California and its economy enjoy many strengths and advantages compared to its national and global competitors. The world’s eighth largest economy, the state includes industries with significant long-term growth potential. California is the nation’s leading center of technology and innovation, capturing $1 in every $2 of the nation’s venture capital funding. It is the dominant entertainment center with 40% of the nation’s jobs. California also is the leading Pacific Rim center for exports, foreign trade and investment. It remains the nation’s largest agricultural producer and exporter, and tourism has solid long-term growth prospects as consumers around the world experience rising incomes.

But, the competitive climate has become even more challenging for California and the nation. Other countries such as China, India and Brazil are producing strong economic growth and making rapid advances in technology while investing aggressively in infrastructure and education. No longer is America the only center of technology and innovation. Instead, both California and the nation are experiencing high rates of high school dropouts and failing to increase the number of college graduates, particularly in science, technology, engineering and math.

California, and the nation as a whole, still can seize economic opportunities, but only if both overcome these multiplying sets of challenges – challenges made even tougher by the ongoing economic downturn and lingering effects from the “Great Recession.” Failing to act with a real sense of urgency will threaten the essence of the California lifestyle, which is built on the state’s middle class, its workers and their families and is fueled by opportunity and innovation in an evolving global economy. Cultivating a healthy economy in California will provide the good jobs that pay family-supporting wages.

In setting forth how California best can adapt to these challenges, the Think Long Committee for California Task Force on Jobs, Infrastructure and the Workforce first analyzed the results of 20 years of prior reports as well as conducted interviews and held discussions with more than 50 business, government, academic and labor leaders from regions throughout the state.

From this work, a set of recommendations emerges around three key points:

• California is an economy of distinct regions
• Productivity and innovation are key to future growth and prosperity
• Public policy should promote productivity and innovation in both the public and private sector

Since California is an economy of distinct regions, any statewide economic strategy that seeks to bolster broadbased prosperity and a healthy middle class of skilled workers must be built “from the bottom up.” Further, such a strategy requires both reducing the cost of doing business by streamlining our complex regulatory process and adding value to the business climate by investing in infrastructure, innovation and people.

As it establishes an economic strategy, the state should focus resources and policies where its strengths and comparative advantages lie: its climate; the relative size of its market; a highly skilled workforce; regions that are hubs of innovation; and access to trade with Asia and Latin America.

The Task Force also carefully reviewed the often repeated criticism that California is a terrible place to do business. These complaints have been around for decades, through good times and bad, and there are dissenting views. Here is where there is no dissent: Good customer service is essential, whether one is talking about a business or a government agency. California must provide that higher level of service in order to compete with other states and nations. As we recommend in this report, it can start by providing single points of contact for interested investors and businesses. Consolidation of duplicating agencies and streamlining regulations can save money over the long term, but the main immediate payoff will be in better customer service.

Traditionally, the debate about creating an economic strategy for California has revolved around two competing definitions of a good business climate:

• Cost-Driven: In this view, a good business climate is defined as the absence of high taxes, excessive regulations, high labor costs and high utility rates. Businesses are assumed to be cost-driven and thus locate and grow in environments that provide the lowest-priced inputs (land, labor, capital) and the least interference by government.
• Innovation-Driven or High-Road: In this view, a good business climate is defined as what is added to the environment for industries and companies. This includes a skilled workforce, accessible technology (often from a state university), capital markets, quality infrastructure and a network of suppliers. Government has an important role to play in helping to create and maintain this type of business climate.

As noted, a competitive business climate for California requires both critical investments that add to productivity as well as policy reforms that reduce the costs and complexity of doing business.

The key to high-road success is public investment to attract private investment. California’s strengths are its places and people. William F. Miller of Stanford summarizes the direction for a high-road state economic strategy:

What works? What is effective are “people and place” policies. What does not diffuse away quickly are infrastructure and workforce. Although a few key people may be mobile, large numbers of the workforce are not. Polices that support the education and training of the workforce, that support research combined with education, that support a modern infrastructure, and support the development of institutions that facilitate collaboration between business, government, and the independent sector will have lasting effects of building capacity that does not diffuse away. Develop the people and places—the habitat for living and working. Supporting the ongoing development of California’s people and places, its core strengths, should be the central approach of the state’s economic strategy.

The Task Force’s report is divided into three sections:

• An executive summary of priority recommendations for improving infrastructure, strengthening higher education / workforce development and streamlining regulation.
• Facts about the California economy that informed the recommendations.
• A full set of actionable recommendations and goals. Those include: education and budget strategies to reform and fund increased investment through strengthening local government, proposals to organize and fund critical infrastructure investments, and policies to streamline regulation.

via Think Long Committee for California | Download the Full Report

bonds CEQA financial aid public-private partnerships user feeds workforce investment boards