Russ Steele
The Milken Institute's 2009 State of the State Conference was held on October 20 in Los Angeles. More than 600 attendees were given an in-depth look at the many challenges facing the state, along with solutions for solving them, including economic recovery. They now have the Conference Videos on line of the panel sessions here (www.milkeninstitute.org/sos2009).
Given the Nevada County Economic Resource Council is working on a Comprehensive Economic Development Plan for Nevada County, I was very interested in the Panel on Keeping Companies and High-Paying Jobs in California. We need a vision for where we want our economy to be in five-ten years, and some of the panel's insights should be considered in crafting that vision.
Session Speakers were:David Crane, Special Advisor for Jobs and Economic Growth, Office of Gov. Arnold Schwarzenegger
Eric McAfee, Chairman, McAfee Capital
John Watson, Vice Chairman, Chevron Corporation
Perry Wong, Senior Managing Economist, Milken Institute
The Moderator was Nancy McFadden, Senior Vice President, Public Affairs, PG&E Corp.
Below is a session summary, but it does not really capture the strong message from the panel in their own words -- we are over regulated. The most important discussion for Nevada County was the presentation and follow up by Perry Wong on the loss of high tech jobs in California. Below are some captured screen images from his presentation. The slides are only available to Millken Institute Members. My apology for the poor quality.
Now look at the peer states their high tech job loss was much less. Wong thinks many California high-tech jobs went to these states.
Session Summary:
A Chevron refinery in Richmond wants to upgrade, reducing its emissions and creating a host of new jobs in the process. Sounds like a win-win, right?
But thanks to California's cumbersome regulatory structure, that refinery project went through a permitting process that lasted for four years. No sooner did construction begin than a lawsuit was filed, putting 1,000 people out of work.
John Watson, currently vice chairman of Chevron and soon to be its chairman and CEO, shared this anecdote to illustrate how California has acquired a reputation for being unfriendly to business. His fellow panelists agreed that state bureaucracy needs to be held accountable for its impact on job creation.
California has long been seen as the land of opportunity. But past results offer no guarantee of future performance. Especially in today's economy, state officials need to focus like never before on retaining companies and creating jobs.
David Crane, special advisor to Gov. Arnold Schwarzenegger, emphasized that businesses need a talented work force, certainty and market opportunity. California can deliver that by emphasizing education, tax reform and budgetary reform. But he warned that the state is facing hard decisions about long-term investment in human capital.
"We're either going to embrace education and infrastructure or welfare and incarceration," Crane declared. He noted that the state has lagged the nation as a whole in employment since 1991 and urged a greater focus on understanding this structural deficit.
Perry Wong of the Milken Institute agreed that California is not just facing temporary impacts from the current recession. Its high-tech manufacturing base has disappeared over the years. He insisted that California is going to have to work harder than ever to change perceptions.
Entrepreneurs are now global, observed Eric McAfee of McAfee Capital. If the cost of doing business is too high or too much red tape slows start-ups, they will go elsewhere. Despite the challenges, McAfee thinks new technology and federal spending in fields like renewable energy make this the most exciting time ever to be a California entrepreneur.
Is it possible to reconcile California's commitment to environmental protection with business growth? Watson, along with moderator Nancy McFadden of PG&E Corporation, argued that strong environmental standards can go hand-in-hand with a vibrant economy. The key is to streamline the regulatory process. Crane added that government should set the goals, but then let industry choose the most efficient way to get there.
I highly recommend that anyone interested in Nevada County Economic development review the pannel session videos, especially the Panel Session: Keeping Companies and High-Paying Jobs in California.
