Greater Sacramento Deep Dive: Market Update

A portrait of Chancellor Gary May with crossed arms in front of a dark blue background

Greater Sacramento Deep Dive: Market Update

Welcome to Sacramento and the newly renovated 660 J Street!

I’m Gary May, Chancellor of UC Davis, and I have the honor of giving your keynote address this morning.

There are a couple of themes you’ll hear repeated often today: momentum and innovation. I’d like to drill down a bit on these themes.

Momentum. We’re seeing tremendous momentum in the Greater Sacramento market.

Despite economic impacts caused by the COVID-19 pandemic, the growth trajectory of the Greater Sacramento region is set to go into overdrive over the next 5 years. In fact, our region is one of the fastest growing in California and one of the most diverse in the country.

During the pandemic, we’ve seen steady inbound migration, especially from the San Francisco-Oakland-Berkeley areas. According to population estimates from the California Department of Finance, California lost 182,000 residents in 2021. However, Greater Sacramento continued to grow during this same period, adding more than 12,000 new residents. Likewise, the region’s net migration in 2020 was 12,979, a 56% increase over 2019.

This reflects a continuing growth trend for the Greater Sacramento region, which was the fastest growing large metro in California between 2016 and 2021. Accelerated growth is expected to continue through 2026. Year-over-year net migration increased 56 percent in 2020.

It’s easy to see why people are taking notice.

Greater Sacramento is part of a “mega-region” that’s developing between the Silicon Valley and the Sierra Foothills, with the I-80 corridor serving as a key artery. The cities of Davis and Sacramento are located almost right in the middle. I first heard this idea put forth by Barry Broome, president and CEO of the Greater Sacramento Economic Council, about 5 years ago.

Now, we can really see this mega-region taking shape. UC Davis, the City of Sacramento, GSEC and many other partners are working together to help ensure the economic and innovative success of this thriving region.

Greater Sacramento has so much to offer, including location, diversity, talent and economic investment. And it’s quickly becoming one of the hottest markets in the West — and the place to do business in California.

Just 88 miles from San Francisco, the region’s talent pool is unmatched — and investors are taking note. Over $13 billion was invested in Greater Sacramento over the last 5 years — with roughly $4 billion invested in 2021 alone.

With all this activity, interest in business relocations and expansions in the region jumped 19% between March 2021 and March 2022.

Greater Sacramento has one of the most diverse talent pools in the country. In 2002, Time magazine name Sacramento “America’s most diverse city.” Greater Sacramento continues that ranking 20 years later.

According to 2020 Census data, Sacramento is the #2 most diverse city in the nation. It’s a majority-minority region with expected growth among non-white populations over the next 5 years.

When it comes to tech talent, Greater Sacramento is #1 for raw diversity, #2 for representative diversity and #1 for female participation in the tech workforce.

Our region is also growing in skilled and diverse talent. More than 734,300 students are enrolled in 2 and 4-year institutions within 100 miles of Greater Sacramento. The region has 1 and ½ times more enrolled students within a 100-mile radius than Phoenix and Austin and 3 times more than Seattle.

Greater Sacramento also has a strong STEM base, with nearly 2 times more STEM degree completions within 100 miles than Phoenix and Austin. The region has the largest share of life scientists among peer MSAs and 2 times the national average.

Of course, UC Davis is large factor in this success story. Our university continues to rise toward the top of college rankings. Forbes named UC Davis #4 among public universities in the nation for student outcomes.

And UC Davis is #10 among Money’s 25 Best Colleges in America. The rankings highlight — and I quote — “colleges that have a record of helping students graduate and launching graduates into jobs with above-average wages.”

We’re #1 in North America for campus sustainability, according to GreenMetric World University rankings. That’s a top placement we’re celebrating for the sixth consecutive year.

I’m especially proud that UC Davis was named #1 in the nation for campus diversity, inclusiveness and internationalization in the most recent QS World University rankings. We’ve engaged our entire campus community and we’re making progress on our strategic plan goal to make UC Davis a higher education role model for diversity, equity and inclusion.

UC Davis also received a #3 ranking from Hispanic Outlook magazine for top schools for Hispanics in graduate STEM programs in the category Agricultural/Animal/Plant/Veterinary Science and related fields.

One final note: both UC Davis and UC Davis Health are recognized by Forbes as Best Employers for Diversity.

We’re helping to prepare nearly 40,000 students to succeed in an increasingly diverse workforce in our region and far beyond.

Last fall, we saw the highest number of student applications ever. More than 110,000 students applied to enter UC Davis as freshman or transfer students in fall 2021. That’s a 4 percent increase over the previous year.

Now, I saved the best for last.

I want to talk about innovation. Innovation is at the heart of Aggie Square, a new development on our Sacramento campus.

Aggie Square is the ultimate “innovation ecosystem.” It’s part laboratory, classroom, workplace, business incubator and community gathering place.

We’re building a place where companies, researchers, students, faculty and community advocates work side by side … Where cutting-edge UC Davis research powers innovative companies … And where UC Davis provides training for up-and-coming industries and for residents who live in surrounding neighborhoods.

It’s a collaborative effort between UC Davis, the City of Sacramento and our development partner, Wexford Science and Technology. It demonstrates the best of public-private partnerships and how much more we can accomplish when we work together.

Aggie Square is a mixed-used innovation district modeled after Tech Square in Atlanta. In that case, we were successful in transforming a neglected area of Atlanta into a thriving extension of the Georgia Tech campus. Leading corporations partnered with us at Tech Square, including Delta Airlines, Stanley Black & Decker and Panasonic Automotive. I’m confident that we can do the same with Aggie Square.

In fact, the project is moving forward with more excitement and momentum than we expected.

We’ve had many supporters along the way, including elected officials at the local, state and federal levels, the Greater Sacramento Economic Council, the business community, and numerous neighborhood leaders and community members who shared their ideas and helped shape our vision for the development.

Aggie Square will be a cornerstone of regional identity and economic development. It’s projected to inject $5 billion annually to the regional economy and support 25,000 ongoing jobs. It will also bring investments in affordable housing, youth programs and workforce training for the surrounding neighborhoods.

We broke ground in February and we’re now working on the first phase of development, which involves a capital investment of $1.1 billion. It will add 1.2 million square feet of development by late 2024. That includes approximately 500,000 square feet of science, technology and engineering space, along with research space, wet labs, housing and commercial space designed to emphasize flexibility and collaboration.

Aggie Square will be anchored by UC Davis’ research in life sciences, technology, engineering, food and health, social impact, and so much more.

It will be powered by talent from UC Davis students, graduates, faculty and researchers.

And it will make our university more accessible, with public event spaces and a community engagement center that will bring people from diverse backgrounds and points of view together to spur innovative approaches.

Importantly, it will attract new businesses and new talent to the Sacramento region.

We expect bold new partnerships to come. We’ve already announced collaborations with Cytiva, formerly GE Health Sciences. And food icon Alice Waters, who revolutionized the way we eat and the way we think about healthy food from her restaurant in Berkeley, Chez Panisse.

The Alice Waters Institute for Edible Education at Aggie Square will locate an institute dedicated to the practice of regenerative agriculture, with the goal of serving a healthy, sustainably grown plate of food to every school child in every school in California.

We expect Aggie Square to be home to the UC Davis Health Digital Co-Lab, which will house the first healthcare-focused Amazon Web Services Cloud Innovation Center in the country. The goal is to engage communities and democratize data science.

We also hope Aggie Square will provide space to expand the remarkable work of our stem cell institute in Sacramento, which is funded by the California Institute for Regenerative Medicine. That’s where researchers are working on new therapies and cures for diseases. I believe this is just the beginning of what we’ll discover and innovate at Aggie Square.

The idea is to link our world-renowned research, faculty and students with businesses in the greater Sacramento region – and beyond. Aggie Square provides the opportunity to align UC Davis’ strengths in research and innovation, and our experience in launching startups, with the market goals of industry partners.

This will allow Greater Sacramento leaders and businesses to collaborate with the university. Together, we can bolster growth in targeted innovation sectors and create new jobs in STEM fields, helping to create greater prosperity across the region.

With that, I’ll wrap things up.

You’ll be hearing much more today about the momentum and innovation occurring in Greater Sacramento, including some of the major developments shaping the region, downtown revitalization and the outlook for the future.

As I alluded to earlier, the Greater Sacramento region is quickly becoming one of the hottest markets in the West — and the place to do business in California.

As key developments continue to take shape, our region is set for an unprecedented economic shift. Companies looking to do business in one of the most productive and innovative economies in the world should consider Greater Sacramento.

Thank you, and enjoy the event.

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