Office of Economic Developmentmcaplan@ci.berkeley.ca.us

510-981-2490

Overview of West Berkeley Economy:Opportunities and Challenges

West Berkeley Area PlanGoals for Employment Growth

(from Preferred Land Use Concept and West Berkeley Area Plan, p. 33)

Office and laboratory jobs 1,200 Retail Jobs 1,200 Manufacturing Jobs: 700 TOTAL 3,100

The Plan’s land use policies were intended to allow at least this amount of employment growth.

1991 1991 2008 2008 % Change

Businesses Employees Businesses Employees EmploymentSector Agriculture 9 34 1 ***Construction 67 1,251 61 1,089 -15%Manufacturing 153 5,025 89 3,636 -38%Transportation & Public Utilities 24 463 5 100 -363%Wholesale Trade 100 1,488 61 1,078 -38%Retail Trade (inc. restaurants) 108 2,598 151 2,973 13%Finance, Insurance, Real Estate 25 160 45 308 48%Services 258 4,723 348 5,498 14%Unclassified 14 67 27 ***TOTAL 758 15,809 788 15,548 -2%

Sources: Figures for 1991 from West Berkeley Area Plan, Table 2-1, p. 65; Figures for 2008 from California EDD, Quarterly Census of Employment & Wages, 2nd quarter 2008

*** Sectoral employment suppressed for reasons of confidentiality but included in the total

Private Employment in the 94710 Zip CodeJune 1991 & June 2008

Manufacturing Employment in Berkeley,1958-2008

0

50

100

150

200

250

300

1958 1963 1967 1972 1977 1982 1987 1991 1992 1996 2000 2001 2002 2007 2008

Manufacturing Establishments

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

1958 1963 1967 1972 1977 1982 1987 1991 1992 1996 2000 2001 2002 2007 2008

Sources: Economic Census (US Census Bureau): 1958, 1963, 1967, 1972, 1977, 1988, 1987, 1992; Other years- California EDD, Quarterly Census of Employment & Wages

0

50

100

150

200

250

300

1958 1963 1967 1972 1977 1982 1987 1991 1992 1996 2000 2001 2002 2007 2008

Sources: Economic Census (US Census Bureau): 1958, 1963, 1967, 1972, 1977, 1982, 1987, 1992; other years, California EDD, Quarterly Census of Employment and Wages

Number of Manufacturing Establishments in Berkeley,1958-2008

1990 2007Use Category Employees Firms Employees Firms % Change

Heavy Manufacturing 1,684 31 3,008 61 79%Light Manufacturing 3,097 266 1,753 130 -43%Office-Based 1,304 232 4,466 604 242%Other Industrial 2,385 310 1,042 171 -56%Retail Trade 1,923 272 2,165 323 13%Grand Total 10,393 1,111 12,434 1,289 20%

Sources: West Berkeley Area Plan, Table 1-1, p. 25 that used 1990 Berkeley business license data;Data for 2007 compiled by OED from 2007 business license data.

West Berkeley Employment by Use Category

Berkeley’s Economic Strengths

• Highly educated workforce

• Proximity to research institutions

• Close to sources of capital and entrepreneurship

• Geographic center of the Bay Area

• Green policy leadership

Educational Attainment Compared to Surrounding Jurisdictions

35.74%

14.80%8.77%

30.93%

17.98%

16.61%

18.10%

23.15%

8.44%

20.45%22.89%

6.78%

23.61%20.16%

31.57%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Berkeley Oakland Richmond

Graduate or Professional Degree Bachelor's Degree Some college or associates degree High School Graduate Less than High School Degree

Source: 2006 ACS Estimates, Bay Area Census

Berkeley Resident Occupations, 2006

Management & professional

63%

Sales and office occupations

20%

Service occupations

10%

Construction & repair

4%

Production & transportation

3%

Farming, fishing, and forestry

0%

Sources: US Census Bureau

Average Tax Burden by City

Source: Berkeley Economic Development: Attracting University Spin-off Businesses, David Agrawal, Elinor Buchen, Lauren Friedman, Chelsea MacMullan and Lin Tien (2006), p. 37 and Appendix 4

Berkeley’s Economic Strengths

• Highly educated workforce

• Proximity to research institutions

• Close to sources of capital and entrepreneurship

• Geographic center of the Bay Area

• Green policy leadership

UC Berkeley Start-Ups

The website for the UC Berkeley Office of Intellectual Property and IndustryResearch Alliances lists over 100 start-ups that have leveraged UC Berkeley intellectual property rights (patentable inventions and copyrightablesoftware) since the mid-1990s. Of those with known locations:

•24 are located in Berkeley

•13 are located in other Green Corridor cities

•54 are located elsewhere in California

•19 are located outside of California (including outside the U.S.)

Two-thirds of start-ups are now located outside Green Corridor cities

• Biofuels, including from innovative sources like algae

• Green construction materials

• Bioscience (biopharmaceuticals, drug discovery, diagnostics)

• Photovoltaics and other forms of solar energy

• Nanotechnology

Spin-Off Firms from UC Berkeley and LBNL

Diverse but concentrations in:

CNNSuperChip

UC Berkeley Spin-Off Companies that have UC Berkeley Spin-Off Companies that have Located Outside of the East Bay Green CorridorLocated Outside of the East Bay Green Corridor

Classification of Start-up firms

In NAICS (North American Industrial Classification System), many start-ups are classified in Industry 541710 Research and Development in the Physical, Engineering, and Life Sciences:

Establishments primarily engaged in conducting research and experimental development in the physical, engineering or life sciences…

In the Zoning Ordinance, the likely classification is Laboratories, Commercial Physical or Biological.

Allowed as an “Other Industrial Use” in MU-LI but cannot displace “protected” Use. Not allowed at all in the M District.

Problems with “Laboratory” Use Category for Start-ups

• Use allowed as “Other Industrial” in MU-LI and MM but not M

• In MU-LI and MM an “Other Industrial” Use cannot displace “Protected Uses”

• “Laboratory” Use Category not appropriate for many start-ups requiring flexible amounts of office and industrial space

Berkeley’s Economic Strengths

• Highly educated workforce

• Proximity to research institutions

• Close to sources of capital and entrepreneurship

• Geographic center of the Bay Area

• Green policy leadership

Berkeley’s Economic Strengths

• Highly educated workforce

• Proximity to research institutions

• Close to sources of capital and entrepreneurship

• Geographic center of the Bay Area

• Green policy leadership

Map courtesy of the East Bay EDA

Berkeley’s Economic Strengths

• Highly educated workforce

• Proximity to research institutions

• Close to sources of capital and entrepreneurship

• Geographic center of the Bay Area

• Green policy leadership

East Bay Green Corridor Partnership:UC Berkeley, Lawrence Berkeley National Lab and cities of

Oakland, Berkeley, Richmond and Emeryville

Regional Map

Local Consumer Demand (e.g. Berkeley Solar Financing Program)

Research Institutions

e.g UC Berkeley, LBNL

LocalGovernment

Emerging Green TechCompanies

Regional “Cradle to Scale”

Strategy

Professional Linkages

& Referrals

Research Space Needs

Land Use Policy

Training & Workforce Development

Business Assistance

Marketing

Regional Retention of

Green Industries

Presence of Green

Suppliers & Services

Employment in Emerging Green Jobs

Retaining & Building the East Bay’s Retaining & Building the East Bay’s Emerging Green-Tech EconomyEmerging Green-Tech Economy

East Bay Green Corridor Partnership

GREEN ACADEMY VISIONGREEN ENERGY EDUCATION PATHWAYS

In the East Bay Green CorridorEducation for Environmental Sustainability, Social Justice, and Community

Development

COMMUNITY COLLEGE PRE-BRIDGE AND BRIDGE PROGRAMS

OUTREACH, RECRUITMENT AND ASSESSMENT

CERTIFICATES & TECHNICAL EDUCATION

GREEN ENERGY MANAGEMENT, ENGINEERING, & ARCHITECTURE

FOUR-YEAR BACHELOR PROGRAMS

GREEN ENERGY EMPLOYERS (AND INCUMBENT WORKERS)*Internships *Employment *Apprenticeships * Mentoring

GREEN BUILDING TRADESLabor Union

Apprenticeship Programs

GREEN ENERGY AND GREEN BUILDING DESIGN

MASTERS & DOCTORAL DEGREES

Large Development Sites~28.18 Acres

University-Driven Local Economic Development:How to Birth, Catch & Keep (Green) Start-ups

City of BerkeleyPlanning Commission

February 2009

Michael CohenUC Berkeley

Office of IP & Industry Research Alliancesmcohen@berkeley.edu

510-643-7201

04/11/23

Page 27

Agenda: ~7 Minute Presentation• Highlight Opportunity

• Summarize 4 Paths for Commercializing Research

• Discuss 4 Steps of Locating in Community

04/11/23

Page 28

Opportunity: Start-up Pipeline• In most years, 10-20 start-ups based on UCB / LBL innovations

• In FY08, over 18* start-ups based on UCB / LBL innovations– At least 11 were green tech

o Now, at least 3 currently located in the 4 EBGC cities

o At least 6 were located in EBGC, but 3 moved..

• Many communities dream of this econ dev pipeline– Establish programs & protocols to attract & retain start-ups

– Encourage facilities to attract & retain emerging growth companies

* This number is comprised of the start-ups that licensed IP from UCB or LBL;The number doesn’t include other UCB or LBL spin-outs that didn’t license IP,nor does it include established companies that licensed IP from UCB or LBL.

04/11/23

Page 29

Opportunity: Start-up Econ Dev Models

Page 30

Commercializing: 4 Paths Out of Research

Push The extent that universitiesdrive the transition from

research to product

High

High

Low

Pull The extent that companiesdrive the transition from

research to product

Low

Morphed

Milked

Mined

Marketed

Organically out of researchby team member(s)

Systematically out of researchby corporate collaborators

Opportunistically byentrepreneurs (e.g. MBA students)that periodically scour campus

Methodically to industry by campus (e.g. PI, PR, IPMO, etc)

Page 31

Commercializing: Morphed, Mined, Milked, Marketed

PushHigh

High

Low

Pull

Low

Organically out of researchby team member(s)

Examples: Amyris, Calimetrics, CaliSolar, CellASIC, Chiron, Excellin, GoodGuide (TaoIt), Harmonic Devices, Inktomi, Integrated Diag, IntelliOne, Kalinex, Lumiphore, Mercator Med (EndoBionics), MicroClimates (Aptility), MicroFluiDX, OnWafer, ON Diagnostics, PhotoSwitch Bioscience, Redwood Bioscience, SiClocks, TheraFuse, Urban Scan, Verimetra Med, Wireless Industrial Tech, Dust Networks, Iris AO, SiTime

Drivers: Great Research

Entrepreneurial culture & eco-system

IP: Some obtain exclusive license to improve

biz plan & attract investors

Some ignore or abscond with IP

Morphed

Page 32

Commercializing: Morphed, Mined, Milked, Marketed

PushHigh

High

Low

Pull

Low

Examples: Adura Tech, Aurora Biofuels, CommandCAD, Euclid Media, Fluxion Biosystems, MediFuel, NanoRay, nanoPrint

Drivers: Great Research

MBAs, Biz plan comp, OTL mrktg

IP: Many obtain exclusive license to

improve biz plan & attract investors Some ignore or abscond with IP

Comments: Pathway with highest growth rate MBAs are the campus’s EIRs

Opportunistically byentrepreneurs (e.g. MBA students)that periodically scour campus

Mined

Page 33

Commercializing: Morphed, Mined, Milked, Marketed

PushHigh

High

Low

Pull

Low

Examples (that licensed IP): Analog Devices, Ecoprene (XL Tech), Google, Honeywell, Intel, Berkeley Bionics (first morphed then milked)

Drivers: Great sponsored research with optimized

terms (i.e. 1st access, NERF, open source, etc)

Off-campus corporate labs (i.e. BWRC, Intel, Cadence, Yahoo, Starkey, etc)

IP: Some jointly own IP Some obtain a license to legally use

IP or thwart competitors Some ignore or abscond with IP

Systematically out of researchby corporate research sponsor

Milked

Page 34

Commercializing: Morphed, Mined,

Milked, Marketed

PushHigh

High

Low

Pull

Low

Examples: Arkal Medical, Cisco, ClimateCooler, FuelFX, Luminus Devices, Honeywell, Microchip Biotech, Renovis, Silicon Basis, Solexel, Vitesse, 3M

Drivers: Great Research Marketing (i.e. IP Licensing offices, University PR

programs, Faculty pubs & ppts, Patent pubs, etc)

IP: Most obtain exclusive license to stay

legal, improve BP, attract investment, or thwart competitors

Some ignore IP or abscond with IP

Comments: Didn’t get morphed, milked or mined because tech or market too nascent when invented

Methodically to industry by campus faculty & staff (e.g. PI, PR, OTL)

Marketed

04/11/23

Page 35

Locating: 4 Steps* Into Community

* Simplified Model

Locating into the Community

Baby Step(Free space:

Incubator, Garage, etc)

Virtual Step(Dorm, Apt,

Cafe, Libe, etc)

Big Step(Pay for space)

Big Leap(Pay for spacewith growth)

04/11/23

Page 36

Locating: Competitive Attributes

Locating into the Community

Baby Step(Free space:

Incubator, Garage, etc)

Capital(easy access to VC)

Collaboration(with UCB people)

Virtual Step(Dorm, Apt,

Cafe, Libe, etc)

Big Step(Pay for space)

Big Leap(Pay for spacewith growth)

Commute(finish degree/relocate)

Cost

Colleagues(recruiting, support services)

Credibility(proximity to known corps)

Coolness(of space & hood)

Customers(proximity / density)

Capacity(appropriate space)

Change(inertia of relocating)

Berkeley(campus vicinity)

04/11/23

Page 37

Locating: Baby Step

Locating into the Community

Baby Step(Free space:

Incubator, Garage, etc)

Virtual Step(Dorm, Apt,

Cafe, Libe, etc)

Capital(easy access to VC)

Collaboration(with UCB people)

Commute(finish degree/relocate)

Cost

Credibility(proximity to known corps)

Coolness(of space & hood)

Customers(proximity / density)

Capacity(appropriate space)

Change(inertia of relocating)

Colleagues(recruiting, support services) Leverage

these existing advantages

EBGC(including Berkeley)

04/11/23

Page 38

Locating: Big Step

Capital(easy access to VC)

Collaboration(with UCB people)

Commute(finish degree/relocate)

Cost

Credibility(proximity to known corps)

Coolness(of space & hood)

Customers(proximity / density)

Capacity(appropriate space)

Change(inertia of relocating)

Colleagues(recruiting, support services)

Locating into the Community

Baby Step(Free space:

Incubator, Garage, etc)

Virtual Step(Dorm, Apt,

Cafe, Libe, etc)

Big Step(Pay for space)

Establish these potentialadvantages

Berkeley(campus vicinity)

Leverage these existing advantages

Bay Area & beyond especially San Francisco & Silicon Valley;but including EBGC

EBGC(including Berkeley)

04/11/23

Page 39

Locating: Big Leap

Capital(easy access to VC)

Collaboration(with UCB people)

Commute(finish degree/relocate)

Cost

Credibility(proximity to known corps)

Coolness(of space & hood)

Customers(proximity / density)

Capacity(appropriate space)

Change(inertia of relocating)

Colleagues(recruiting, support services)

Locating into the Community

Baby Step(Free space:

Incubator, Garage, etc)

Virtual Step(Dorm, Apt,

Cafe, Libe, etc)

Big Step(Pay for space)

Big Leap(Pay for spacewith growth)

Can’t expect advantages with these attributes, but need to be competitive with alternatives

The only way to establish an advantage is to be the incumbent & minimize CHANGE

Berkeley(campus vicinity)

Establish these potentialadvantages

Leverage these existing advantages

04/11/23

Page 40

University-Driven Local Economic Development

• Michael Cohen

• UC Berkeley, Office of Intellectual Property & Industry Research Alliances (IPIRA)

• Mcohen@Berkeley.edu

• IPIRA.Berkeley.edu

• 510-643-7201

Within a 45 Minute CommuteIn

co

me

Younger Family Mature

Midlife Success (79)

Young Achievers (294)

Accumulated Wealth (74)

Affluent Empty Nests (280)

Young Accumulators

(137)

Conservative Classics (117)

Cautious Couples (28)

Mainstream Families (29)

Striving Singles (6) Sustaining

Families (66)Sustaining

Seniors (55)

Y1

Y2

Y3

F1

F2

F3

F4

M1

M2

M3

M4

The Aquatic Park Commute Shed is Wealthy & Educated

Five County Bay Area – Industry Size, Growth & Concentration

5 County Quad

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

-0.20 0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80

Construction

Education and HealthServicesFinancial Activities

Government

Information

Leisure and Hospitality

Manufacturing

Natural Resources andMiningOther Services (exceptPublic Administration)Professional andBusiness ServicesTrade, Transportation,and Utilities