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HomeMy WebLinkAbout2013-04-16; City Council; 21187; 2013 Carlsbad Business Survey ReportCITY OF CARLSBAD - AGENDA BILL AB# 21.187 2013 CARLSBAD BUSINESS SURVEY REPORT MTG. 4/16/13 2013 CARLSBAD BUSINESS SURVEY REPORT DEPT. CED DEPT.DIRECTOR CITY ATTY. CITY MGR. RECOMMENDED ACTION: Receive and file a report on the 2013 Carlsbad Business Survey report. ITEM EXPLANATION: ^ ' ^. The city's Economic Development division, in collaboration with BW Research Partnership, conducted the first business survey of Carlsbad businesses in December 2012 and January 2013 The survey sought to measure Carlsbad's business climate, determine bamers to growth and provide baseline information for future business climate surveys. The report also profiles Carlsbad's wealth creating industry clusters. Over 200 respondents answered the survey, either online or by telephone. BW Research Partnership supplemented the survey instrument with outside research on industry clusters and business profiles as well as leadership interviews with executives in the life sciences industry. The results ofthe survey show an improving economy, a need for strong communication with the business community, areas for potential improvement, and demonstrate community support for an institute of higher education in Carlsbad. FISCAL IMPACT: Receiving and filing the report does not have a fiscal impact. ENVIRONMENTAL IMPACT: . „ Pursuant to Public Resources Code section 21065, this action does not constitute a project within the meaning of CEQA in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. EXHIBITS: 1. 2013 Carlsbad Business Survey DEPARTMENT CONTACT: Kathy Dodson, 760-602-2744, kathv.dodson@carlsbadca.qov FOR CITY CLERKS USE ONLY. COUNCIL ACTION: APPROVED DENIED WITHDRAWN AMENDED • • • • CONTINUED TO DATE SPECIFIC • _ CONTINUED TO DATE UNKNOWN • RETURNED TO STAFF P COUNCIL RECEIVED THE ^ REPORT/PRESENTATION OTHER - SEE MINUTES • EXHIBIT 1 ^^^^^ n ^ V City 0 Carlsbad Business Survey Report February 2013 bv^ ii« is> ii« /\. tx w ri. PARTNERSHIP 2725 JEFFERSON STREET, SUITE 13, CARLSBAD CA 92008 50 MILL POND DRIVE, WRENTHAM, MA 02093 T (760) 730-9325 F (888} 457-9598 bwresearch.com H twitter.com/BW Research facebook.com/bwresearch [ij z Business Survey Report City of Carlsbad TABLE OF CONTENTS Table of Contents List of Figures List of Tables Executive Summary 1 Overall Indicators for the Business Community 5 Carlsbad as a Place to Do Business 5 Perception ofthe Business Climate 7 Confidence in City Government to Impact the Business Climate 9 Hiring Expectations over the Next Year 12 Economic Development Information from the City and Satisfaction 14 Importance of Industry Clusters 16 Action Sports Manufacturing 19 Life Sciences 20 Cleantech 21 Entertainment and Hospitality 22 Information and Communications Technologies (ICT) 23 Opportunity and Assessment in Carlsbad's Business Community 24 Appendix A: Secondary Data on Universe of Carlsbad Businesses and Sun/ey Data Not Previously Presented A-1 Universe of Carlsbad Businesses A-1 Additional Survey Data A-3 Appendix B: Survey Methodology B-1 Secondary Research ^ B-1 Primary Research B-5 Appendix C: Survey Toplines (n=223) C-1 bw' RESEARCH PARTNERSHIP Business Survey Report City of Carlsbad LIST OF FIGURES Figure 1: Rating for the City of Carlsbad as a Place to Do Business 5 Figure 2: Perception of Business Climate in Carlsbad 7 Figure 3: Confidence in City Government to Impact Business Climate 10 Figure 4: Hiring Expectations for the Next 12 Months 12 Figure 5: Hiring Expectations forthe Next 12 Months by Business Size 12 Figure 6: Received Economic Development Information or Updates from Carlsbad and Satisfaction with Information Received 14 Figure 7: City of Carlsbad Industry Clusters by Employment, Location Quotient (LQ) and Growth 19 Figure 8: Main Reasons Company Located in Carlsbad 24 Figure 9: Value of a University or Institution of Higher Education Located in the City of Carlsbad 25 Figure 10: Satisfaction with Attributes of Carlsbad's Business Climate 27 Figure 11: Location of Customers and Suppliers & Vendors 28 Figure 12: Secondary Data - City of Carlsbad Size of Businesses A-1 Figure 13: Secondary Data - California Size of Businesses A-1 Figure 14: Secondary Data - Industry Breakdown by Number of Businesses A-2 Figure 15: Number of Carlsbad Locations A-3 Figure 16: Number One Thing City of Carlsbad Could Do to Improve Business Climate A-4 Figure 17: Number of Years Located in Carlsbad A-5 Figure 18: Number of Employees at Carlsbad Location(s) A-6 Figure 19: Primary Focus of Business A-7 Figure 20: Change in Employment over the Past Three Years A-8 Figure 21: Expectations for Physical Space in Carlsbad over the Next 12 to 24 Months A-9 LIST OF TABLES Table 1: Overview of Project Methodology B-1 Table 2: NAICS Codes Used to Define Industry Clusters B-2 [bw^ RESEARCH PARTNERSHIP II Business Survey Report City of Carlsbad EXECUTIVE SUMMARY The City of Carlsbad's Economic Development Department commissioned BW Research Partnership, Inc. (BW Research) to develop a profile of local businesses and assess the business climate within the city. As part of the research over two hundred businesses with at least one location in Carlsbad completed a survey. BW Research offers the following key findings from the 2013 research of Carlsbad Businesses: IVIost businesses indicated Carlsbad was an excellent or good place to do business. • Just under nine out of ten (87%) Carlsbad businesses surveyed indicated the city was an excellent (39%) or good (48%) place to do business. At the other end of the spectrum, only three percent of responding businesses indicated that Carlsbad was either a poor (2%) or very poor (1%) place to do business. Businesses were more likely to be optimistic about the future • Just over one third (35%) of responding businesses indicated the business climate in Carlsbad was getting better and only six percent indicated it was getting worse. Three out of four Carlsbad businesses were confident city government's decisions to improve the business climate. • Seventy-five percent of Carlsbad business respondents indicated they were either very (25%) or somewhat (50%) confident in city government to make decisions to positively affect the local business climate. Quality of life and proximity to vendors are the greatest areas of satisfaction; regulatory climate and transportation systems are areas of greatest dissatisfaction. • The three issues tested with the highest levels of satisfaction included; quality of life (96% satisfaction), access to relevant vendors and suppliers (82% satisfaction), and access to clients and customers (81% satisfaction). • The three issues tested with the highest levels of dissatisfaction included; regulatory climate (19% dissatisfaction), local roads and transportation systems (11% dissatisfaction), and ability to find qualified entry to mid-level employees (10% dissatisfaction). Condusions and Recommendations Importance of Communication • Overall just under forty percent (37%) of respondents indicated they had received economic development information from Carlsbad. The businesses that received RESEARCH ^ PARTNERSHIP 3 Business Survey Report City of Carlsbad economic development information from the City of Carlsbad were almost twice as likely to indicate the business climate was getting better (48% vs. 27%) compared to those businesses that did not receive economic development information from the City or were not sure if they had received it. • Businesses that received economic development information from the City of Carlsbad, were also more likely to indicate confidence in City government to make decisions that positively impact the business climate (81% vs. 71%) compared to those businesses that did not receive economic development information from the City or were not sure if they had received it. These results indicate that the economic development information coming for the City is having a positive impact upon businesses' economic outlook. The City should consider strategies to increase its communication efforts to local businesses and continue to differentiate itself from those Carlsbad business organizations that are focused on providing information for their members or for specific industries. Educational Opportunities Results of the survey show that approximately two-thirds of businesses in the City would value a university or institution of higher education within the City boundaries. Overall, businesses saw this new university offering business, marketing and/or entrepreneurship courses or relatively technical courses that would support industry research and high- skilled vocational training in renewable energy, ICT (Information and Communications Technologies) and other applied sciences including engineering and health sciences. Respondents from the executive interviews also discussed the importance of local middle and high school science and mathematics programs. Given the support of the business community for the university or institution of higher education, the City should continue to move forward with these plans while also recognizing the importance of connectivity with the science and mathematics curricula at the local high schools. Regulatory Climate Of the business climate issues we typically include in employer surveys, regulatory climate is most often the item that respondents are dissatisfied with. The 19 percent of respondents that indicated dissatisfaction with the regulatory climate were asked as a follow up, if there was a specific issue of concern and how they suggested responding to it. These are some of the paraphrased responses; • Allow more business signage in and around business locations • Make it easier and more streamlined to get permits • Advocate on behalf state and national legislators that represent Carlsbad business interests RESEARCH PARTNERSHIP Business Survey Report City of Carlsbad Transportation The 11 percent of respondents that indicated dissatisfaction with the local roads were asked as a follow up, if there was a specific issue of concern and how they suggested responding to it. These are some of the paraphrased responses; • Not enough public transit options for Carlsbad employees • Need more bus routes from the Coaster • Reduce traffic congestion, increase traffic flow and improve traffic light timing Entry and mid-level employees The 10 percent of respondents that indicated dissatisfaction with their ability to find qualified entry to mid-level employees were asked as a follow up, if there was a specific issue of concern and how they suggested responding to it. These are some of the paraphrased responses; • More moderate income housing • Cost of living is high • Finding qualified applicants means having people commute from longer distances Strengths of Carlsbad business community The City boasts a concentration of export-oriented, innovation driven businesses in key industry clusters including Action Sports, ICT (Information and Communications Technologies), CleanTech and Life Sciences. The employers in these four Carlsbad industry clusters, tend to be larger businesses with wages well above the local and regional average. These businesses not only provide high wages they generate a considerable multiplier effect on local employment and tax revenue. Recent research by economist Enrico Moretti^ reveals that for every job in an innovation based export- oriented business, like the four industry clusters in Carlsbad, approximately five additional jobs are created. Any strategies that increase local employment in these high- paying industry clusters is likely to have a significant multiplier effect on businesses throughout the Carlsbad economy. Background and Methodology Overview For this study, BW Research conducted an evaluation of businesses within the City of Carlsbad based on information from SANDAG's recent industry cluster research, InfoUSA, EMSI, and California's Employment Development Department. The study also included a stratified telephone and online survey, which was completed by 223 Carlsbad businesses. ^ Research is taken from the New Geography of Jobs, by Enrico Moretti 2012. RESEARCH PARTNERSHIP 1 Business Survey Report City of Carlsbad The survey research included an oversample of employers from Carlsbad's five industry clusters, which include; 1. Action Sports Manufacturing cluster includes firms that are engaged in the design and production of golf club, surfboard, diving, and other recreational goods as well as the apparel and accessories that is closely tied to these products. 2. Life Sciences cluster combines two of SANDAG's industry clusters. Biomedical Devices and Products which includes the research, design, and production of medical devices and Biotechnology and Phannaceuticals which includes research and development related to biological technologies as well as the manufacturing of medicinal and diagnostic substances. 3. Cleantech cluster includes firms that are engaged in renewable energy, energy efficiency, and energy storage. 4. Entertainment & Hospitality cluster includes hotels, transportation services, and restaurants, as well as entertainment attractions such as theme parks (LEGOLAND), golf courses, and country clubs. 5. Information, Communications, & Technologies (ICT) cluster includes communications, computer and electronics, and software industries. As a follow-up to the quantitative survey, two qualitative executive interviews were completed with decision makers from Carlsbad's life sciences cluster to gain a deeper understanding of how local businesses perceive some of the issues identified in the quantitative survey results and how they relate specifically to the life sciences industry. RESEARCH 4 PARTNERSHIP Business Survey Report City of Carlsbad OVERALL INDICATORS FOR THE BUSINESS COMMUNITY CARLSBAD AS A PLACE TO DO BUSINESS Eighty-seven percent of Carlsbad businesses surveyed provided a positive rating for the City of Carlsbad as a place to do business, with 39 percent rating it as "excellent" and 48 percent "good." Eight percent of businesses provided a neutral rating, three percent a negative rating, and three percent were not sure or declined to state. Figure 1: Rating for the Cttv of Carlsbad as a Place to Do Business Excellent Good 39.0% 47.5% Fair 8.1% Poor 1.8% Very poor I 0.9% DK/NA 20% 40% 60% 80% Firms with two or more Carlsbad locations provided a higher rating for Carlsbad as a place to do business than firms with one location (97% positive vs. 85%). Firms who have been in Carlsbad more than 20 years were the most likely to provide a positive rating (96%) and in particular, an excellent rating (51%). As one would expect, firms who reported a decline in employment at their Carlsbad location(s) over the past three years were less likely to provide a positive rating (77%) than those who grew (91%) or stayed the same (89%). There was no difference in overall positive ratings by difficulty finding qualified professional and technically skilled applicants; however, those reporting little to no difficulty were much more likely to provide an "excellent" rating. There was a difference in overall ratings by satisfaction with their ability to recruit high-skill talent and find qualified entry to mid-level employees (with those "very satisfied" providing much higher "excellent" and overall positive ratings). Examining the relationship between this metric and others questions, ratings were most strongly correlated (.43 to .49) with confidence in city government to make decisions that impact the business climate, satisfaction with the regulatory climate, satisfaction with information and economic development from the City of Carlsbad (among those who had received information), and satisfacfion with organizations to support economic development and entrepreneurship. RESEARCH PARTNERSHIP Business Survey Report City of Carlsbad • When asked to rate Carlsbad as a place to do business, firms in the Action Sports cluster were the most posifive, with all firms rafing Carlsbad as "excellent" or "good" (n=8, 100%). Life Sciences (n=15, 93%) and Cleantech (n=12, 92%) also provide above average rafings. Entertainment and Hospitality firms (n=31, 87%) provided a rafing in line with the average across all firms, whereas ICT firms provided a below average rafing (n=25, 80%). Overall, rafings were comparable among those in one of the five clusters versus those not in one of the clusters (88% positive vs. 86%). Please note for all individual industry cluster survey response analyses throughout this report: Although the survey sampling plan included a focus on firms in the five industry clusters, the sample sizes within three ofthe five clusters were less than 25 respondents - which is the minimum for assuming a normal distribution. As such, caution should be utilized when generalizing the results for Action Sports (n=8), Cleantech (n=12), and Life Sciences (n=15). RESEARCH PARTNERSHIP 6 Business Survey Report City of Carlsbad PERCEPTION OF THE BUSINESS CLIMATE Thirty-five percent of businesses surveyed perceive the business climate in Carlsbad to be "getting better" and 52 percent feel it is "staying about the same." Only six percent view the business climate in the city as "getting worse" and seven percent of respondents were not sure or declined to provide a response to the quesfion. Figure 2: Perception of Business Climate in Carlsbad Getting worse 6.3% DK/NA 6.7% Firms with one Carlsbad location were more likely than those with two or more to perceive the Carlsbad business climate as "staying about the same" (55% vs. 35%). The plurality of firms with two or more locafions viewed it as "getting better" (42% vs. 34% among those with one locafion) and were also more than twice as likely to view it as "getfing worse" (13% vs. 5%). Firms that had been in Carlsbad for more than 20 years (43%) or five years or less (39%) were more likely to have a positive outlook ("getting better") as compared with those that had been in the city for a length in between (29%). Perceptions of the business climate were correlated with growth over the past three years as well as their outlook for growth over the next year. Firms that had increased the number of employees at their Carlsbad location(s) over the past three years (46% "getting better) as well as those that expected to grow over the next year (42%) were the most posifive. Firms that had received economic development informafion or updates from the City of Carlsbad were more than twice as likely to perceive the business climate as "getfing better" than those who had not received informafion (48% vs. 23%). Examining the relafionship between this metric and others survey questions, ratings were most strongly correlated (.22 to .29) with rafings for the City of Carlsbad as a place to do business, safisfaction with organizations to support economic development and entrepreneurship, confidence in city government to impact the climate, and satisfaction with informafion and economic development from the City of Carlsbad (among those who had received information). RESEARCH PARTNERSHIP Business Survey Report City of Carlsbad Firms in one of the five industry clusters had a more posifive outlook for the City of Carlsbad business climate than those firms not in one of the five clusters (i.e., the percentage indicating it was "getting better"). Firms in the Action Sports cluster (n=8, 63% "getting better") and Entertainment and Hospitality cluster (n=31, 42%) were the most posifive. RESEARCH PARTNERSHIP 8 IP Business Survey Report City of Carlsbad CONFIDENCE IN CITY GOVERNMENT TO IMPACT THE BUSINESS CLIMATE Three out of four businesses surveyed indicated they are confident in Carlsbad city government to make decisions that positively affect the local business climate, with a quarter "very confident" and the majority "somewhat confident." Ten percent of respondents reported they are not confident in Carlsbad city government to posifively impact the business climate and 15 percent were not sure or declined to state. Figure 3: Confidence In Citv Government to Impact Business Climate Very confident Somewhat confident 24.7% 50.2% Somewhat unconfident 8.1% Very unconfident ffl 2.2% Not sure or DK/NA 14.8% 0% 20% 40% 60% 80% • Ninety-six percent of firms that had been in Carlsbad more than 20 years indicated they are confident (and 43% are "very confident") in Carlsbad city government to make decisions that posifively affect the local business climate. • Examining the relafionship between this metric and others quesfions throughout the survey, ratings were most strongly correlated (.43 to .51) with satisfacfion with organizafions to support economic development and entrepreneurship; rafings for the City of Carlsbad as a place to do business; safisfacfion with the regulatory climate, including zoning, permitfing, local regulations and related issues; and satisfaction with access to relevant vendors and supplies. • Compared with those not classified into one of the five clusters, firms in one of the five industry clusters reported a higher level of confidence in Carlsbad city government to make decisions that positively affect the local business climate (70% vs. 81%). However, this difference was driven by differences in not sure and don't know responses among firms not in a cluster. The percentage "unconfident" was comparable among the two groups. • Among the five clusters, Acfion Sports (n=8, 100% confident) and Cleantech (n=12, 92%) reported the highest confidence levels. RESEARCH PARTNERSHIP 9 Business Survey Report City of Carlsbad HIRING EXPECTATIONS OVER THE NEXT YEAR Thirty-five percent of businesses expect to have more workers at their Carlsbad locafion(s) 12 months from the time ofthe survey, resulfing in an anticipated growth rate of 4.3 percent which is a marked change from the -2.8 percent reported by respondents over the past three years. Fifty-eight percent of firms expect to maintain current employment levels over the next year, three percent expect to have fewer total employees, and four percent were not sure or declined to state. Figure 4: Hiring Expectations for the Next 12 Months Fewer 3.1% DK/NA 4.5% Figure 5: Hiring Expectations for the Next 12 Months bv Business Size 80% 60% 40% 20% 0% • 1 to 5 employees • 6 to 10 employees • 11 to 24 employees m25 to 49 employees USO or more employees CO 1 CO CO 00 i6 55 More Fewer Same number of employees Don't know/ Refused RESEARCH PARTNERSHIP 10 H Business Survey Report City of Carlsbad A higher than average percentage of firms with 50 or more employees in Carlsbad reported anticipafing "fewer" employees over the next year (9% vs. 3% average). Firms with one Carlsbad locafion were nearly three fimes as likely to anficipate having more employees 12 months from now as compared to firms with two or more Carlsbad locafions (38% vs. 13%). Firms with a primary focus on businesses (40% "more") or a combination of businesses and consumers (37%) were more likely to anticipate adding employees over the next year than those that focused just on consumers (28%). Companies that grew over the last three years were the most likely to report that they expect to continue growing in the next year (52% vs. 35% average). Firms in the Acfion Sports (n=8, 63%), Cleantech (n=12, 50%), and Life Sciences (n=15, 40%) clusters each had at least 40 percent of firms reporting that they expect to add more employees over the next year. In addifion. Life Sciences (n=15) and Acfion Sports (n=8) each reported growth by at least a quarter of firms over the past three years. Although there was no difference in 12-month hiring expectations over the next year among those in one of the clusters versus those not in a cluster, there was a difference in past growth. Firms within one of the five clusters were much more likely to have stayed the same over the past three years as compared to firms not in one of the clusters (59% vs. 48%), whereas a higher percentage of firms not in a cluster reported growth during the same fime period (28% vs. 19%). RESEARCH PARTNERSHIP 11 15 Business Survey Report City of Carlsbad ECONOMIC DEVELOPMENT INFORMATION FROM THE CITY AND SATISFACTION Thirty-seven percent of the businesses surveyed have received economic development informafion or updates from the City of Carlsbad. Among those, 87 percent were satisfied (36% "very satisfied") with the information received from the city on their economic development services and those programs related to supporting Carlsbad's businesses. Figure 6: Received Economic Development Information or Updates from Carisbad and Satisfaction with Information Received Very satisfied Somewhat satisfied Somewhat dissatisfied Very dissatisfied DK/NA 36.1% 50.6% n 3.6% 0.0% 9.6% 0% 20% 40% 60% 80*M • Much higher than the 37 percent average, the majority of businesses (51 %) that have been in Carlsbad for more than 20 years reported receiving economic development information or updates from the City of Carlsbad. • Firms that decreased their Carlsbad employment over the past three years (43%) were more likely to have received informafion than firms that had grown (37%) or stayed the same (35%). • Examining the relationship between safisfacfion among those who had received information and updates from the City of Carlsbad and other survey questions revealed that ratings were most strongly correlated (.44 to .50) to satisfaction with access to relevant vendors and suppliers, rafings for the City of Carlsbad as a place to do business, satisfacfion with local roads and transportation system, and satisfacfion with the ability to find qualified entry to mid-level employees. • Overall, there was no difference in the percentage of firms reporting that they have received economic development information or updates from the City of Carlsbad among those in one of the five industry clusters versus those not in a cluster (37% among each group). However, when the five clusters are examined separately, firms within the Entertainment and Hospitality cluster (n=31, 42%) were the most likely to reported having received information whereas those in the Life Sciences cluster (n=15, 27%) were the least likely. RESEARCH PARTNERSHIP 12 Business Survey Report City of Carlsbad IMPORTANCE OF INDUSTRY CLUSTERS Industry clusters represent a comprehensive way of identifying and evaluating related industries within a given area. The process of idenfifying and examining clusters is based not only on the goods and services that employers are engaged in, but more important understanding the economic relafionships that exist between vendors, suppliers, and customers who are using related products and services. The firms within an industry cluster typically share common needs for talent, human capital, technology, and infrastructure. Most industry clusters are export-oriented driving wealth creation by bringing in customers and revenue from outside the region rather than being limited to those customers that just live within the area. The emphasis on export-oriented clusters not only expands the universe of potenfial customers but also diversifies the economy and provides greater opportunity for growth and a hedge against regional economic decline when some ofthe population-serving industries are negatively impacted. Lastly and potentially most important, the growth in industry clusters will typically have a large mulfiplier effect, increasing employment and business opportunifies for all types of businesses within a given community and/or region. According to the San Diego Associafion of Governments' (SANDAG) December 2012 report: Traded Industry Clusters in the San Diego Region:^ Traded industry clusters are groups of interrelated, export-oriented industries that bring new money into the region. Industries within an industry cluster have business transactions with one another, and thus are interdependent. Cluster companies often participate in local industry associations, fostering collaboration and the exchange of knowledge. Companies within a cluster also compete with each other for market share, which drives innovation and productivity. Companies within clusters tend to be among the region's leaders in research and development funding, patent awards, and other key indicators of innovation. Many ofthe clusters also pay high wages, although some do not. All clusters are economic drivers for the region because they are export-oriented. San Diego's regional traded clusters were first identified as a result ofthe 1998 Regional Economic Prosperity Strategy (REPS), which was developed to address the recession and economic restructuring ofthe early 1990s. Originally, the clusters were determined by a committee of local industry and economics experts. The current method relies both upon committee input and a methodology based on sound principles and practices that can be replicated for other regions, minimizing the subjectivity ofthe committee-based approach. Industry clusters are different from traditional sector employment because the clusters focus on specialized industries as well as buyer and supplier linkages that are unique to a region's economy. Viewing the regional economy through the perspective of clusters is important when describing the fast-paced, international economy of today. Elected officials, planners, and local residents want information about biotechnology and cleantech, for example. It is not possible to obtain this level of detail using traditional industry sector reporting. Industry cluster analysis is a useful tool to look deeply at the structure of the economy and help determine what direction it will take in the future. As technology and industries change, new cluster groups may come into existence. Excerpted from page 1: Traded Industry Clusters in the San Diego Region.. SANDAG, December 2012. RESEARCH PARTNERSHIP 13 n Business Survey Report City of Carlsbad K^Xl^tT* SANDAG focused on 13 industry clusters in its latest report. Among those, six clusters^ are most relevant to the City of Carlsbad as they either already have a relafively high concentrafion of employment within Carlsbad or they offer an industry that has the opportunity to see considerable growth within the next three to ten years. These industry clusters relevant to the City of Carlsbad, include; 1. Action Sports Manufacturing cluster includes firms that are engaged in the design and producfion of golf club, surfboard, diving, and other recreafional goods as well as the apparel and accessories that is closely tied to these products. 2. Life Sciences cluster combines two of SANDAG's industry clusters, Biomedical Devices and Products which includes the research, design, and production of medical devices and Biotechnology and Pharmaceuticals which includes research and development related to biological technologies as well as the manufacturing of medicinal and diagnosfic substances. 3. Cleantech cluster includes firms that are engaged in renewable energy, energy efficiency, and energy storage. 4. Entertainment & Hospitality cluster includes hotels, transportation services, and restaurants, as well as entertainment attractions such as theme parks (LEGOLAND), golf courses, and country clubs. 5. Information, Communications, & Technologies (ICT) cluster includes communicafions, computer and electronics, and software industries. It should be noted that each ofthe industry cluster definifions are generally consistent with SANDAG; a few minor revisions and addifions were made after reviewing the database of employers with the City of Carlsbad. Carlsbad's five industry clusters represent approximately one in every seven businesses in Carlsbad while accounting for just over 40 percent of all jobs in the city. And with the exception of Entertainment and Hospitality, provide average annual eamings per worker that are just over one-third higher than the city's average. The chart on the following page shows the key clusters and their projected growth over the next three years (2013 to 2016). The size ofthe bubbles indicates relative size based on employment to other industry clusters in the chart. The Entertainment & Hospitality cluster is the largest with 11,941 employees in the City of Carlsbad. The cluster share of local employment compared to its share of national employment is measured on the vertical axis by its location quofient (LQ). A location quotient of 1.0 indicates equal cluster share of employment between a region and the nafion. The Acfion Sports Manufacturing cluster has the largest location quofient of 49.58, which means that it is nearly 50 fimes more concentrated in the City of Carlsbad when compared to the national average. In fact, each ofthe five industry clusters has a locafion quofient greater than 1.0. ^ The pages to follow present information on five clusters. Two of SANDAG's clusters - Biomedical Devices and Products & Biotechnology and Pharmaceuticals - have been combined into Life Sciences. RESEARCH ^- PARTNERSHIP ' ^ Business Survey Report City of Carlsbad Finally, the horizontal axis displays projected growth for the three year fime frame between 2013 and 2016. Positive growth is expected for four industry clusters (Cleantech: 13%; Life Sciences: 11%; ICT: 9%; and Entertainment & Hospitality: 7%), with only Action Sports Manufacturing projected to experience negative growth (-5%). Figure 7: Citv of Carisbad Industrv Clusters bv Employment Location Quotient (LQ) and Growth^ 9.0 O _i E 5.0 CM 6% 8% 10% 12% 14% 2013-2016 % Change Employment 0(1) Action Sports Manufacturing 0(2) Life Sciences ® (3) Cleantech 0(4) Entertainment & Hospitaiity 0(5) Information & Communications Technologies (ICT) Source: EMSI Complete Employment 2012.4. bw' RESEARCH PARTNERSHIP 15 Business Survey Report City of Carlsbad ACTION SPORTS MANUFACTURING Acfion Sports Manufacturing, more than any other cluster examined, identifies Carlsbad's unique business strengths when compared to the nafional economy. This cluster has seen considerable growth over the last ten years, but is also expected to decline in employment over the next three years. This cluster has approximately 47 firms and 2,773 jobs in Carlsbad. The average annual earnings per worker in this cluster is approximately $91,020. With a high concentrafion of golf club, surfboard, diving, and other recreafional goods manufacturing in the region, it is clear that this industry is a highly export-oriented economic driver. This cluster also is strongly associated with sporting and recreafional goods wholesalers. Based on the vast amounts of sunshine, close proximity to the ocean, and the lifestyle of southern California, the Acfion Sports Manufacturing cluster has been a steady presence in the region. Excerpted from page 3: Traded Industry Clusters in the San Diego Region, SANDAG, December 2012. LIFE SCIENCES For our purposes, two of SANDAG's clusters - Biomedical Devices and Products & Biotechnology and Pharmaceuticals - have been combined into Life Sciences for examination in the City of Carlsbad. These two industry clusters are expected to see strong employment growth through 2016. The Life Sciences cluster has approximately 131 firms and 7,033 jobs in Carlsbad. The average annual earnings per worker in this cluster is approximately $128,722. Biomedical Devices and Products The Biomedical Devices and Products industry cluster consists primarily of firms producing surgical, medical, dental, opfical, and ophthalmic devices and products as well as laboratory applicafions. It also includes firms conducfing research and development acfivities. Most of the companies in this cluster consist of middle to smaller sized companies. Biotechnology and Pharmaceuticals The Biotech and Pharmaceuticals cluster primarily consists of research and development industries in fields related to chemical and biological technologies. This cluster also includes the manufacturing of medicinal and diagnosfic substances. It generally consists of middle to smaller sized companies as well as world-renowned research institutes. This Biotech and Pharmaceuficals cluster is currently a major regional economic driver with strong job growth and funding. Excerpted from page 5: Traded Industry Clusters in the San Diego Region., SANDAG, December 2012. RESEARCH PARTNERSHIP 16 Business Survey Report City of Carlsbad CLEANTECH Carlsbad's Cleantech businesses are expected to increase employment over ten percent by 2016 and confinue to grow in importance within the local and regional economy. The Cleantech cluster in Carlsbad has approximately 90 firms and 4,882 jobs. The average annual earnings per worker in this cluster is approximately $112,672. Due to the move toward more renewable energy products and services, this industry cluster has evolved from the Environmental Technology to the Cleantech industry cluster. Industries included in this cluster perform processes such as industrial products and semiconductor manufacturing (for solar panels); research and development; tesfing; and industrial and instrument manufacturing, as well as design, environmental, and technical consulfing services. Firms Included in this cluster specialize in energy efficiency (e.g., battery technologies, solar panels and related products, fuel efficient automobiles, and testing equipment); clean energy generafion (e.g., solar engineering, management and consulting services, and biofuels/biodlesel); and energy storage (e.g., battery technologies, biomass, biofuels, and smart electricity). Excerpted from page 6: Traded Industry Clusters in the San Diego Region, SANDAG, December 2012. ENTERTAINMENT AND HOSPITALITY Carlsbad's Entertainment and Hospitality cluster provides the largest number of jobs of the five Carlsbad clusters that were examined. The cluster has approximately 153 firms and 11,941 jobs in Carlsbad. The average annual earnings per worker in this cluster is approximately $25,567. San Diego has an internafional reputation as a tourist and convenfion center desfinafion. Visitors are not only drawn to the region's great amenifies, natural resources, and weather but also popular entertainment and attracfions. In previous reports, Travel and Hospitality and Entertainment and Amusement were reported as separate clusters. Because of their strong interrelafionship, these clusters have merged into one Entertainment and Hospitality cluster. Local hotel, transportafion services, and restaurants, which accommodate the region's visitors, account for the bulk of the travel and hospitality portion of the cluster, while world famous museums and zoos serve as major entertainment attracfions. Other entertainment attractions for the region include recreafional activifies, such as theme parks, golf courses and country clubs, athlefic events, race tracks, theatres, and numerous artists and performers. Overall, the Entertainment and Hospitality cluster brings many visitors and spending from outside the region. Excerpted from page 6: Traded industry Clusters in the San Diego Region, SANDAG, December 2012. RESEARCH PARTNERSHIP 17 Business Survey Report City of Carlsbad INFORMATION AND COMMUNICATIONS TECHNOLOGIES (ICT) The Informafion and Communicafions Technologies (ICT) represent a valuable employer in Carlsbad, with strong growth expectations and high wages. The ICT cluster has approximately 254 firms and 9,203 jobs in Carlsbad. The average annual earnings per worker in this cluster is approximately $114,561. The ICT industry cluster includes communications, computer and electronics, and software industries. These industries, reported separately in previous cluster reports, have strong interconnecfions resulfing in the emergence ofthe new ICT cluster. Firms in this cluster specialize in manufacturing radio and television broadcasfing and wireless communication equipment, audio and video equipment, semiconductors and associated products, computer and electronic components, and other communications equipment manufacturing. Likewise, many service-related industries support this cluster including engineering, custom computer programming, and software. Many companies in this cluster work on government and defense contracts as well as private commercial projects. Although this cluster contains many large globally recognized communicafions companies, it also includes a large number of smaller companies. Excerpted from page 8: Traded Industry Clusters in the San Diego Region, SANDAG, December 2012. RESEARCH PARTNERSHIP 18 Business Survey Report City of Carlsbad OPPORTUNITY AND ASSESSMENT IN CARLSBAD'S BUSINESS COMMUNITY This secfion ofthe research summarizes Carlsbad businesses' responses to quesfions that evaluated opportunities and a current assessment of specific components of Carlsbad's business community. Main Reasons Company Located in Carlsbad Early in the survey, respondents were asked to provide the main reasons their business located in Carlsbad. This was an open-ended quesfion, meaning respondents were not given any potential responses. As shown in the figure below, proximity to customers, collaborators, and vendors (35%) and having founders living in Carlsbad (34%) were the top reasons for locating within the City of Carlsbad. The quality of life in Carlsbad was also indicated by almost one in every six respondents. Figure 8: Main Reasons Companv Located in Carlsbad Proximity to customers, collaborators, and vendors Founders lived here Quality of life in Carlsbad Spun-off another company that was already here/ bought existing company Proximity to skilled workers/workforce Cost of conducting business Other 16.1% 13.5% 35.0% 33.6% 11.7% DK/NA 12.1% 0% 20% 40% 60% Locating in Carlsbad because the founders lived here was more likely among firms with one Carlsbad locafion and those with one to five employees. Locafing in Carlsbad due to its proximity to customer, collaborators, and vendors was more likely among firms with two or more locations and 11 to 99 employees in Carlsbad. bw" RESEARCH PARTNERSHIP 19 ^3 Business Survey Report City of Carlsbad Perceived Value ofa University or Institute of Higher Education Located in Carlsbad Later in the survey, respondents were asked about the value of a university or institute of higher learning being located in the City of Carlsbad. Almost two out of three businesses indicated that would be either "very valuable" or at least "somewhat valuable." Although their sample size was small in the survey (n=15). Life Sciences firms were the most likely to report that a university or institution of higher educafion in the City of Carlsbad would be "very valuable" to their firm (40%). Figure 9: Value of a Universitv or Institution of Higher Education Located in the Citv of Carisbad Very valuable 31.8% 1^ DK/NA 5.4% As a follow-up question, those respondents that indicated a university or institute located in Carlsbad would be very or somewhat valuable proposifion were asked to indicate what program or area of research they would like to see at the potential learning institufion. The top open-ended responses to this question included; 1. MBA, business/markefing or entrepreneurship (30%) 2. Renewable energy - solar, biofuel, etc. (10%) 3. ICT or computer science (9%) 4. Electrical or software engineering (8%) 5. Medical and/or health sciences (8%) 6. Engineering (other 7% - no single category over 2%). [bw] RESEARCH PARTNERSHIP 20 Business Survey Report City of Carlsbad Satisfaction with Specific Components of the Business Climate After respondents were asked their overall assessment of the city's business climate, they were asked about their safisfaction with specific components of the city's business climate. Figure 10: Satisfaction with Attributes of Carlsbad's Business Climate^ Quality of life Access to relevant vendors and suppliers Access to clients and customers 72.5% 23.9% 43.6% 38.1% 15.8% 40.4% 40.9% 16.3% Local roads and transportation system Ability to find qualified entry to mid-level employees 39.7% 1 40.6% • ii%| 30.0% m 46.0% 9%| Ability to recruit high skill talent Ability to network or interact with other high-level decision-makers in Carlsbad's business community Organizations to support economic development and entrepreneurship Access to capital Regulatory climate, including zoning, permitting, local regulations, and related issues 27.8% 47.0% 25.8% 1 42.1% 7% 22.2% 43.4% 23.1% 37.9% 28.4% 7%P 21.5% 1 35.5% 21.5% 17.0% s 0% 20% 40% 60% 80% 100% I Very satisfied d Somewhat satisfied ^Neither ^ Somewhat dissatisfied @ Very dissatisfied ^ Due to higher than average percentages of "Don't know/ no answer" responses for many items, those responses were filtered out ofthe analysis for this series. The high percentages are likely due to lack of direct experience with those services (please refer to Appendix C for full breakdown of responses). bw] RESEARCH PARTNERSHIP 21 Business Survey Report City of Carisbad Distnbution of Customers and Suppliers & Vendors Respondents were asked where their customers were primarily found, as well as their suppliers and vendors. As the figure below shows, just over half of businesses see their primary customers as local, but one fifth of respondents indicated that their primary customers are outside the United States. Please note that respondents were allowed to indicate more than one primary area for customers or suppliers and vendors so totals will equal more than 100 percent. Figure 11: Location of Customers and Suppliers & Vendors Local - Carlsbad & North County Regional - within Southern California Statewide - within California National - within the United States International - outside the United States Do not have suppliers or vendors Don't know 31.8% I 54.3% 34.5% 38.6% I 33.6% 37.7% I 20.6% 13.0% 0.0% l 2.7% 0.0% 1 0.9% • Customers • Suppliers and Vendors 0% 20% 40% 60% 80% Neariy two thirds (66%) of medium-sized firms identified their primary customers as local compared to under half (43%) of small firms making the same claim. Although a small sample size, Acfion Sports see just over one third (38%) of their primary customers as being located outside the United States. Large companies were less likely to identify local suppliers and vendors as their primary suppliers and vendors when compared to the average (12% vs. 32%). Eighty percent of Life Sciences firms reported that their primary suppliers and vendors were nafional compared to just 19 percent of Entertainment and Hospitality firms. [bw] RESEARCH PARTNERSHIP 22 Business Survey Report City of Carlsbad APPENDIX A: SECONDARY DATA ON UNIVERSE OF CARLSBAD BUSINESSES AND SURVEY DATA NOT PREVIOUSLY PRESENTED UNIVERSE OF CARLSBAD BUSINESSES The City of Carisbad is home to an esfimated 5,035 businesses® that employ approximately 86,560 individuals.^ Approximately three out of five businesses within Carisbad are small, with fewer than five employees. However, compared to California as a whole (18%), Carisbad (20%) has a relafively large portion of businesses that are either medium-sized (10 to 24 employees) or large (25+ employees). The average size of Carisbad businesses is 17.2 employees compared to 14.8 statewide. Figure 12: Secondary Data - Citv of Cartsbad Size of Businesses 10 to 24 employees 11.8% 25 or more employees 8.4% Figure 13: Secondary Data - California Size of Businesses 10 to 24 employees 10.8% or more employees 7.2% ^ Source: InfoUSA. Source: Economic Modeling Specialists, Inc. (EMSI). bw' RESEARCH PARTNERSHIP A-1 16.8% 14.5% Business Survey Report City of Carisbad When factoring in both number of establishments and workers,® Professional, Scienfific, and Technical Services (NAICS 54: 858 businesses, 11,051 workers) and Retail Trade (NAICS 44-45: 742 businesses, 9,118 workers) are the two industries with the largest presence in Carisbad. Although Manufacturing has a relatively small number of firms (198), it is the second largest Carisbad employer with just over 10,000 workers (10,238). Figure 14: Secondary Data - Industrv Breakdown by Number of Businesses^ Professional, Scientific, and Technical Services Retail Trade Other Services (except Public Administration) Finance and Insurance Health Care and Social Assistance Real Estate and Rental and Leasing Construction Accommodation and Food Services Wholesale Trade Nonclassified Establishments Administrative and Support and Waste Management and Remediation Services Manufacturing Information Arts, Entertainment, and Recreation Educational Services Transportation and Warehousing Public Administration Agriculture, Forestry, Fishing and Hunting Management of Companies and Enterprises Utilities Mining, Quarrying, and Oil and Gas Extraction 40% Data sources: InfoUSA for number of businesses and EMSI for number of workers. Industries presented are at the 2-digit NAICS code level. bw] RESEARCH PARTNERSHIP A-2 Business Survey Report City of Carisbad ADDITIONAL SURVEY DATA This secfion presents data collected from survey respondents that were not presented within the body of the report. Please refer to Appendix C for a complete breakdown ofthe sun/ey quesfions, including the demographic profile of respondents (age, gender, city of residence). Number of Carlsbad Locations Eighty six percent of firms surveyed have one locafion in Carisbad, for a mean of 1.30 locafions across respondents. Figure 15: Number of Carisbad Locations 1 One Carisbad locafion 86.1% Two locations 8.5% / Three or ^ more * locations ^ 5.4% bw' RESEARCH PARTNERSHIP A-3 Business Survey Report City of Carisbad Carisbad businesses were asked to idenfify the number one thing that the city could do to improve the local business climate. This question was open-ended, meaning respondents were not provided any potenfial responses but were instead allowed to communicate the first issue that came to mind. As shown by the figure below, no single issue resonated with at least ten percent of all businesses, aside from the response of "nothing needs improvement." It should also be noted that respondents were allowed to give up to two responses, so the total percentages of responses will equal more than 100 percent. Figure 16: Number One Thing Citv of Carisbad Could Do to Improve Business Climate 9.0% Simplify permits, fees and/or regulations (time, cost, etc.) Improve, redevelop the Village Offer more business incentives/programs Improve the quality of the roads and other infrastructure Fix the traffic problems Allow more signage/advertisements Expand parking More public transportation More business events (conventions, networking, etc.) Lower taxes Improve beach access Build or renovate more commercial/industrial space Preserve more open space improve schools Other Nothing needs improvement DK/NA 40% bw] RESEARCH PARTNERSHIP A-4 30 Business Survey Report City of Carlsbad Number of Years Located in Carlsbad Surveyed firms have been in Carisbad for an average of 13.78 years (median 10.00). Figure 17: Number of Years Located in Carisbad 2 years or less More than 2 up to 5 years More than 5 up to 10 years More than 10 up to 20 years More than 20 years 8.1% 22.9% 22.9% 23.8% 22.0% DK/NA J^O.4% 0% 20% 40% 60% bw' RESEARCH PARTNERSHIP A-5 3\ Business Survey Report City of Carisbad Number of Employees at Carlsbad Location(s) The majority of sun/eyed firms have 10 or fewer employees (51%). The average number of employees at their Carisbad locafion(s) is 24.99 and the median is 10.00. Figure 18: Number of Employees at Carisbad Location(s) 1 to 5 employees 6 to 10 employees 11 to 24 employees 29.6% 21.1% 26.0% 25 to 49 employees 50 to 99 employees 100 or more employees 10.3% 40% 60% [bw' RESEARCH PARTNERSHIP A-6 3P Business Survey Report City of Carisbad Pnmary Focus of Business Thirty-nine percent ofthe Carlsbad businesses surveyed are primarily focused on serving consumers direcfiy while 25 percent are primarily focused on serving other businesses and 35 percent serve a combination of both businesses and consumers. Figure 19: Primary Focus of Business Combination of both . 35.0% DK/NA 1.3% bw" RESEARCH PARTNERSHIP A-7 33 Business Survey Report City of Carlsbad Change in Employment over the Past Three Years Just under a quarter (24%) of surveyed businesses grew over the past three years, 52 percent maintained employment levels at their Carisbad location(s), and 20 percent shrunk: resulting in a growth rate of -2.8 percent during the fime period. Figure 20: Change in Employment over the Past Three Years DK/NA 3.6% • Firms who had been in Carisbad more than 10 years and up to 20 years were the most likely to report having declined over the past three years (34% vs. 20% overall). • Although their surveyed sample size was small (n=12), 42 percent of firms with three or more locafions reported grov^rth over the past year compared with 24 percent overall. • Firms with one to five employees in Carisbad were the most likely to report having staying the same (68%), those with 25 to 49 employees were the most likely to report growth (57%), and those with 50 to 99 employees were the most likely to report declines (33%, small sample size for this sub-group: n=12). • Other cluster firms (not in one of the five industry clusters) were more likely to report growth over the last three years (28%) than either Entertainment and Hospitality (19%) or the High Tech cluster group (which includes employers from Life Sciences, ICT, Cleantech, & Acfion Sports) (18%). • Sixty percent of High Tech clusters indicated that they had maintained the same employment over the last three years compared to 52 percent overall. RESEARCH PARTNERSHIP A-8 34 Business Survey Report City of Carisbad Expectations for Physical Space In Carlsbad over the Next 12 to 24 Months Most firms (85%) expect to maintain the current amount of physical space they have in Carisbad. Although the sample size was small (8%, n=18 firms), firms expecfing to increase their space in Carisbad were most likely to need the addifional space to expand their current locafion (39%) or for an additional new location (33%). Among those 11 firms, 73 percent intended to look in Central Carisbad, along or near Palomar Airport Road. Among the three percent of firms forecasting to decrease the amount of physical space they have in Carlsbad (small sample size, n=11 firms), 43 percent expect to leave or close their Carisbad locafion in the next one to two years and 29 percent indicated they could possibly close. The main reason cited for decreasing their physical space in Carisbad was that business has declined or they are closing (43%). Figure 21: Expectations for Physical Space in Carlsbad over the Next 12 to 24 Months Decrease 3.1% DK/NA 3.6% Increase 8.1% Nearly one in six Entertainment and Hospitality firms (16%) indicated that they expect to increase their space in Carisbad over the next 12 to 24 months compared to the average of just under one in ten for all Carisbad business industries (8%). Ninety percent of High Tech clusters indicated that they expect to maintain their current space compared to 84 percent of Other cluster businesses and 81 percent of Entertainment and Hospitality firms. RESEARCH PARTNERSHIP A-9 35 Business Survey Report City of Carisbad APPENDIX B: SURVEY METHODOLOGY Data compiled for this report were drawn from both primary and secondary data sources. The table below provides a brief overview of the methodology utilized for the project. Table 1: Overview of Proiect Methodology Method Secondary Research of Business Data for City of Carisbad Survey of Carisbad Businesses Number of Survey Participants 223 Firms in Carisbad Completed a Web or Telephone Survey Survey Field Dates December 5, 2012 - January 3, 2013 Survey Universe 2,076 Firms with at least 5 Employees^° in the City of Carisbad Survey Margin of Error The margin of error for questions answered by all 223 respondents was +/-6.20% at the 95% level of confidence. SECONDARY RESEARCH For this study, industry clusters were defined using the North American Industry Classificafion System codes. Table 2 displays the complete list of NAICS codes used for this study. All secondary data used in this study were compiled from either InfoUSA or the Economic Modeling Specialists Inc. (EMSI) 2012.4 Complete Employment dataset for the City of Carisbad. The EMSI Complete Employment dataset includes state and federal level data sources and include the self-employed (proprietors and partnerships), agricultural workers, and others not captured by basic payroll data. EMSI current year esfimates are partial projecfions based on the Quarterly Census of Employment and Wages (QCEW) and Current Employment Statistics (CES) provided by the Bureau of Labor Statisfics (BLS). Future year projecfions are based on available historical data for industries and clustered industries. ^° Only firms with at least five employees as classified by InfoUSA were included in the sample. Some firms reported fewer than five Carlsbad employees when surveyed. bw] RESEARCH PARTNERSHIP B-1 Business Survey Report City of Carlsbad Table 2: NAICS Codes Used to Define Industrv Clusters NAICS Industry Cluster Code NAICS Description Action Sports 339920 Sporting and Athletic Goods Mfg. Manufacturing 423910 Sporting and Recreational Goods and Supplies Merchant Wholesalers 333319 Other Commercial and Service Industry Machinery Mfg. 334413 Semiconductor and Related Device Mfg. 334513 Instruments and Related Products Mfg. for Measuring, Displaying, and Controlling Industrial Process Var. 541380 Testing Laboratories 541420 Industrial Design Services Cleantech 541620 Environmental Consulting Services 541690 Other Scientific and Technical Consulting Services 541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotech) 333315 Photographic and Photocopying Equipment Mfg. 334514 Totalizing Fluid Meter and Counting Device Mfg. 335314 Relay and Industrial Control Mfg. 114111 Finfish Fishing 487210 Scenic and Sightseeing Transportation, Water 532292 Recreafional Goods Rental 711110 Theater Companies and Dinner Theaters 711211 Sports Teams and Clubs 711212 Racetracks 711510 Independent Artists, Writers, and Performers 712130 Zoos and Botanical Gardens 713110 Amusement and Theme Parks 721110 Hotels (except Casino Hotels) and Motels 722213 Snack and Nonalcoholic Beverage Bars 722330 Mobile Food Services 481111 Scheduled Passenger Air Transportation 481211 Nonscheduled Chartered Passenger Air Transportafion 481212 Nonscheduled Chartered Freight Air Transportafion Entertainment and Hospitality 481219 711120 Other Nonscheduled Air Transportafion Dance Companies Entertainment and Hospitality 711130 Musical Groups and Artists 711190 Other Performing Arts Companies 711219 Other Spectator Sports 711310 Promoters of Performing Arts, Sports, and Similar Events with Facilities 711320 Promoters of Performing Arts, Sports, and Similar Events without Facilities 711410 Agents and Managers for Artists, Athletes, Entertainers, and Other 711410 Public Figures 713120 Amusement Arcades 713290 Other Gambling Industries 713910 Golf Courses and Country Clubs 713930 Mannas 713990 All Other Amusement and Recreafion Industries 722110 Full-Service Restaurants 722211 Limited-Service Restaurants 722212 Cafeterias, Grill Buffets, and Buffets RESEARCH PARTNERSHIP B-2 3"1 Business Survey Report City of Carisbad 722310 Food Service Contractors 722320 Caterers 722410 Drinking Places (Alcoholic Beverages) 334119 Other Computer Peripheral Equipment Mfg. 334220 Radio and Television Broadcasting and Wireless Communications 334220 Equipment Mfg. 334290 Other Communications Equipment Mfg. 334310 Audio and Video Equipment Mfg. 334412 Bare Printed Circuit Board Mfg. 334413 Semiconductor and Related Device Mfg. 334417 Electronic Connector M^. 334418 Printed Circuit Assembly (Electronic Assembly) Mfg. 334419 Other Electronic Component Mfg. 334515 Instrument Mfg. for Measuring and Testing Electricity and Electrical Signals 334611 Software Reproducing 335999 All Other Miscellaneous Electrical Equipment and Component Mfg. 511210 Software Publishers 517210 Wireless Telecommunications Carriers (except Satellite) 517410 Satellite Telecommunications 517911 Telecommunications Resellers 541330 Engineering Services Information and 541380 Testing Laboratories Communication 541511 Custom Computer Programming Services Technologies 541712 Research and Development in the Physical, Engineering, and Life (ICT) 541712 Sciences (except Biotech) 323121 Tradebinding and Related Work 323122 Prepress Services 334111 Electronic Computer Mfg. 334112 Computer Storage Device Mfg. 334113 Computer Terminal Mfg. 334210 Telephone Apparatus Mfg. 334411 Electron Tube Mfg. 334510 Electromedical and Electrotherapeutic Apparatus Mfg. 334516 Analytical Laboratory Instrument M^. 334517 Irradiation Apparatus Mfg. 334518 Watch, Clock, and Part Mfg. 334519 Other Measuring and Controlling Device Mfg. 334612 Prerecorded Compact Disc (except Software), Tape, and Record Reproducing 335311 Power, Distribution, and Specialty Transformer Mfg. 512110 Motion Picture and Video Production 512191 Teleproduction and Other Postproduction Services 517110 Wired Telecommunications Carriers 517919 All Other Telecommunications 325120 Industrial Gas Mfg. 333314 Optical Instrument and Lens Mfg. Life Sciences 339112 Surgical and Medical Instrument Mfg. Life Sciences 339113 Surgical Appliance and Supplies Mfg. 339114 Dental Equipment and Supplies Mfg. 339115 Ophthalmic Goods Mfg. [bw] RESEARCH PARTNERSHIP B-3 3^ Business Survey Report City of Carisbad 541380 Tesfing Laboratories 541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotech) 811219 Other Electronic and Precision Equipment Repair and Maintenance 339116 Dental Laboratories 112990 All Other Animal Production 325413 In-Vitro Diagnosfic Substance Mfg. 325414 Biological Product (except Diagnosfic) Mfg. 541380 Testing Laboratories 541711 Research and Development in Biotechnology 541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotech) 325411 Medicinal and Botanical Mfg. 325412 Pharmaceufical Preparation Mfg. All Other All Others by NAICS RESEARCH PARTNERSHIP B-4 31 Business Survey Report City of Carisbad PRIMARY RESEARCH A telephone and web survey of 223 Carisbad employers was conducted as part of this study. Survey Design Through an iterative process, BW Research worked closely with the City of Carisbad's Economic Development Department to develop a survey instrument that met all the research objectives ofthe study. In developing the survey instrument, BW Research ufilized techniques to overcome known biases in survey research and minimize potential sources of measurement error within the survey. Sampling Method A database of 2,076 Carlsbad firms was purchased from InfoUSA. That inifial database was then supplemented with firms and contact informafion provided by the City of Carisbad and finally reviewed and refined to ensure it incorporated Carisbad employers, stratified by size and industry. The sampling plan was based on a stratified universe of businesses based on size and industry, with an oversample of businesses within one of the five industry clusters within the city. Dafa Collection Prior to beginning data collection, BW Research conducted interviewer training and also pre-tested the sun/ey instrument to ensure that all words and quesfions were easily understood by the respondents. Telephone interviews were generally conducted from 9:00am to 4:30pm Monday through Friday. The data collecfion period was December 5, 2012 through January 3, 2013. A web version of the sun/ey was also developed and businesses with an email address within the city were sent an online invitation. Carlsbad businesses that were called over the telephone and indicated a preference to complete the survey online, were also sent an online invitafion to the survey. Carlsbad employers in one of the five industry clusters were also mailed a letter, making them aware ofthe survey and given an online URL to complete the survey on the web, before being called. A Note about Margin of Error and Analysis of Sub-Groups The overall margin of error for the survey, at the 95 percent level of confidence, is +/- 6.20 percent for questions answered by ali 223 respondents. It is important to note that questions asked of smaller groups of respondents (such as questions that were only asked to firms based off their previous responses) as well as results presented separately for industry clusters will have a margin of error greater than +/- 6.20 percent, with the exact margin of error dependent on the number of respondents in each sub- group RESEARCH PARTNERSHIP B-5 ^0 Business Survey Report City of Carlsbad APPENDIX C: SURVEY TOPLINES {n=223) [24 employees or less] Hello, my name is ___ name]? [25 employees or more] Hello, my name is May I please speak to a manager or owner at [firm , May I please speak to a manager or a decision maker who is involved in strategic planning or human resources at [firm name]? I am calling on behalf of BW Research, an independent research organization working on behalf of the City of Carlsbad. [IF LETTER SENT] I'm following up on a letter sent from Kathy Dodson, the Economic Development Manager for the City of Carlsbad asking you to participate in a brief sun/ey. The survey will take approximately 10 minutes of your time and will help the City of Carisbad to better serve those businesses located within Carisbad. (If needed): This sun/ey has been commissioned by the City of Carisbad, which is committed to supporting the businesses in the City. (If needed): The survey is being conducted by BW Research, an independent research organization, and should take approximately ten minutes of your time. (If needed): Your individual responses will not be published; only aggregate information will be used in the reporting of the survey results. PLEASE NOTE TRADITIONAL ROUNDING RULES APPLIED NOT ALL PERCENTAGES WILL EQUAL EXACTLY 100% bw' RESEARCH PARTNERSHIP C-1 HI Business Survey Report City of Carisbad SCREENER Are you involved or leading the strategic planning, hiring or location A decisions at your firm 7 100% Yes 0% No 0% Not Sure SCREENER How many locations does your company or organization have in the City B of Carisbad? (IF YES) How many locafions? Total Locations Mean Median 289 1.30 1.00 Breakdown: 86% 1 location 9% 2 locations 5% 3 or more locafions bw] RESEARCH PARTNERSHIP C-2 Business Survey Report City of Carisbad How many years have you had a business location in Carlsbad? # of years Ql [IF UNABLE TO DETERMINE EXACT NUMBER OF YEARS PICK INTERVAL BELOW] Ttie mean and median are calculated from the 213 respondents that provided a specific number of years. Inten/als were provided forthe 10 respondents that were not able to provide a specific number of years and thereby, the percent breakdown is among all 223 respondents. Mean Median 13.78 10.00 Breakdown: 8% 2 years or less 23% More than 2 up to 5 years 23% More than 5 up to 10 years 24% More than 10 up to 20 years 22% More than 20 years 0.4% Don't know/ Refused [bw] RESEARCH PARTNERSHIP C-3 ^3 Business Survey Report City of Carisbad What were the main reasons your company located in Carisbad? [CHECK Q2 ALL THAT APPLY] (Mulfiple Responses Permitted - Percentages May Sum to More than 100%) 35% Proximity to customers, collaborators, and vendors 34% Founders lived here 16% Quality of life in Carisbad 13% Spun-off another company that was already here/ bought exisfing company 6% Proximity to skilled workers/workforce 4% Cost of conducting business 12% Other (Specify) (no single category is over 2%) 12% Don't know/ Refused Q3 I'd like to ask a few general questions about your employees at your Carisbad location(s). If your firm has locations outside Carisbad, please do not include Including all full-time and part-time employees, how many permanent and temporary employees work at your Carisbad location(s)? (Do not accept 0 as a response) Total Emolovees Mean Median 5422 24.99 10.00 Breakdown: 30% 1 to 5 employees 21% 6 to 10 employees 26% 11 to 24 employees 10% 25 to 49 employees 5% 50 to 99 employees 5% 100 or more employees 3% Don't know/ Refused [bw] RESEARCH PARTNERSHIP C-4 Business Survey Report City of Carisbad If you currently have [TAKE Q3 #] full-time and part-time permanent and temporary employees at your location(s), how many more or how may fewer employees do you expect to have at your Carlsbad location(s) 12 months from now? Q4 Breakdown: 35% More 3% Fewer 58% Same number of employees 4% Don't know/ Refused Expected Employment in 12 months (Calculated by only examining businesses with both current and projected data) Current 12 months n Mean Median Total Employees Change 210 22.84 10.00 4,796 210 23.81 10.50 5001 205 % Growth 4.3% [If amount differs by 10% or more in either direction, ask: ] Just to confirm, you currently have employees and you expect to have (more/less) employees, for a total of employees 12 months from now. [bw] RESEARCH PARTNERSHIP C-5 45 Business Survey Report City of Carisbad Over the last three years, has your company grown, declined or stayed about Q5 the same, In terms of employment at your Carlsbad location(s). If it has grown or declined, by about how many people? Breakdown: 24% Grown 52% Stayed the same 20% Declined 4% Don't know/ Refused Growth in Employment over the last 3 years (Calculated by only examining businesses with both current and past data) 3 vears aao Current n 206 206 Mean 24.74 24.04 Median ''0 00 10.00 Total Employees ^097 4953 Change -144 % Growth -2.8% Next, I would like to ask about business space and/or business locations. Q6 In the next 12 to 24 months, do you expect to increase, maintain or decrease your physical space in Carlsbad? 8% Increase our space in Carlsbad 85% Maintain our current space in Carisbad 3% Decrease our space in Carisbad 4% Don't know/ Refused [IF Q6="lncrease our space in Carlsbad" ASK Q7 OTHERWISE SKIP] bw' RESEARCH PARTNERSHIP C-6 Business Survey Report City of Carisbad Do you expect to expand at your current location, look for a bigger Q7 location to replace your current one, or look for an additional location? llllililll^HJllllH Percentages among the 18 respondents that said they expect to increase their physical space in Carlsbad (Small sample size - caution generalizing the results) 39% Expand current location 33% Find an addifional location and keep your current location 28% Replace current location with a larger location 0% Not sure 0% Don't know/ Refused [IF Q7=" Replace current location with a larger location" or "Find an additional location and keep your current location" OR 3 ASK Q8 OTHERWISE SKIP] In which ofthe following areas will you be looking for additional space? Q8 [ALLOW MULTIPLE RESPONSES] (Multiple Responses Permitted - Percentages May Sum to More than 100%) (n=11) Percentages among the 11 respondents that expect to replace their cun-ent location with a larger location or find an additional location and keep their current location (Small sample size - caution generalizing the results) 73% Central Carlsbad, along or near Palomar Airport Road 36% Other locations within Carlsbad 9% Solana Beach 9% Palm Springs 9% Phoenix 9% Santa Ana 9% Don't know/ Refused [IF Q6="Decrease our space in Carisbad" ASK Q9 OTHERWISE SKIP] [bw] RESEARCH PARTNERSHIP C-7 41 Business Survey Report City of Carisbad Q9 Do you expect to leave or close (any of) your Carlsbad location(s) in the next 12 to 24 months? (n=7) Percentages among the 7 respondents that expected to decrease their space in Carlsbad (Small sample size - caution generalizing the results) 43% Yes 29% Possibly 29% No 0% Don't know/ Refused [IF Q6="Decrease our space in Carisbad" ASK QIO OTHERWISE SKIP] What are the primary reasons you expect to decrease your space in QIO Carisbad? [CHECK ALL THAT APPLY] (Multiple Responses Permitted Percentages May Sum to More than 100%) (n=7) Percentages among the 7 respondents that expected to decrease their space in Carlsbad (Small sample size - caution generalizing the results) 29% Business has declined 14% Customers have moved 14% Relocafion 14% More interested in having a space in Encinitas 14% Closing the business 14% Company has been sold 0% Don't know/ Refused bw] RESEARCH PARTNERSHIP C-8 Business Survey Report City of Carisbad Now, I would like to ask you about the general business climate in the City of •lllii^^^MiSililliM Q11 Overall how would you rate the City of Carisbad as a place to do business? 39% Excellent 48% Good 8% Fair 2% Poor 1% Very poor 3% Don't know/ Refused In your opinion, what is the number one thing that the City of Carlsbad Q^2 could do to improve the business climate in the City? (ALLOW UP TO TWO RESPONSES) (Multiple Responses Permitted • Percentages May Sum to More than 100%) 10% Nothing needs improvement 9% Simplify permits, fees and/or regulations (time, cost, etc.) 9% Improve, redevelop the Village 7% Offer more business incentives/programs 7% Fix the traffic problems 7% Improve the quality ofthe roads and other infrastructure 6% Allow more signage/advertisements 6% Expand parking 4% More public transportation 3% Preserve more open space 3% Build or renovate more commercial/industrial space 3% Improve beach access 3% Lower taxes 3% More business events (conventions, networking, etc.) 3% Improve schools 12% Other (Specify) (no single category over 2%) 25% Don't know/ Refused bw] RESEARCH PARTNERSHIP C-9 Business Survey Report City of Carisbad Overall, do you feel the business climate in Carisbad is getting better, getting worse or staying about the same? 013 35% Getting better 6% Getting worse 52% Staying about the same 7% Don't know/ Refused Next I would like to ask specifically about local government and the City of Carisbad Q14 Overall, how confident are you in the Carisbad city government to make decisions that positively affect the local business climate? 25% Very confident 50% Somewhat confident 8% Somewhat unconfident 2% Very unconfident 15% Not Sure or Don't know/ Refused bw' RESEARCH PARTNERSHIP C-10 50 Business Survey Report City of Carisbad Please tell me how satisfied your company is with the following issues and attributes regarding Carisbad's business climate. RANDOMIZE Very satisfied Somewhat satisfied Neither sat nor dissat Somewhat dissat Very dissat DK/NA A. Access to capital 17% 29% 22% 5% 3% 24% B. Local roads and transportation system 39% 40% 8% 10% 1% 2% C. Quality of life 71% 23% 3% 0% 0.4% 2% D. Organizations to support economic development and entrepreneurship 19% 37% 20% 6% 3% 15% E. Access to clients and customers 37% 37% 15% 2% 0.4% 9% F. Ability to recruit high skill talent 25% 42% 15% 7% 1% 11% G. Ability to find qualified entry to mid-level employees 27% 41% 12% 8% 2% 10% H. Access to relevant vendors and suppliers 39% 35% 14% 2% 0% 9% 1. Ability to network or interact with other high-level decision- makers in Carisbad's business community 22% 36% 20% 6% 1% 15% J. Regulatory climate, including zoning, permitting, local regulations and related issues 19% 32% 19% 15% 4% 10% bw] RESEARCH PARTNERSHIP C-11 31 Business Survey Report City of Carisbad Q15 With DK/NA filtered out RANDOMIZE Very satisfied Somewhat satisfied Neither sat nor dissat Somewhat dissat Very dissat A. Access to capital (n=169) 23% 38% 28% 7% 4% B. Local roads and transportation system (n=219) 40% 41% 8% 11% 1% C. Quality of life (n=218) 72% 24% 3% 0% 0.5% D. Organizations to support economic development and entrepreneurship (n=189) 22% 43% 24% 7% 4% E. Access to clients and customers (n=203) 40% 41% 16% 2% 0.5% F. Ability to recruit high skill talent (n=198) 28% 47% 17% 8% 1% G. Ability to find qualified entry to mid-level Employees (n=200) 30% 46% 14% 9% 2% H. Access to relevant vendors and suppliers (n=202) 44% 38% 16% 2% 0% 1. Ability to network or interact with other high-level decision-makers in 26% 42% 23% 7% 2% Carisbad's business community (n=190) J, Regulatory climate, including zoning, permitfing, local regulations and related issues (n=200) 22% 36% 22% 17% 5% bw] RESEARCH PARTNERSHIP C-12 Business Survey Report City of Carisbad [For each "Somewhat Dissatisfied" or 'Very Dissatisfied" response in Q15, Qf 6 ask:] What is your specific issue of concern in this area, and how would you suggest that it be addressed? Verbatim responses to be provided Thinking about the people you hire in Carlsbad, how much difficulty does your Q17 company have finding qualified professional and technically skilled applicants who meet the organization's hiring standards? 44% Little to no difficulty 39% Some difficulty 5% Great difficulty 11 % Don't know/ Refused Would a university or institution of higher education located in the City of Carisbad be valuable to your firm? Q18 32% Yes, very valuable 34% Yes, somewhat valuable 29% No, not valuable 5% Don't know/ Refused [ASK Q19 IF Q18="Yes, very valuable" or "Yes. somewhat valuable" OTHERWISE SKIP] bw] RESEARCH PARTNERSHIP C-13 S3 Business Survey Report City of Carisbad For a university or institute of higher education located in the City of Carlsbad, what programs or areas of research and education would you like Qf 9 to see the potential university focus on? (ALLOW UP TO TWO RESPONSES) (Multiple Responses Permitted - Percentages May Sum to More than 100%) (n=147) Percentages among the 147 respondents that said a university of institution of higher education located in the City of Carlsbad would be "Very" or "Somewhat" valuable 30% MBA, business/markefing or entrepreneurship 10% Renewable energy (solar, biofuel, etc.) 9% ICT or computer science 8% Electrical engineering/ software engineering 8% Medical/ health sciences 7% Engineering (other) (no single category over 2%) 6% Natural Resources 5% Bio-engineering 5% Biotechnology 5% Civil engineering/ architecture 4% Cloud computing 4% Hospitality 19% Other (Specify) (no single category over 2%) 13% Don't know/ Refused Q20 Have you or someone at your firm received economic development information or updates from the City of Carisbad? 37% Yes 44% No 19% Don't know/ Refused [IF Q20="Yes" ASK Q21 OTHERWISE SKIP] bw" RESEARCH PARTNERSHIP C-14 Business Survey Report City of Carlsbad Q2f Overall, how satisfied or dissatisfied was your firm with the information you have received from the City of Carisbad on their economic development services and those programs related to supporting Carlsbad's businesses? (n=83) Percentages among the 83 respondents that said they have received economic development infomiation or updates from the City of Carlsbad 36% Very safisfied 51% Somewhat satisfied 4% Somewhat dissatisfied 0% Very dissatisfied 10% Don't know/ Refused [IF Q20="No" ASK Q22 OTHERWISE SKIP] Would you like to receive information on economic development and business sen/ices from the City of Cadsbad? (n=98) Q22 Percentages among the 98 respondents that said they have not received economic development infomiation or updates from the City of Carlsbad 56% Yes 16% Possibly 27% No 1 % Don't know/ Refused [IF Q21="Somewhat satisfied," "Somewhat dissatisfied," or "Very dissatisfied" ASK Q23 OTHERWISE SKIP] bw' RESEARCH PARTNERSHIP C-15 Business Survey Report City of Carisbad Q23 is there any additionai information you would like to receive from the City of Cadsbad? (n=45) Percentages among the 45 respondents that said they were "Somewhat satisfied," "Somewhat dissatisfied," or "Very dissatisfied" with information they have received from the City of Carlsbad on economic development and related sen/ices 78% No information needed 13% Yes (Specify) Verbatim responses to be provided 9% Not sure at this time Q24 Before we finish I would like to ask the key industries, technologies and customers that drive your business. Next, I would like to ask if your firm is primarily focused on serving other businesses, primarily focused on serving consumers directly or a combination of both businesses and consumers. 25% Primarily on businesses 39% Primarily on consumers direcfiy 35% A combination of both businesses and consumers 1% Don't know bw' RESEARCH PARTNERSHIP C-16 Business Survey Report City of Carisbad Are your customers primarily local - within Carisbad & North County, regional • within Southern California, Statewide - within California, national - within the Q25 Country, or international - outside the Country? [ALLOW MULTIPLE RESPONSES] (Multiple Responses Permitted - Percentages May Sum to More than 100%) 54% Local - Carisbad & North County 35% Regional - within Southern California 23% Statewide - within California 34% National - within the United States 21% International - outside the United States 0% Don't know Are your suppliers and vendors primarily local - within Carisbad & North County, regional - within Southern California, Statewide - within California, Q26 national - within the Country, or international - outside the Country? [ALLOW MULTIPLE RESPONSES] (Multiple Responses Permitted - Percentages May Sum to More than 100%) 32% Local - Carisbad & North County 39% Regional - within Southern California 16% Statewide - within California 38% National - within the United States 13% International - outside the United States 3% Do not have suppliers or vendors 1% Don't know bw] RESEARCH PARTNERSHIP C-17 51 Business Survey Report City of Carisbad Q27 Lastly, is there anything you would like to see the City of Carisbad do to support the businesses that we have not discussed today? Verbatim responses to be provided Jo wrap things up, I just have some background questions for statistical purposes only. QA I n what year were you born? 19_ _ 9% 18 to 29 years old 17% 30 to 39 years old 19% 40 to 49 years old 40% 50 to 64 years old 9% 65 years or older 5% Refused bw" RESEARCH PARTNERSHIP C-18 3^ Business Survey Report City of Carisbad QS What city do you reside in? 39% Carisbad 14% Oceanside 8% Encinitas 8% Vista 7% San Marcos 7% San Diego 4% Escondido 3% Other city in Orange County, Riverside County, or Los Angeles County 3% Other city in San Diego County 2% Rancho Santa Fe 1% Fallbrook 1% Cardiff 1 % Solana Beach 1% Valley Center 1 % Temecula 0.4% Out of state 1% Don't know/Refused Lastly, do we have your permission to provide your contact information QC to the City of Carisbad, so that they may follow up on any issues or requests brought up during this survey? 66% Yes 33% No 1 % Don't know/ Refused I would like to verify your contact information. bw' RESEARCH PARTNERSHIP C-19 Business Survey Report City of Carisbad HP** QL Gender was asked of respondents in the web version of the survey and recorded by voice in the phone version. 60% Male 40% Female Survey Type 65% Phone 35% Web INFORMATION FROM BUSINESS SAMPLE (NOT ASKED) Industrv Cluster 14% Entertainment & Hospitality 11% ICT 7% Life Sciences 5% Cleantech 4% Action Sports 59% Other bw' RESEARCH PARTNERSHIP C-20 City of Carlsbad City of Carlsbad Business Research Findings 2013 Research Objectives Research was focused on: Establishing a baseline assessment of Carlsbad’s business community Quantifying the business climate and other indicators of perceived economic vitality Evaluating the role of industry clusters in Carlsbad Understanding perceived value of having a university or institute of higher learning in Carlsbad Methodology 1. Developed an economic profile of the City and a database of Carlsbad businesses (industry and size) 2. Reviewed research on relevant industry clusters for Carlsbad, including SANDAG’s recent Traded Industry Clusters Report 3. Telephone and Internet survey of 223 businesses Fielded: December 5, 2012 – January 3, 2013 Universe: 2,076 Firms with at Least 5 Employees in the City of Carlsbad Oversample of employers from Carlsbad’s five industry clusters Margin of error +/- 6.20% (95% confidence level) 3 Carlsbad as a Place to do Business 4 A majority of Carlsbad businesses surveyed indicated the city was an excellent (39%) or good (48%) place to do business 2.7% 0.9% 1.8% 8.1% 47.5% 39.0% 0%20%40%60%80% DK/NA Very poor Poor Fair Good Excellent Business Climate 5 Just over one third (35%) of responding businesses indicated the business climate in Carlsbad was getting better and only six percent indicated it was getting worse Getting better 35.0% Staying about the same 52.0% Getting worse 6.3% DK/NA 6.7% Improving the Business Climate (Top 5) 6 Nearly 10 percent of Carlsbad businesses said that simplifying permits, fees and/or regulations (9%), or improving , redeveloping the Village (9%) was the number one thing the City could do to improve the business climate 6.7% 6.7% 7.2% 8.5% 9.0% 0%20%40% Fix the traffic problems Improve the quality of roads, transit and related infrastructure Offer more business programs Improve, redevelop the Village Simplify permits, fees and/or regulations (time, cost, etc.) Very confident 24.7% Somewhat confident 50.2% Somewhat unconfident 8.1% Very unconfident 2.2% Not sure or DK/NA 14.8% Confidence in City Government 7 Seventy-five percent of Carlsbad business respondents indicated they were either very (25%) or somewhat (50%) confident in city government to make decisions to positively affect the local business climate Business Climate Satisfaction (Top 5) 8 30.0% 39.7% 40.4% 43.6% 72.5% 46.0% 40.6% 40.9% 38.1% 23.9% 13.5% 16.3% 15.8% 0%20%40%60%80%100% Ability to find qualified entry to mid-level employees Local roads and transportation system Access to clients and customers Access to relevant vendors and suppliers Quality of life Very satisfied Somewhat satisfied Neither Somewhat dissatisfied Very dissatisfied Analysis Excludes Responses of Don’t Know/ No Answer Business Climate Satisfaction (Bottom 5) 9 21.5% 23.1% 22.2% 25.8% 27.8% 35.5% 37.9% 43.4% 42.1% 47.0% 21.5% 28.4% 23.8% 23.2% 16.7% 17.0% 0%20%40%60%80%100% Regulatory climate, including zoning, permitting, local regulations, and related issues Access to capital Organizations to support economic development and entrepreneurship Ability to network or interact with other high-level decision-makers in Carlsbad's business community Ability to recruit high skill talent Very satisfied Somewhat satisfied Neither Somewhat dissatisfied Very dissatisfied Analysis Excludes Responses of Don’t Know/ No Answer Industry Clusters 1.Action Sports Manufacturing 2.Life Sciences 3.Cleantech 4.Entertainment & Hospitality 5.Information & Communications Technologies (ICT) 10 Action Sports Manufacturing Includes firms that are engaged in the design and production of golf club, surfboard, diving, and other recreational goods as well as the apparel and accessories that is closely tied to these products This cluster has approximately 47 firms and 2,773 jobs in Carlsbad. The average annual earnings per worker in this cluster is approximately $91,020. 11 Life Sciences Combines two of SANDAG’s industry clusters, Biomedical Devices and Products which includes the R & D and production of medical devices and Biotechnology and Pharmaceuticals which includes R & D related to biological technologies as well as the manufacturing of medicinal and diagnostic substances This cluster has approximately 131 firms and 7,033 jobs in Carlsbad The average annual earnings per worker in this cluster is approximately $128,722 12 Cleantech Includes firms that are engaged in renewable energy, energy efficiency, and energy storage This cluster has approximately 90 firms and 4,882 jobs in Carlsbad The average annual earnings per worker in this cluster is approximately $112,672 13 Information & Communications Technologies Information & Communications Technologies (ICT) includes telecommunications, computer and electronics, and software industries This cluster has approximately 254 firms and 9,203 jobs in Carlsbad The average annual earnings per worker in this cluster is approximately $114,561 14 Entertainment and Hospitality Includes hotels, transportation services, and restaurants, as well as entertainment attractions such as theme parks (LEGOLAND), golf courses, and country clubs This cluster has approximately 153 firms and 11,941 jobs in Carlsbad The average annual earnings per worker in this cluster is approximately $25,567 15 Reasons for Carlsbad Location 16 Proximity to customers, collaborators, and vendors was the number one reason for locating in Carlsbad (35%) 12.1% 11.7% 3.6% 5.8% 13.5% 16.1% 33.6% 35.0% 0%20%40%60% DK/NA Other Cost of conducting business Proximity to skilled workers/workforce Spun-off another company that was already here/ bought existing company Quality of life in Carlsbad Founders lived here Proximity to customers, collaborators, and vendors More 34.5% Same number of employees 57.8% Fewer 3.1% DK/NA 4.5% Hiring Expectations Over Next 12 Months 17 Thirty-five percent of businesses expect to have more workers at their Carlsbad location(s) 12 months from now, resulting in an anticipated growth rate of 4.3 percent Grown 24.2% Stayed the same 52.5% Declined 19.7% DK/NA 3.6% Overall Growth Rate = -2.8% Change in Employment Last 3 years 18 The proportion of businesses that experienced negative growth over the last three years (20%) is greater than the percentage of firms that expect to have fewer employees 12 months from now (3%) Yes 37.2% No 43.9% DK/NA 18.8% Economic Development Information 19 9.6% 0.0% 3.6% 50.6% 36.1% 0%20%40%60%80% DK/NA Very dissatisfied Somewhat dissatisfied Somewhat satisfied Very satisfied Among the thirty-seven percent of businesses that said they received economic development information from the City, 87 percent were satisfied with the information they received (36% “very satisfied”) Number of Years Located in Carlsbad 20 Nearly 46 percent of businesses surveyed have been located in Carlsbad for 10 years or more More than 20 years 22.0% More than 10 up to 20 years 23.8% More than 5 up to 10 years 22.9% More than 2 up to 5 years 22.9% 2 years or less 8.1% DK/NA 0.4% Mean = 13.78 years Median = 10.00 years Physical Space Expectations 21 The majority of businesses (85%) expect to maintain their current space in Carlsbad over the next 12 to 24 months Increase 8.1% Maintain our current space in Carlsbad 85.2% Decrease 3.1% DK/NA 3.6% Business Size 22 Compared to California as a whole (18%), Carlsbad (20%) has a relatively large portion of businesses that are either medium-sized (10 to 24 employees) or large (25+ employees) 1 to 4 employees 59.8% 5 to 9 employees 19.9% 10 to 24 employees 11.8% 25 or more employees 8.4% Higher Education in Carlsbad 23 Sixty-six percent of businesses surveyed said that a university or an institution of higher education located in Carlsbad would be valuable to their firm Very valuable 31.8% Somewhat valuable 34.1% Not valuable 28.7% DK/NA 5.4% Conclusions 24 1.Communication with economic development improves the perception of the local business climate 2. Two in every three Carlsbad businesses would value a university or institute of higher learning within the city 3.Traded or export-oriented industry clusters play a considerable role in Carlsbad’s economy and have a substantial impact on overall employment and wealth creation. City of Carlsbad City of Carlsbad Business Research Findings 2013 Higher Education in Carlsbad 26 Programs or areas of research that businesses would like to see at a potential university of institution of higher education: •MBA, business/marketing or entrepreneurship (30%) •Renewable energy – solar, biofuel, etc. (10%) •ICT or computer science (9%) •Electrical or software engineering (8%) •Medical and/or health sciences (8%) •Engineering (other 7% - no single category over 2%)