It has long been a truism that L.A.’s economy has transformed itself from one dominated by large manufacturing, entertainment and financial companies to one driven by small companies in a diverse array of industries.

Now, the latest report from the Milken Institute provides a comprehensive snapshot of that transformation, detailing just how much the region has evolved from the days when it was dominated by Security Pacific National Bank, Lockheed Corp. and other long-gone corporate stalwarts.

The report, to be submitted Wednesday to the Los Angeles City Council, also reveals wide variations in the economic health of city neighborhoods, with the Westside and San Fernando Valley leading the way and Central, Eastern and South Los Angeles lagging behind.

“While all seven local planning areas have witnessed declines in manufacturing and growth in services, some have adapted to change much better than others,” stated report authors and Milken research economists Kevin Klowden and Perry Wong.

The report noted that the manufacturing sector lost the most jobs between 1996 and 2002, while services emerged as the leading sector. Also, despite the exodus of major corporations, the report noted that companies with more than 100 workers still employ 55 percent of the city’s workforce.

In addition, the report said Central Los Angeles, the South Valley and West Los Angeles had the highest numbers of start-up businesses, while the Harbor area had the lowest number. The report further found that that the fastest-growing segment of the local economy has been the informal sector, including contract and part-time workers and the “underground economy.”

“One could argue that the jobs in the informal economy are better than no jobs at all. Note, however, that the informal economy sometimes competes with the formal economy, driving down wages and reinforcing social and economic polarization. Moreover, the rapid growth of the informal economy is narrowing the tax base and increasing the burden on local businesses and workers,” the report stated.

The report authors made several recommendations to improve the L.A. economy, including expanding workforce training programs, improving business access to capital, increasing outreach to ethnic businesses and doing a better job of linking immigrant workers with job openings.