Knowledge-Intensive Business Services in L.A.: Patterns, Interpretation, Consequences INTRODUCTION In the current knowledge-based economy, city-regions are becoming more intricately interwoven and start interacting with farther and previously autonomous areas in their outermost peripheries. In this thesis we will study the rationality and location patterns of KIBS in the Los Angeles city-region, and examine whether the sprawl tendencies identified for the population and other routine employments apply to these high-order services too. Although vital in the present urban economy, economic development research and policy studies in Los Angeles have focused in other industries, neglecting the role of KIBS.
Vicente Romero | vicenteromeroavila@gmail.com Prof. Michael Storper, Chair | April 2, 2014
PRELIMINARY ANALYSIS Firms, total Y KIBS CLUSTERS [Contiguous CT > mean + 1/2 std. dev.] Y 1 Mean 126 N 3,572 Std. Dev. 189
Santa Clarita
3
KIBS firms
Kern
Mean 16 N 3,572 Std. Dev. 30
Kern Los Angeles
Los Angeles San Bernardino
San Bernardino
Ventura San Bernardino
RESEARCH QUESTIONS
Orange
Warner Center Ventura
Ventura
Van Nuys Woodland HillsTarzana
Los Angeles
1
Establishments, Total (2010) 0 - 100
2
251 - 500
±
501 - 1,000 > 1,001
0
5 10
20
30
40 Miles
±
2
0
5 10
20
30
Employees, total Y
High-tech - computer equipment manufacturing, - medical/surgical equipment manuf., - aerospace construction
±
40 Miles
5418 5419
Scientific Research and Development Services Advertising, Public Relations, and Related Services Other Professional, Scientific, and Technical Services
San Bernardino
People engaged in the practice of law providing expertise in a range or in specific areas of law. People responsible for providing services, such as auditing of accounting records, designing accounting systems, preparing financial statements, developing budgets, preparing tax returns, processing payrolls, bookkeeping, and billing. People engaged in planning and designing residential, institutional, leisure, commercial, and industrial buildings and structures. People employed in providing specialized design services (except architectural, engineering, and computer systems design). People engaged in information technologies by writing, modifying, testing, supporting software; planning and designing computer systems; on-site management and operation of clients' computer systems and/or data processing facilities; and other related advice and services. People engaged in providing advice and assistance to businesses and other organizations on management issues; financial planning and budgeting; marketing objectives and policies; human resource policies, practices, and planning; production scheduling; and control planning.
Anaheim
0
2
4
8
12
16 Miles
Costa Mesa Newport Beach
501 - 1,000
Warner Center
NAICS
±
1,001 - 3,000
Mission Viejo
Data Sources: U.S. Census Bureau, ZIP Business Patterns, 2007; US Census Bureau, County Business Patterns, 2007; U.S. Postal Service, Business Delivery Data; EASI Central Business District Calculations.
Canoga Park
4
> 3,001
0
5 10
20
30
40 Miles
KIBS employees
Knowledge-Intensive Business Services
2000
%
Mean 150 N 3,572 Std. Dev. 491
2010
%
5411 Services 64,224 2000-2010 16.6 73,914 Table 1.Legal KIBS structure, Los Angeles city-region,
Absolute24,763Growth 24.9 % 23.1 growth rate % 73,914 13.8 9,690 15.1 84,841 15.8 21,329 33.6
0.51 - 1.00
5411 5413
Legal Services Architectural, Engineering, and Related Services
64,224 16.6 63,512 16.5
1.01 - 1.50
5412 5414
Accounting, Tax Preparation, Bookkeeping, and Payroll Services Specialized Design Services
99,263 25.7 124,026 23.1 24,763 11,629 3.0 13,720 2.6 2,091
24.9
> 1.51
5413 5415
Architectural, Engineering, and Related Services Computer Systems Design and Related Services
63,512 16.5 42,406 11.0
84,841 15.8 21,329 62,036 11.6 19,630
33.6
5414 5416 5415 5417 5416 5418 5417 5419 5418
Specialized Design Services Management, Scientific, and Technical Consulting Services Computer Systems Design and Related Services Scientific Research and Development Services Management, Scientific, and Technical Consulting Services Advertising, Public Relations, and Related Services Scientific Research and Development Services Other Professional, Scientific, and Technical Services Advertising, Public Relations, and Related Services
5419
TOTAL KIBS (#54) Other Professional, Scientific, and Technical Services
11,629 34,966 42,406 14,257 34,966 31,492 14,257 24,036 31,492 385,785 24,036
13,720 73,624 62,036 28,907 73,624 40,722 28,907 34,486 40,722 536,276 34,486
Hollywood West Hollywood Century City Central LAChinatown Monterrey Park West LA Downtown Santa Monica Culver City
5,814,215
TOTAL employment
Walnut Park
385,785
TOTAL KIBS (#54)
5,814,215
TOTAL employment
El Segundo
%25.7
Growth rate % 15.1
Accounting, Tax Preparation, Bookkeeping, and Payroll Services Knowledge-Intensive Business Services
Arcadia
99,263 2000
13.8
Absolute growth 9,690
5412 NAICS
Van Nuys Woodland HillsTarzana
VeniceMar Vista Culver Garden Marina del Rey Playa Vista
Irvine
Riverside
Orange
101 - 500
< 0.50
- IT activities, - R&D, - education
Orange
0 - 100
Location Quotient 2010
Knowledge-Intensive Services
Orange
Long Beach Long Beach West
Santa Clarita
Pasadena
Los Angeles
Signal Hill
Mean 1,961 N 3,572 Std. Dev. 3,810
Burbank North Hollywood Glendale
Ventura
KIBS employees (2010)
3.0 11.0 9.1 3.7 8.2 6.2 100
9.1 3.7 8.2 6.2 100
124,026 2010
6,979,498
536,276
2.6 11.6 13.7 5.4 7.6 6.4
13.7 5.4 7.6 6.4 100
100
6,979,498
1,165,283
150,491
39.0
1,165,283
20.0
Data Source: U.S. Census Bureau, ZIP Business Patterns, 2010; US Census Bureau, County Business Patterns, 2010; U.S. Postal Service, Business Delivery Data; EASI Central Business District Calculations.
KIBS according to the North American Industry Classification System (NAICS)
People employed in conducting original investigation undertaken on a systematic basis to gain new knowledge and/or the application of research findings or other scientific knowledge for the creation of new or significantly improved products or processes.
Anaheim
Torrance
Signal Hill Long Beach Long Beach West
±
0
Y
2
4
8
12
Table 2. Census tracks with the largest quantity of KIBS in 2010
Orange
16 Miles
Costa Mesa
Irvine
Newport Beach
Mission Viejo
CLUSTERS’ MOST SPECIALIZED KIBS Y
KIBS 2010 KIBS density Population 2010 Population density Land area Largest ethnicity group Age: 18 - 64 years old Poverty rates
DTLA (2075.00) 13,868 57,783 KIBS/sq. mile 5,007 20,863 people/sq. mile 0.24 sq. miles Asian, non-hisp. (62.5%) 59% 19% at 100% poverty level
Burbank (3118.00) 10,293 18,380 KIBS/sq. mile 8,231 14,698 people/sq. mile 0.56 sq. miles Hispanic (52.2%) 67% 15% at 100% poverty level
West L.A. (2679.00) 10,084 19,773 KIBS/sq. mile 5,495 10,745 people/sq. mile 0.51 sq. miles White, non-hisp. (80.2%) 54% 7% at 100% poverty level
Irvine (0525.17) 6,923 3,479 KIBS/sq. mile 8,269 4,155 people/sq. mile 1.99 sq. miles White, non-hisp. (43.1%) 71% 8% at 100% poverty level
Data Source: U.S. Census Bureau and California Healthcare Atlas (http://gis.oshpd.ca.gov/atlas/)
People employed in creating advertising campaigns and placing such advertising in periodicals, newspapers, radio and television, or other media and organized to provide a full range of services.
3.59
Most Specialized Industries (LQ 2010)
People responsible for professional, scientific, and technical services.
Legal Services Accounting, Tax Preparation, Bookkeeping, and Payroll Services
METHODS AND DATA
Architectural, Engineering, and Related Services Specialized Design Services Computer Systems Design and Related Services
4.51
Management, Scientific, and Technical Consulting Services
3.36
• Analyzing the KIBS environments:
Scientific Research and Development Services
1.88
2.01
1.63
Where the KIBS firms and employees with jobs related to knowledge and innovation are located? What are the location patterns of KIBS activities within the Los Angeles city-region?
4.06
3.65 1.94
• Business Counts by place of work for 2000 and 2010 (SimplyMap®)
3.36
2.13
2.75
2.99
• Analysis #3: If KIBS locate in a deconcentrated-concentration pattern, do the offices as the KIBS’ natural locations have a similar location pattern? What is the preferred urban form in each type of location (high-rise, mixed-use building, etc.)?
2.94
2.41
3.72
4.46 7.44 2.65 8.05
• 9 economic sectors within the #54 NAICS category (Professional, Scientific, and Technical Services)
3.81
3.3
2.08 2.31
Other Professional, Scientific, and Technical Services
3.67
2.12
1.95
4.83 4.06
4.15
2.06
• 4-digit disaggregation level (#5411 to 5419)
• Analysis #4: Do the KIBS clusters conform a real network? What are the interactions between them? What are the nature (knowledge production, transmission, or transfer) and the extent of the interactions (local, regional, national, or international)?
3.41 4.52
4.29 2.26 2.573.29
• 3,570 CT in 2000 for the Los Angeles city-region (Los Angeles, Ventura, Kern, San Bernardino, Riverside, and Orange Counties)
±
0
2
4
8
12
FURTHER RESEARCH • Analysis #2: Does the KIBS location pattern in Los Angeles follow the same one in other U.S. large metropolitan areas (NYC, Chicago, DC)?
Advertising, Public Relations, and Related Services
6.19
16 Miles
1.99
1.82 1.81
5.04
18.0 46.3
2,091 18.0 38,658 110.6 19,630 46.3 14,650 102.8 38,658 110.6 9,230 29.3 14,650 102.8 10,450 43.5 9,230 29.3 150,491 39.0 10,450 43.5
Manhattan BeachHawthorne
Redondo Beach
5417
Riverside
CLUSTERS’ SPECIALIZATION IN KIBS Y
Sherman Oaks
5416
40 Miles
Orange
Riverside
Orange
1,001 - 5,000
Advanced Producer Services
5415
30
San Bernardino
Torrance
0 - 1,000
(1) Services that are non-routine; (2) intensive use of human capital; (3) related to science and technology; (4) innovation appears quickly; (5) highly specialized knowledge; (6) rely heavily upon professional knowledge; (7) primary sources/producers of information and knowledge or (8) use knowledge to produce intermediary services; (9) are of competitive importance and supplied primarily to business.
5414
20
Los Angeles
Employees, Total (2010)
KIBS. A DEFINITION
5413
5 10
Kern
Los Angeles
> 25,001
Accounting, Tax Preparation, Bookkeeping, and Payroll Services Architectural, Engineering, and Related Services Specialized Design Services Computer Systems Design and Related Services Management, Scientific, and Technical Consulting Services
0
Walnut Park
Ventura
10,001 - 25,000
5412
101 - 810
Orange
5,001 - 10,000
Legal Services
±
51 - 100
Manhattan BeachHawthorne
5
5411
26 - 50
Redondo Beach
Producer Services
Riverside
Orange
11 - 25
San Bernardino
Are KIBS clusters more specialized in certain KIBS than in other?
Professional, Scientific, and Technical Services
0 - 10
El Segundo
San Bernardino
4
54
San Bernardino
Los Angeles
Are peripheral areas becoming economically more diverse/interesting through KIBS’ clustering?
- legal and management activities, - technical testing and analysis, - advertising, - staff selection
Arcadia
KIBS establishments (2010)
Marina del Rey Playa Vista
We hypothesize a deconcentrated-concentration pattern that creates a multipolar city-region where certain places are more innovative than others. Is it right?
- finance, - insurane, - real estate
Pasadena
Los Angeles
Central LA Chinatown West LA Monterrey Park Century City Downtown Santa Monica Culver City Venice Culver Garden
Kern
3
Glendale
West HollywoodHollywood
Riverside
Orange
101 - 250
What is the location pattern of KIBS in Los Angeles? Does it reflect the population and employment sprawled nature of the Los Angeles city-region?
Finance, Insurance and Real Estate
Los Angeles
Burbank Sherman Oaks North Hollywood
Is Los Angeles an innovation and knowledgebased city-region? At what extent?
San Bernardino
Canoga Park
Orange
20.0