The economic drivers of Orange County Ed Coulson Center for Real Estate and Department of Economics and Public Policy Paul Merage School of Business UC Irvine

What drives Orange County? Popular conceptions:

What drives Orange County? Popular conceptions:

What drives Orange County? Popular conceptions:

They’re half right. Here are the largest employers in the OC: 1. Walt Disney Co.: 29,000* 2. University of California, Irvine: 23,605 3. St. Joseph Health: 11,925 4. Allied Universal: 8,229 5. Kaiser Permanente: 7,694 6. The Boeing Company: 6,103* 7. Wal-Mart Stores Inc.: 6,000 8. California State University, Fullerton: 5,781 9. Bank of America Corp.: 5,500 10. Target Corp.: 5,400 11. Hoag Memorial Hospital Presbyterian:  5,240 12. Memorial Care Health System: 5,200 13. Wells Fargo & Co.: 5,190 14. Tenet Healthcare Corp.: 4,346 15. The Irvine Company: 4,200 16. Home Depot Inc.: 4,084 17. Albertsons: 4,017 18. Cedar Fair LP: 4,000* 19. UnitedHealth Group Inc.: 3,900 20. Edwards Life Sciences: 3,823*

Other headquarters

Which are the drivers, and which are the passengers? A simple point: The largest employers are not always the driver. Drivers are exporters The multiplier model suggests that a small amount of export gets leveraged to large amount of local-serving establishments I suggest that the starred firms (and others) are such exporters

How do the drivers come to be in OC? Historical background: OC was suburbia personified Bedroom communities Construction and homebuilding were a major driver… still are But also part of the suburbanization of employment centers, especially for land-intensive facilities Aircraft Amusement Parks Two other forces: The development of Interstate Highways and large trucks reduced need for access to central transport hub, so other kinds of goods-producing industries could locate in freeway-rich OC. And of course…

the primary economic driver of OC “The company [Pacific Life] moved its headquarters to their current Newport Beach, California location in 1972 when management decided that Newport Beach would provide a higher standard of living for their families.”

And so other agglomerative forces can take hold, particularly in information-intensive industries (the location preferences of skilled workers): Instruments Electronics Biosciences Irvine/Costa Mesa was an original Edge City, but it’s edginess is morphing into a separate agglomerative center.

R and D lab hotspot right here (Buzard et al, 2017)

Average commuting times hint that those who live in OC work in OC

Some numbers

% of total OC employment Employment: OC Amusement, Gambling, Recreation Location Quotient = (% in OC)/(% in US)

Employment: OC Construction % of total OC employment Location Quotient = (% in OC)/(% in US)

Employment: OC Transportation Equipment % of total OC employment Location Quotient = (% in OC)/(% in US)