Roadmap Points Toward Stronger Economic Base

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John Cox, The Bakersfield Californian

What timing! The Milken Institute’s analysts nailed it when it decided this was the month to release recommendations for strengthening Kern County’s economy.

The report’s key suggestion — that four important things can be done to lessen the region’s dependence on oil and agriculture — might have fallen flat a year ago, when Kern was less fearful of the drought and still riding high on the commodity prices that made it a top performer through the recession.

Instead, the report has landed at a time of urgency. At Wednesday’s Kern County Economic Summit, Cal State Bakersfield economist Mark Evans warned the county stands to lose 7,000 jobs this year because of sharply lower oil prices and the drought’s impact on farming. He said this would set back the county’s economic recovery two full years.

The Milken report is, in ways, a reexamination of well-understood truths of Kern’s economy. It reminds us an undertrained workforce restrains the local economy, access to health care is inadequate, and Kern’s potential for prosperity remains greater than current levels suggest. What else is new?

Here’s why the institute’s study is worth your time: It calls for working together at things we’re already good at to give the county a more prosperous future.

Naturally there’s advice for local government and the Kern Economic Development Corp., the business recruitment group whose nonprofit arm commissioned the study. But it also calls upon local businesses, schools, community groups and others willing to try for a solution.

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The upshot is that Kern County must diversify its economy in case of conditions like those we face now. The report says we can build on our strength in oil and ag, bring in investment from outside, cultivate technical innovation and encourage the entrepreneurship that’s already here.

Stay business friendly, Kern

Milken’s easiest advice is to remain welcoming and helpful to industry. That way the county stands out in a state not generally known for being business friendly.

Milken’s researchers said county planners and building officials, in particular, are helping Kern attract investment by streamlining environmental reviews and working closely with businesses during construction phases as a way of heading off nasty surprises late in the process.

Emphasize geographical links

Another of the report’s thrusts is the advantage to be gained by promoting the county’s strategic location.

It says we’re close enough to Los Angeles that the nation’s biggest port complex is a short drive away, thus accounting for our strength in transportation and logistics, yet far enough that living costs are substantially lower than in neighboring counties to the south.

Combining these attributes with the county’s plentiful open space, Milken makes its boldest claim: that Kern may be an ideal place for a Chinese company to establish a manufacturing center. Of course, it says we should also reach out to L.A. businesses that may be considering expansion. More on that below.

Expand small business lending

I must disclose a personal interest in this next part. One of Milken’s recommendations has to do with my wife’s recent transfer from the San Fernando Valley to Bakersfield.

The report mentions that her employer, Valley Economic Development Corp., is one of only two community development financial institutions operating in Kern County, and that better use should be made of such organizations.

Community development financial institutions, or CDFIs, help local economies by providing modestly sized but crucial loans to small businesses and startups that otherwise may have a very hard time raising money. Some also target projects like affordable housing, and apply for grants to improve local financial literacy. Milken suggests a local committee, including bankers, be formed to steer budding entrepreneurs to VEDC and a Fresno-based CDFI that does lending here. Kern could eventually form a “multi-bank” to pool small loans, possibly in cooperation with Cal State Bakersfield’s Small Business Development Center and Bakersfield’s Mid State Development Corp. The report says the county might even want to create its own CDFI.

Involve employers deeply in education

Workforce preparedness, or lack thereof, is the report’s other big point. As we’ve long heard, job creation and wages here are limited by our collective shortage of professional or technical training, as compared with other places vying for some of the same employers.

The solution proposed would give businesses a bigger role in their future workers’ education. Milken suggests focusing on STEM science, technology, engineering and mathematics — to build on Kern’s “distinct advantage” in the tech-heavy industries of agriculture, energy and aerospace.

As the report notes very hopefully, businesses are already working with local schools to train students in STEM fields. A good example is Bakersfield College’s new bachelor’s degree program in industrial automation.

“Industrial automation crosses major industries in Kern County, including petroleum, agriculture, logistics, renewable energy and healthcare,” BC President Sonya Christian said by email. She called the program a model for cooperation and coordination, crediting its creation to “myriad partnerships and relationships with regional business, organizations and political leaders.”

The report says more can be done locally to establish career pathways, and that CSUB should consider establishing a “co-op” program where students would alternate semesters between studying on campus and earning credits in a full-time, apprenticeship-like arrangement. It says the university could do this by leveraging its existing ties with STEM companies.

There are a number of lower-level observations contained in the report, and they offer good advice that isn’t entirely new to Kern. Milken calls for training more nurses so medical recruiters can focus on specialists. It advises maintaining price diversity in the housing market and investing in quality-of-life amenities, such as bicycling infrastructure and a vibrant downtown. The goal is to attract outsiders and retain the rest.

None of the institute’s recommendations are radical, and many of them ask little more than for Kern County to build on what it is already doing.

The main thing, I think, is timing. Studies come and go. But if people like these ideas, then there’s no time like the present to work on trying to broaden our economic base.

Email John Cox at

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