On Medical Device Stagnation in OC
Copyright Jack Mixner. 714 449 1040. www.mixnerstrategy.com
I have been working on economic development issues in Orange County since the early nineties. Back then, we assumed that the medical device industrial cluster in Orange County was one of the strongest in the world. If memory serves me well, employment in the cluster was about 14,000 people.
Today there are about 28,745 peopled employed in the biomedical cluster. That includes many employess in sub-clusters like pharmaceuticals and doctor's back offices.
Growth looks robust. What's the problem? Projected growth in the cluster through 2025 shows a 3.3% loss in employment (2025 Wake Up, page 16).
Strategic Implication
Orange County lost its strength in defense related spending during the nineties. It is at risk of losing its medical device strengths unless it takes action - now.
Traditional economic development strategies include stealing businesses from other locations and keeping the businesses we already have from moving to low expense manufacturing areas like Mexico or the Inland Empire in San Bernadino and Riverside Counties. They might work in this case. However, there is something better.
What to Do
Orange County should focus on building new companies in the medical device space. Innovation and increases in productivity in current companies both come from the excitement new companies cause in the marketplace. Traditionally, as companies came and went in an economy, productivity continued to increase. This increased overall GDP in the economy.
There is a better way to do this that is less wasteful. Grow companies and keep them solvent by focusing management talent on their needs early in the growth process (Hubbard, page 4.) Help them hire managerial talent earlier than they would normally expect to. Continue to train them as part of external - or internal - continuing education.
Reference
Orange County Workforce 2025: A Wake Up Call? http://www.ocwib.org/Docs/Workforce_2025.pdf
Hubbard, Glenn. The Productivity Riddle. strategy+business. Winter 2006. http://www.strategy-business.com/press/article/06402?gko=e1377-1876-20605692