Going Places : Inland Empire Keeps Adding Jobs With Transportation and High Tech

It may not even be news that the Inland Empire--San Bernardino and Riverside counties--is the fastest-growing area for jobs in all of California.

The two counties, in which 3 million people now live, have led the state in job growth for several years.

And it's not the first boom time for the giant area, which is larger than Massachusetts and three other New England states combined. The Inland Empire grew rapidly with the rest of Southern California after World War II and declined with it in the aerospace downturn and the closing of local military bases.

But there's a new dynamism in San Bernardino-Riverside these days that makes this year's DRI McGraw-Hill job survey meaningful. Changes are occurring in technology and the U.S. economy that affect local industries and promise to sustain future growth.

This time there are good grounds for the prediction of John Husing, a leading Inland Empire economist, that San Bernardino-Riverside will be to the 1990s what the San Fernando Valley was to the '50s and Orange County to the '70s, a pattern-setter for industry and living standards.

The area's 27-city economic development partnership is eager to attract high-tech industry with good-paying jobs--what area isn't?--and it's having some success. But the place to look for understanding of the new Inland Empire is in the area's mainstay industry, transportation and distribution of freight going to and coming from neighboring Los Angeles and Orange counties.

The Santa Fe railroad, now the Burlington Northern Santa Fe, has invested $65 million in a new intermodal yard near the San Bernardino rail station. The merging Union Pacific and Southern Pacific railroads plan to build a similar facility in nearby Colton.

The Santa Fe yard is a departure from tradition: Not a boxcar in sight and no tangle of tracks. Instead, rows of containers, of the kind normally seen in seaports, are loaded onto flatcars by powerful cranes.

The container has become the vessel of domestic cargo. When G.W. "Jerry" Washington, a 30-year railroad veteran, took over as yard manager in 1989, San Bernardino transferred 35,000 containers a year. Last year the number was 160,000, and this year it will go over 200,000.

That attests to the growth of world trade through Southern California and to the economics of shipping containers by rail. A train of 60 containers, with two or three engineers, can move the same freight cross-country as would need almost 60 truck drivers if the cargo were shipped by interstate highway.

If truck driver jobs vanish, work opens up for crane operators and for workers who can handle the information systems that move and monitor containers in Santa Fe's yard.

More such information-rich jobs are needed if San Bernardino-Riverside is not to suffer, as in the past, from offering only low-wage labor for low-payoff jobs. The two counties' economy is only 60% the size of Orange County's, even though the Inland Empire has more people.

That's why Environmental Systems Research Institute Inc. in Redlands is important. ESRI, a company with $160 million in sales and 1,000 employees, developed a science called geographic information systems, which produces dynamic maps. To a map of an oil spill in the Gulf of Mexico, for example, ESRI added data on currents and wind velocity and so predicted where the spill would hit Florida's coast, thus allowing residents to take preventive action.

ESRI maps are used by real estate firms, retail and restaurant chains as a guide to location for housing, stores, delivery routes, etc.

Why is ESRI in Redlands? Partly because founder and President Jack Dangermond grew up there, but mostly because Redlands' ambience and affordable housing--three-bedroom houses for $115,000--help the company recruit computer talent from other parts of the state and country, at starting salaries close to $28,000 a year.

In Temecula, 50 miles away in south Riverside County, Opto 22 Inc. cites affordable housing and lower land costs for its move from Huntington Beach five years ago. The company, founded in 1974, makes computer modules for factory automation and now has $50 million in sales and 260 employees.

"Orange County got very expensive by the time we had to have a bigger building for expansion," explains founder Robert Engman. "Land costs in Huntington Beach are $15 a square foot, compared to $6 a square foot here in Temecula."

And Allen Chao, who founded Watson Pharmaceuticals in Corona in Riverside County 10 years ago, has similar comments. "Orange County was expensive, Corona offered affordable housing and a ready labor pool," he says.

Such shifts are in the classic pattern of regional development, says Husing. "Southern California moves out along its freeways. Lower-priced housing attracts residents, who start out commuting to work but then find jobs locally."

A buildup of local institutions follows. UC Riverside will expand from 9,000 students to 18,000, attaining a size comparable to other major campuses in the UC system. San Bernardino State has added a department of computer science.

Ontario Airport is expanding, and commercial airport facilities are being added on the San Bernardino site of Norton Air Force Base.

The California Speedway, a motor raceway, is being built on the site of the dismantled Kaiser steel mill in Fontana. The speedway will bring $130 million a year to the area with just two racing dates, says Les Richter, speedway vice president and onetime Los Angeles Rams linebacking great.

As fascinating as the economic outlook are questions of fashion. For decades, the San Fernando Valley offered America a model of suburban life. Then Orange County offered conservative politics and a model of exurban life. In the years ahead, if you're interested in lifestyle fashions, watch the Inland Empire.


Emerging Empire

The Inland Empire has suffered a decline in defense work, but jobs have grown in other industries, particularly transportation and business services.

As Defense Jobs Are Falling ...

Defense jobs (in thousands)

1996*: 9.4

Manufacturing jobs (in thousands)

1996*: 72.9

Business services jobs (in thousands)

1996*: 40.0

Transportation jobs (in thousands)

1996*: 28.6

* Estimate

Source: Inland Empire Economic Partnership

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