The Bay Area's job growth over the past quarter-century can be attributed to job creation in the service sector.
In 2021, the top 3 sectors with the highest number of jobs were education & health services (830k jobs), professional & business services (760k jobs), and trade, transportation, & utilities (530k jobs).
In 2021, 43% of jobs in the San Francisco Bay Area are in professional, business, education or health related services, highlighting the importance of the service-based economy. Another notable industry is the information sector. By 2021, jobs in this sector had grown to over 245k, which represents over 2x growth since 2010.
The COVID-19 pandemic had a larger impact on some industries than others. For example, jobs in the leisure and hospitality industry decreased by 150k (-33%) between 2019 and 2020, highlighting the immediate impact of the pandemic. Meanwhile, the information sector added almost 10k jobs (increase of 4%) during this same period.
The education & health services sector has the highest number of jobs in the Bay Area at approximately 830k in 2021. This represents 22% of all jobs in the region
Historical Trend for Jobs by Industry
The relative distribution of jobs in various industries throughout the Bay Area has somewhat changed over time, with some industries changing a lot more than others.
Since the early 1990’s, the top 3 industries have consisted of trade, transportation, & utilities, education & health services, and professional & business services, but not necessarily consistently ranked in that order. Education and health services has been consistently growing as a relative share of Bay Area employment, and since 2002 has been the largest industry sector in the region. In 1990, around 15% of jobs were in this sector, by 2021 this had grown to around 22%.
There are some sectors that have seen declines in total employment and therefore their relative share of jobs in the region. The finance sector has long been one of the pillars of the regional economy, especially in San Francisco. In this sector, the number of jobs has declined by approximately 15% between 1990 and 2021. In 2021, jobs in financial activities accounted for 5% of all jobs in the region, down from 8% in 1990. Another industry experiencing decline is the manufacturing sector, which has 25% fewer jobs in 2021 than it had in 1990. In 2021 manufacturing accounted for 10% of all jobs in the region, down from 16% in 1990.
of jobs in the Bay Area that were in the manufacturing sector in 2021. For comparison, this number used to be 16.1% in 1990
Historical Trend for Job Growth by Industry
Job growth in the professional and business services sector, one of the pillars of our region’s economy, is increasingly concentrated in San Francisco, San Mateo and Santa Clara counties.
As of 2021, Santa Clara, San Mateo and San Francisco counties have experienced some of the greatest economic benefits from job growth in the professional and business services sector. While the East Bay has also benefited from service-sector job growth, its most dominant industry sectors are manufacturing, government and logistics - sectors that have experienced relatively stagnant job growth over the same period.
Agriculture remains an important sector in our region, particularly in Sonoma and Napa counties. These two counties account for over half of all farm jobs in the region. While agriculture has declined overall as the region has become more urbanized, these counties have seen a recent resurgence in agricultural employment.
Nearly one-third of all Bay Area professional & business services jobs are in Santa Clara County
Industry Specialization Breakdown (2021)
The Bay Area has the highest share of information and manufacturing jobs among major metro areas nationwide.
In 2021, the Bay Area was like other large metro areas in that over 50% of jobs can be found in just 3 industries: education & health services, professional & business services, and trade, transportation & utilities. The Bay Area, with its agglomeration of information technology companies, tops the list of metro areas for the largest share of regional jobs in the information sector. New York, home to major media and finance companies, and Los Angeles, home to the film industry, also have relatively large information sectors. The Bay Area and Chicago both have around 9% of their jobs in the manufacturing industry, which is high relative to other large metro areas.
of jobs in the Bay Area that are in the information sector as of 2021, which is relatively high compared to other large metro areas nationwide
Metro Comparison for Jobs by Industry (2021)
Sources & Methodology
Quarterly Census of Employment and Wages (QCEW) employment data is reported by the place of work and represent the number of covered workers who worked during, or received pay for, the pay period that included the 12th day of the month. Covered employees in the private-sector and in the state and local government include most corporate officials, all executives, all supervisory personnel, all professionals, all clerical workers, many farmworkers, all wage earners, all piece workers and all part-time workers. Workers on paid sick leave, paid holiday, paid vacation and the like are also covered.
Besides excluding the aforementioned national security agencies, QCEW excludes proprietors, the unincorporated self-employed, unpaid family members, certain farm and domestic workers exempted from having to report employment data and railroad workers covered by the railroad unemployment insurance system. Excluded as well are workers who earned no wages during the entire applicable pay period because of work stoppages, temporary layoffs, illness or unpaid vacations.
The location quotient (LQ) is used to evaluate level of concentration or clustering of an industry within the Bay Area and within each county of the region. A location quotient greater than 1 means there is a strong concentration for of jobs in an industry sector. For the Bay Area, the LQ is calculated as the share of the region’s employment in a particular sector divided by the share of California's employment in that same sector. For each county, the LQ is calculated as the share of the county’s employment in a particular sector divided by the share of the region’s employment in that same sector.
Data is mainly pulled from aggregation level 73, which is county-level summarized at the North American Industry Classification System (NAICS) supersector level (12 sectors). This aggregation level exhibits the least loss due to data suppression, in the magnitude of 1-2 percent for regional employment, and is therefore preferred. However, the supersectors group together NAICS 11 Agriculture, Forestry, Fishing and Hunting; NAICS 21 Mining and NAICS 23 Construction. To provide a separate tally of Agriculture, Forestry, Fishing and Hunting, the aggregation level 74 data was used for NAICS codes 11, 21 and 23.
QCEW reports on employment in Public Administration as NAICS 92. However, many government activities are reported with an industry specific code - such as transportation or utilities even if those may be public governmental entities. In 2021 for the Bay Area, the largest industry groupings under public ownership are Education and health services (58%); Public administration (29%) and Trade, transportation, and utilities (29%). With the exception of Education and health services, all other public activities were coded as government/public administration, regardless of industry group.
For the county data there were some industries that reported 0 jobs or did not report jobs at the desired aggregation/NAICS level for the following counties/years:
Farm: (aggregation level: 74, NAICS code: 11)
Contra Costa: 2008-2010
Marin: 1990-2006, 2008-2010, 2014-2020
Napa: 1990-2004, 2013-2021
San Francisco: 2019-2020
San Mateo: 2013
Information: (aggregation level: 73, NAICS code: 51)
Financial Activities: (aggregation level: 73, NAICS codes: 52, 53)
Unclassified: (aggregation level: 73, NAICS code: 99)
All nine Bay Area counties: 1990-2000
Marin, Napa, San Mateo, and Solano: 2020