California's job market is expected to expand faster than the rest of the country, a new report says, and analysts believe the East Bay and the rest of the Bay Area could nestle into the vanguard of that growth.

Yet the kind of growth that is coming will pose tough challenges for business and political leaders throughout California, according to the study, which was released today by the Center for Continuing Study of the California Economy.

"There are substantial opportunities and daunting challenges," said Stephen Levy, director of the Palo Alto-based California economy center.

Much of the expansion, the report said, will occur in industries that require a "knowledge-based" work force.

And those trends have emerged at a time when the state's education system continues to struggle to keep up with the nation. Yet if California can produce a skilled work force, people who have the educational tools they need can jump into some cutting-edge industries.

"Exciting new possibilities exist in areas such as stem cell research, alternative energy technologies, and Internet applications," the study asserted.

And officials with work force agencies in the East Bay also point to the tech sector generally, as well as biotechnology and nanotechnology sectors as further sources of economic and job growth.

Those are not the only potential areas of expansion, according to the report:

- California accounts for 17 percent of the nation's foreign trade volume.


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That market should expand as China's share of the world economy swells.

- The state has an above-average share of the quickly expandingfrom Business 1

entertainment and tourism sector.

- Professional and business services, which offer high-wage jobs, comprise the fastest-growing sector in the national economy. California has a strong share of jobs in computer, architectural, scientific and management consulting services part of this industry.

"The East Bay can participate in this growth," said Sean Snaith, a consultant with the Stockton-based Business Forecasting Center at University of the Pacific. "We still see the East Bay as being well above some of the surrounding areas in terms of growth. It's poised to be a really strong region."

One reason for optimism is a strong support network for entrepreneurs and startups in the region, including the Bay Area's world-class upper-level education institutions.

"You have the universities, and you have the national laboratories in the East Bay," Snaith said. "People who come to the area can work at the Livermore and Berkeley labs. That enables the area to keep some of its intellectual capital here."

Still, the East Bay may need to intensify its educational and training efforts to fully participate in the anticipated growth.

"I don't think we're doing enough," said Robert Lanter, executive director of the Workforce Development Board of Contra Costa County. "We need to be better prepared to ride the wave."

Still, a number of initiatives are under way in the East Bay. The Alameda County Workforce Investment Board, mindful of the 450 biotech companies in the two-county region, points to a program at Ohlone College in Fremont that is helping train people for the biotech sector. The trainees include displaced workers from the airline and tech industries.

The nanotech industry can also be a big player as it grows, said Dorothy Chen, executive director of the Alameda County work agency.

"Thousands of nanotech jobs will open up in the next decade," Chen said. "They will need people with high-level skills and a science and math background."

Overall, California is expected to increase its job base by 17 percent between now and 2015, while the nation will expand its job totals by 13 percent.

"We will do better than the nation in terms of economic, population, and household growth," Levy said. "But this isn't going to take us back to the Internet boom."

George Avalos covers the economy, jobs, financial markets, insurance and banks. You can reach him at (925) 977-8477 or gavalos@cctimes.com.