Orange County is rapidly developing as the economy of the future; a prototype for the next century of American business.
A marvelously diverse business environment has enabled the county to develop one of the nation's highest per capita incomes, one of the lowest unemployment rates and one of the fastest rates of business growth.
And there are no signs of this boom slowing anytime soon. In fact, by some estimates, job growth in Orange County should continue to outstrip national rates by 2 to 1.
During the past decade, the county has led much of the nation in growth in the service sector, electronics, high-tech manufacturing and medical technology. It is these expanding industries that economists believe will anchor the nation's economy in the 21st Century--replacing aging manufacturing businesses.
The percentage of Orange County workers in manufacturing fell to 23.1% from 26.1% during the past 10 years and those employed by the government shrank to 10.6% of the work force from 14.8%, according to the California Employment Development Department.
In three industries considered critical to the future--trade, electronics and services--combined employment in Orange County reached 56% of the work force last year, compared to 48% nationwide. That 8% difference is as significant an edge as it is unusual, said James Doti, dean of the business school at Chapman College.
"These are the industries in which we can compete worldwide," Doti said. The unique composition of Orange County's economy, he said, "is the shape of things to come."
Growth in high-tech and medical businesses creates a demand for more specialized legal, financial and other services for support. The multiplier effect ripples again and again through the economy as demand is created for retailers, food services and housing.
Currently, Orange County has about 49,000 businesses, up 25% from about 39,000 businesses in 1980, according to the state Employment Development Department. During that same period, the number of businesses statewide grew at just 15%, from about 509,000 to about 604,000.
One reason businesses are moving to, expanding into and forming here is that an educated and skilled work force is already in place. And no matter how sophisticated the business community becomes, no matter how extensive an infrastructure is created, much of the county's success will always be attributed to its miles of great beaches.
That's what attracts the work force, and workers are what attract employers, economists said. "It's a very coveted position to be in," said Larry Kimbell, director of the UCLA Business Forecast, of the county's unique location.
Although the rest of the nation is moving in the same general direction--attempting to build a base of high technology and service companies--it could be years before the national economic averages begin to mirror those found in Orange County.
"There will inevitably come a time when the nation catches up," Doti said. And, he notes, in some areas, Orange County's growth has already slowed.
In the past 10 years, office space in the county nearly tripled to 38 million square feet from about 13 million. But now, with a 21.7% vacancy rate, it will take almost three years to fill all the offices already built, according to a survey by Coldwell Banker Commercial Real Estate. And some developers, such as the Irvine Co., have sharply curtailed their office development activities until the market improves.
But the county could well catch the next major wave of the nation's economic transition as it becomes an increasing force in international trade.
Pacific Rim Trade
Its proximity to ports in Long Beach and airports throughout Southern California, as well as its location in the U. S. time zone closest to the Far East, all give Orange County a leg up on much of the nation in developing Pacific Rim trade.
"That's the next stage: facilitating international trade," said Doti, who has created a econometric model of the Orange County economy. "Trade will be the locomotive to drive this economy for the next 10 years," he said.
Despite the rising power of no-growth and slow-growth forces in key cities such as Irvine and Newport Beach, there should be plenty of room in Orange County for the next generation of business growth. Developers already are opening the south county to commercial, industrial and residential developments for the next century. And among the businesses most interested in moving to the new developments are those already in Orange County that are looking for room to expand.