December 2023Rewriting the script: LA’s opportunity to build a faster-growing, more inclusive economyLA County is a global cultural capital, with the largest economy in the United States. Yet bold action may be needed to drive inclusive growth in the next decade.By Ashwin Adarkar, Tolian Gjika, Jonathan Law, Tim Ward, Lola Woetzel, and Yenli Wong.Copyright © 2023 McKinsey & Company. All rights reserved.This publication is not intended to be used as the basis for trading in the shares of any company or for undertaking any other complex or significant financial transaction without consulting appropriate professional advisers.No part of this publication may be copied or redistributed in any form without the prior written consent of McKinsey & Company.iiRewriting the script: LA’s opportunity to build a faster-growing, more inclusive economyContentsIntroductionChallenge 1: The business environment—industry shifts and the difficulty of doing business in LAChallenge 2: Talent supply gaps and evolving skills needsChallenge 3: Access to affordable housing, convenient transportation, and high-speed broadband LA’s blockbuster sequel: A new era of economic growth for all by promoting innovation, enabling the region’s considerable talent, and improving affordabilityA call to action1310162027iiiRewriting the script: LA’s opportunity to build a faster-growing, more inclusive economyLos Angeles County has the largest economy in the United States—one of the largest in the world, in fact—and over the past three decades demonstrated strong productivity growth relative to the rest of the country (Exhibit 1).¹ It is home to diverse, talented Angelenos, fast-growing industries with strong specialization, and imagination and creativity that fuels innovation across its economy. With this combination of “uniquely LA” assets, the county has an abundance of opportunities to showcase its potential for accelerated, inclusive economic growth (see sidebar, “Methodology”).Yet, despite these strengths, LA has not matched its peer counties, nor the United States, in other growth areas—GDP growth, employment growth, and population growth (Exhibit 1).² To put the magnitude of slower economic growth into perspective, zooming in on employment growth: our analysis shows that if LA County had matched its peers’ average employment growth rate in the decade following the Great Recession, 325,000 more Angelenos would be employed today.³ 1 GDP (current US $), World Bank, May 2023; Gross domestic product by county, 2021, United States Bureau of Economic Analysis, December 8, 2022.2 See sidebar: “Methodology.”3 Quarterly census of employment and wages, United States Bureau of Labor Statistics, May 2023; McKinsey analysis, taking shifting industry dynamics into account.Exhibit 1050100150200250300198120221.41.91.30.82.72.00.60.92.52.60.50.9200150100500050100150200250300198120220501001502002503001981202219812...
