY ZIP CODE

MOST COMMON TERMS IN REPORTED GREEN JOB TITLES

GREEN JOBS BY EDUCATION & CERTIFICATION REQUIREMENTEducation Certifications Required < $32,000 $32,000-$62,000 >$62,000 TOTAL Bachelor's/Graduate Yes 0.1% 2.0% 2.5% 4.6% No 0.6% 7.7% 8.1% 16.4% Some College/ Associates Yes 0.5% 1.8% 1.4% 3.7% No 1.7% 3.2% 0.8% 5.7% No Requirement/ High School Yes 6.5% 10.9% 0.2% 17.7% No 27.5% 23.4% 1.0% 51.9% TOTAL 37.1% 48.8% 14.1%

DIFFERENT METHODS OF COUNTING GREEN JOBS

Industry Approach

Enterprise Approach (Battelle study)

Occupational Approach(Arizona Green Jobs Survey/C2ER)

All jobs classified green or non-green by industry

31,649 estimated jobs

1.2% of all AZ employment

30,716 estimated jobs

1.3% of all AZ employment

Assign all jobs from a BLS-defined green industry

Assign entire establishment’s D&B reported employment to green sector based on knowledge of products or services

Assign a subset of firm’s jobs, counting only those that the company identified as “green”

Advantages:•Quick and easy to calculate•Big employment number

Disadvantages:•Includes many “non-green” activities•Misleading characterization of green sector

Advantages:•Uses existing data sources for employment•Organizes firm-level data in ways that allow time-series

Disadvantages:•Requires manual classification of individual firms•Data not readily available to public

Advantages:•More accurately reflects company perspectives•Differentiates green/non-green at the occupation and job-title level

Disadvantages:•Represents point in time estimate•Expensive to replicate

KEY FINDINGS FROM ARIZONA GREEN JOBS SURVEY

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Survey results indicate that Arizona is presently home to 30,716 green jobs.

This figure represents 1.3 percent of total statewide employment, falling slightly below average shares found in several previous studies of U.S. and other states’ green employment.

Service industries dominate Arizona’s green employment activities.

Like the rest of the Arizona economy, most of the state’s green jobs are located in service-related sectors, such as architecture, construction, and engineering.

Green jobs and green industries closely align with existing industries and industry clusters.

At present, nearly all of Arizona’s green jobs are located in firms that employ workers in both green occupations and traditional occupations.

Arizona does not yet appear to have any clear emerging large clusters of businesses or jobs in the leading clean tech sectors.

However, Arizona is home to several leading research institutions that are creating significant new competitive advantages for the state in areas such as advanced energy storage, nano-materials, or biofuels.

Small businesses account for the bulk of existing and new green jobs.

About half of the current green jobs are found in companies employing 50 people or fewer. An estimated 73 percent of new green jobs will be created in these small firms.

A large number of the current jobs making up Arizona’s green economy require relatively low skills and offer relatively lower average wages.

Many of the state’s current green jobs pay wages below state averages and have limited education and training pre-requisites.

The state’s fastest growing green jobs tend to be concentrated in fields that provide higher quality and better paying jobs.

Many of the green industry sectors and occupations slated for rapid future growth also pay higher wages than statewide averages. In addition, the green economy appears to be poised as a solid base for middle skill jobs.

Anticipated green job growth rates are quite impressive and represent a likely fast-growing sector in Arizona during the coming year and beyond.

Overall, Arizona-based businesses expect to see 8.6 percent growth in green jobs in 2011, far outpacing the projected statewide growth rate of only 0.7 percent for all jobs.

ARIZONA JOB VACANCY REPORT

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NUMBER OF GREEN AND NON-GREEN JOB OPENINGS

  May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10

Total 38,596 35,281 42,692 54,534 45,311 59,780

Non-Green Jobs 37,805 34,704 41,958 53,440 44,434 58,589

Green Jobs 791 577 734 1,094 877 1,191

% Green 2.0% 1.6% 1.7% 2.0% 1.9% 2.0%

Source: December 2010

PERCENTAGE OF UNIQUE “GREEN” WEB-POSTED JOBS

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Source: April 2011

DISTRIBUTION OF JOBS ACROSS THE STATE,(NOTE: ANOTHER DATA SOURCE FOR “REAL-TIME” DATA)

Region All Jobs Non-Green Jobs Green JobsPercentage of

Green Jobs

Northern 20,245 19,863 382 1.9%Central 184,974 181,804 3,170 1.7%Southern 54,623 53,481 1,142 2.1%

Arizona 259,842 255,148 4,694 1.8%

Geographic Distribution of Available Web-Posted Green and Non-Green Jobs (Of Available and Classified, January 2011-April 2011)

Source: April 2011

DISTRIBUTION OF GREEN JOB OPENINGS BY ECONOMIC ACTIVITY

 Economic Activity Area (Clusters of Green Industries)

Number of Green Jobs

% of Available Green Jobs

Pollution Reduction & Removal, Greenhouse Gas Reduction, and Recycling & Reuse 2,874 34%

Natural Resources Conservation 2,310 28%

Energy Efficiency 1,540 18%

Environmental Compliance, Education & Training, and Public Awareness 897 11%

Energy From Renewable Sources 724 9%

Source: December 2010

TOP 10 INDUSTRIES WITH GREEN JOB OPENINGS

Industry Code Industry Title

Number of

Green Jobs

% of Available Green Job Openings

541Professional, Scientific, and Technical Services 1,333 23%

611 Educational Services 516 9%

921Executive, Legislative, and Other General Government Support 394 7%

212 Mining (except Oil and Gas) 342 6%

221 Utilities 317 6%

562Waste Management and Remediation Services 306 5%

236 Construction of Buildings 240 4%

622 Hospitals 194 3%

334Computer and Electronic Product Manufacturing 142 2%

561 Administrative and Support Services 131 2%

Source: December 2010

APPLICANT WORK EXPERIENCE REQUIRED

Experience RequiredNon-Green

JobsGreen

Jobs

Less than 1 Year 11% 11%

1 to 3 Years 10% 9%

4 to 7 Years 24% 33%

7+ Years 8% 16%

No experience information provided 48% 32%

Source: December 2010

OCCUPATIONAL PROFILES42

OVERVIEW Over 200 occupations identified through Arizona

Green Jobs Survey

36 selected for in-depth occupational opportunity profiles Jobs require postsecondary education and/or

certification Jobs have salary at least 85% of the state average

wage At least 25 jobs reported through the survey Positive growth expected

Compiled a database and web template for profiles, allowing easy updates/additions

RECOMMENDATIONS FOR IMPROVED LMI WEBSITE

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HOW OTHER STATES DISSEMINATE LMI DATA

RSS Feeds

Twitter

Blog

Web Service

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11

7

3

2

Web Service - Web 2.0 Used on LMI Sites

Number of State LMI Websites

COMPARING OTHER CHARACTERISTICS OF STATE LMI WEBSITES

Guide to Site

Glossary

Personalized Web Site

Another Language

0 2 4 6 8 10 12 14

13

11

8

6

Number of State LMI Websites

KEY FINDINGS – SUGGESTED FEATURES FOR ARIZONA

Enable profile customization

Include data visualization Google graphing

Allow users to define their own region and compare it to the other regions

WRAP UP48

SO WHAT? Increased Market Demand for

Green Economy-related products and services $5 trillion global market 78% of market comprised of

the fastest growing segments: Energy efficiency, Renewable energy, and Greenhouse gas emissions

reduction

Dual benefits of “green economy” related to: Job creation in the short-term Energy independence in the

long-term

Lack of prior data about domestic “green activities”

Provides Arizona with in-depth knowledge of the green economy Multiple research methods utilized

to help show the full picture This knowledge makes Arizona

more competitive

Informs investment and policy decisions about… Training and certification programs Targeting of State Energy Sector

Partnership investments

Provides external stakeholder engagement in the research as well as the interpretation of results

THANK YOU

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