For Release Thursday, May 3, 2012
As Mark Twain once said “the reports of my death are greatly exaggerated.” With unemployment soaring to over 12 percent and a loss of over 1 million jobs during the Great Recession contributing to a 20 billion dollar state budget deficit, many commentators have remarked that California’s better days are over. From the perspective of Sacramento and Washington, it would be fair to say that California has its share of fiscal problems and governance challenges to overcome.
However, from the perspective of California’s diverse regions, I am happy to report like Mark Twain that, “the reports of California’s demise are greatly exaggerated.” Regional stewards from across the states are not waiting for solutions to come from either Washington or Sacramento. Leaders from business, local government, education, labor and environmental groups are joining together for the first Annual California Economic Summit to create a jobs and competitiveness agenda to address our long term challenges.
The California Stewardship Network sponsored by the Morgan Family Foundation has been creating momentum for the regional movement in California for several years. As is the case across America, California “regions are on the rise” for the same of the reasons outlined in the recent Citistates report: American Regions Take Center Stage. Our regional economies are our source of competitive advantage. They are committed to economic vitality, equality of opportunity and environmental quality. They get the idea that collaboration is essential. They are developing effective regional strategies and learning how to partner with the state on several critical workforce, transportation, land use and environmental issues.
While the Great Recession hit California hard with the loss of over 700,000 jobs in construction and related industries alone as the housing bubble burst, there have been some recent signs of recovery. The state has gained over 300,000 total jobs and seen a decline in its unemployment rate, from 12.5 percent to 10.9 percent, since 2009.
However, a number of structural challenges remain. At a time when skills are more important for competing in a global economy, a significant portion of young people are falling further behind in education.
California’s economy is at risk because we have not been investing in our future for many decades. The Think Long Committee for California has estimated that we face a $765 billion infrastructure deficit. We have created a government that not only fails to create a positive climate for employment but our once-great political institutions are not working, too often mired in gridlock.
How do we find a path out of our current situation? We start by recognizing that California is, in fact, an economy of regions. Silicon Valley and the Bay Area, Greater Los Angeles, the Central Valley, San Diego, the Redwood Coast and Sierra Nevada all have distinctive industries and their own unique economic environments.
Our diversity can be a real strength for California. It also presents major challenges. This recession has put a spotlight on the reality that we have two distinct Californians — the coastal regions that are doing better than the national recovery. And our inland regions, that are lagging far behind. For example, last December the unemployment rate in inland Imperial County was 27 percent while unemployment in coastal San Mateo County was 7.0 percent. The Bay Area is leading California out of the recession with robust growth, spearheaded by technology and trade, while inland regions are still dealing with the significant loss of jobs in the construction industries.
To address these long term challenges, regional stewards from across California will gather in Santa Clara on May 11 for the First Annual California Economic Summit, organized by the California Stewardship Network and California Forward. The California Stewardship Network is the alliance of regional partnerships devoted to promoting economic vitality and quality of life. California Forward is a nonpartisan, statewide organization promoting solutions to governance challenges.
Leading up to the May 11 Summit, there have been 14 regional forums with thousands of participants identifying priorities based on each region’s known needs. Cross-regional action teams are now developing recommendations to address top priorities in the areas of workforce, innovation, capital, infrastructure and regulation (See www.caeconomy.org for more information on the Summit and recommendations in each of these areas).
What are we learning from this unprecedented effort to create a shared economic agenda? First, a large and diverse state with difficult governance issues can come together at the regional level to define its unique challenges and work together to find common ground on pragmatic solutions. Rather than running all major issues through the “mainframe” of state government, we see a more distributed model appropriate to our modern economy. Second, the summit is utilizing advanced information and social media tools to connect participants across the state, sharing information and solutions. In addition to a very active website with constant blogs and tweets from our regional forums, the summit will employ an innovative crowdsourcing technology to allow the participants to comment on draft initiatives in real time, enhancing prospects for a broadly shared find consensus. As a leader in information technology, California should try to use its technology to advance the cause of governance. By necessity, a state as big as California, with its vast distances among regions, requires new ways of working together.
In the end, the success of the summit will depend on the commitment of regional stewards to champion key initiatives and work together at the regional level and with state leaders to implement new solutions. We believe summit process will does not end on May 11 — that it’s only the beginning.
Doug Henton is Chairman and CEO of Collaborative Economics based in San Mateo, California www.coecon.com. In addition to working with most of regions in California for the past several decades, he helped design the 2001 Oregon Business Plan Summit in 2001 (a model for the California Economic Summit). He is a Citistates Group Associate.
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