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Economic summit shines spotlight on Kern’s lower-profile industries

The energy sector has long occupied such a central position in the local economy that, when it spun off several years ago from the annual Kern County Economic Summit, less prominent industries couldn’t help but benefit.

That may have been truer Thursday morning than ever before as previously underappreciated industries around Kern County — tourism, aerospace and ag tech — took center stage in front of hundreds of people gathered inside the Bakersfield Marriott at the Convention Center.

Their inclusion in panel and other discussions Thursday generated its own kind of optimism, in that the audience of business and government leaders heard compelling cases for bestowing greater attention and investment on the region’s promising but overlooked clusters.

Oil and renewable energy, the region’s signature industries, did receive mention at Thursday’s event, certainly when recognition was given to their contributions to the wider economy. But it was the underdogs that stole the show.

A panel of recreation and entertainment professionals made the case that hospitality not only represents a natural opportunity for Kern County, but that it deserves greater help from other players in the local economy.

Justin Powers, the founder of Kernville Cowork who’s leading an effort to build a community hub in Lake Isabella, noted the Kern River Valley draws most of its visitors from the Los Angeles Basin and overseas. Greater local benefits await, he said, if the region can attract greater resources.

“It doesn’t take a lot of investment to trigger a lot of economic impacts,” he said.

Co-panelist Kari Crutcher, executive director of the Ridgecrest Area Convention & Visitors Bureau, acknowledged that the city isn’t usually thought of as a destination. But she said that as a full-service community calling itself the Gateway to Death Valley, Ridgecrest is “a great stop on your way” to major tourism hot spots.

President Chris Kelley of the new Hard Rock Casino Tejon added employment considerations to the discussion. More than three-quarters of the casino’s employees are native to Kern, he said, and as part of that, the facility’s turnover rate is half that of the company’s other properties.

“That’s extremely impactful in a business like ours,” he said.

Kelley added that the casino’s performance has exceeded expectations: It’s on track to attract about 3 million visitors per year — 50% more than was anticipated, he said — and the share coming from L.A. is twice to four times the expected rate.

Earlier in the four-hour event, aerospace and its brother in arms, eastern Kern’s defense sector, shed new light on challenges like housing, education and healthcare that need to be addressed if the industry is to live up to its full employment potential.

Moderator Justin Salters elicited insights from aerospace and defense panelists, some of whom took the opportunity to share what happens when recruits bring specialized skills from around the country, only to land in a region where imperative healthcare may be a two-hour drive away.

Simply finding housing can be a challenge, said Col. Christopher J. Carnduff, commander of the 412th Mission Support Group at Edwards Air Force Base. Forty-five minute drives to work don’t support the base’s mission, he said, adding that local partnerships with housing developers would help.

Housing, education and healthcare “are constraints to growth,” he said, adding that lack of infrastructure needs to be addressed if the region wants to attract additional high-paying jobs.

Executive Vice President Jennifer Santiago at aerospace manufacturing company Scaled Composites called housing and quality of life among the company’s “biggest challenges,” even as the severity of the problem varies person to person.

All that said, the panelists seemed to agree the region’s aerospace and defense industries offer great economic potential, partly because of the uniqueness of their assets.

Carnduff said that, beyond having a giant, dry lakebed and usually clear skies, eastern Kern offers ample space for testing.

Santiago, for her part, said that while other areas place limitations on experimentation and testing, the Mojave area offers a streamlined experimental process.

With the energy industry relegated to its own annual Kern County summit, the local farming industry was given its own panel to discuss the rollout of ag technology such as drones and precision irrigation. Participants said such systems bring benefits but also sticking points.

Led by Cal State Bakersfield economist and ag business specialist Aaron Hegde, panelists noted how rising costs related to everything from labor and water to fertilizers has prodded local farmers to invest in new technology.

Not every new system pans out, Sunridge Nurseries President Rick Burnes said. It takes time for the industry to “weed out” technology that isn’t ready for deployment, he said.

It’s also important to find partners who can help bear the cost of proving the technology, he said. Otherwise, it sits on the shelf.

“It’s got to be a team effort,” he said.

Senior Vice President Daniel Terry at local ag supplier and service-provider Holloway commented on other challenges. He listed difficulties that included exposing new tech to dust and dirt, the need to run machines hard for long periods and the way some technologies require growers to give up proprietary information they have kept secret for generations.

Burnes said it has become more important than before to do data analysis.

“The guys who are winning are the guys who are running the numbers and looking at it,” he said.

While previous economic summits tended to be forecast- and data-heavy, most of the numbers Thursday came from just two economists from Cal State Bakersfield. One of them, Richard Gearhart, presented projections that were encouraging in some senses but worrisome in others.

The national economy made great strides between 2020 and 2025 in raising the buying power of the least-paid workers. But last year and this year, he said, job growth has been relatively slow.

A chart he presented indicated inflation-adjusted median wages in the United States are positioned to rise more than 10% by 2030, assuming the Strait of Hormuz remains closed for only three months.

But if the global petroleum bottleneck closes for two quarters, Gearhart’s chart showed, real wages will register minimal growth during that time. And if the strait is shut for three quarters, according to the projection, there will be virtually no increase in real wages through 2030.

https://www.bakersfield.com/news/economic-summit-shines-spotlight-on-kerns-lower-profile-industries/article_b5b30072-4e4e-48ee-a7ae-7e73ad0c0f83.html

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