Weekly Report – Why L.A. Matters – May 9, 2016
Los Angeles is investing in itself; Now is the time to invest in Los Angeles
The future is happening in Los Angeles today. From cutting edge engineering and technical innovation – rockets, cars, and medical research – to complex public policy issues – affordable housing, congestion and inequality. These opportunities and challenges are as broad and diverse as the region’s population, placing L.A. at the forefront of a global economy that must find ways to generate economic growth, quality jobs and a sustainable planet.
Despite a popular perception that L.A. is unfriendly to business, skilled talent continues to migrate to the region from all around the world, and hundreds of thousands of students continue to attend its institutions of higher learning. More engineering graduates are being produced in L.A. than any other part of California.
To match this growing ambition and to stimulate the creation of more quality jobs, L.A. is investing and retrofitting its aging infrastructure. More than $50 billion will be invested throughout the next 25 years and, in the last five years alone, it has already invested $4 billion in modernization projects at the Los Angeles International Airport, with $8 billion more to come. Two and a half billion has been spent on improvements to the Port of L.A. and $14 billion is currently being spent on new transit lines, buses and highway improvements throughout the region. And this doesn’t include the $120 billion in direct spending in transit projects if voters agree on a 1-cent transit sales tax measure proposed for the November 2016 ballot. These projects are improving the quality of life for everyone living in, or visiting, the region, in addition to supporting L.A.’s leading role as a facilitator of goods to the rest of the nation and globe.
Secondly, L.A. is looking to leverage its dense population to grow its globally competitive and knowledge-based industries, including technology, design, entertainment and biotech, to name a few. These industries thrive on the clustering of workers who share ideas and expertise and succeed because of a collaborative network that includes private sector capital, public agencies, universities, corporations and skilled workers.
That is why L.A. matters. Whether through invention, engineering and discovery, it is once again embracing its heritage and leveraging its unique location at the center of the world’s global economy. Now is the time to invest in L.A. and below are three great opportunities:
- Today well over 40 percent of humanity is online. BCG, a consultancy firm, reckons that the Internet will account for 5.3 percent of GDP of the world’s 20 biggest economies this year, or $4.2 trillion. The Internet of Things is also a $340 billion market, and over the next four years it will total almost $500 billion. We have only utilized 5 percent of the capacity of the Internet at a time when the cost of all technologies associated with the Internet of Things has dropped logarithmically over the past 10 years. Bandwidth is 40 times greater today than it was 10 years ago and processing is down 60 times from 10 years ago. L.A.’s ecosystem is ground zero for investment opportunities linked to business, digital media and online commerce. Venture capital is taking notice and directing investments into technology and software in the region, more than three times the amount invested into L.A.’s other leading industries – media and entertainment. On the sustainability level, companies are using data from connected equipment – wind turbines, street lighting, cars, and buildings – to deliver new insights and create value around operational efficiency, increased productivity and new customer solutions. The results are huge in terms of opportunities to make money, and to make our lives better and more efficient.
- Humanity’s relationship with space is being reimagined in L.A. That means the sky is no longer the limit as technological advancements drive down costs and increase competition for commercial space activity. The most noticeable game changers are the development of reusable rockets, additive manufacturing and the repurposing of hardware first developed by aerospace companies for other industries. These innovations are creating good paying jobs (averaging $105,715) in L.A. More than 6,000 jobs alone, in the past decade, are linked to the production of guided missiles and space vehicles. On the funding side, government no longer has the resources to drive this sector and only a handful of entrepreneurs are going after what is now being called “new space,” which some analysts expect to be a $600 billion industry by 2030. One great example is the development of smaller satellites that have the capability of providing high-speed Internet access and GPS tracking that generates data that will improve how we monitor and manage our natural resources, measure agricultural yields, or aid first responders after natural disasters.
- Covering 72 percent of the Earth and supplying half of its oxygen, the ocean is our planet’s life support system. It regulates our weather and climate and feeds 3.5 billion people as a primary source of protein. A recent report showed that global carbon emissions are lowering pH and reducing oxygen levels in the Pacific Ocean. To counter these changes entrepreneurs in L.A. are creating new ventures, with the support of the National Oceanic and Atmospheric Administration’s National Shellfish Initiative and the University of Southern California, to increase commercial shellfish aquaculture, while improving ecosystem health. Aerospace is also developing advanced robotic probes to help explore parts of the ocean unwelcoming to humans, which will stimulate further research and business opportunities linked to the development of products, services and jobs aligned with ocean robotics, mobile sensing, algae fuels and offshore renewable energy.
The world moves forward because people keep coming up with new ways of doing things. With the right investments today L.A. is helping not only itself, but the world in which we all live.