For Release Sunday, January 9, 2011
Citiwire.net

Faced with 12 percent unemployment and a $26 billion budget deficit, California offers a perfect storm of economic disruption and public paralysis. This is the product of not only the national financial meltdown, but also a self-imposed governance crisis caused by years of ballot box initiatives as well as budget overruns.

However, below the chaotic surface, the grassroots has been active in responding to this dual economic and governance crisis. The seeds were actually planted in the 1990s during an earlier economic downturn. In regions as diverse as Silicon Valley and the Sierra Nevada, new collaborations of business, government and community leaders were launched to address complex challenges spanning multiple political jurisdictions. Joint Venture Silicon Valley and the Sierra Business Council became models for other regions. Next, the James Irvine Foundation provided seed funding to support similar collaborative regional initiatives in urban and rural areas across the state based on these models. Then some of the leaders from these regional efforts joined state government and began to incorporate this new regional approach into state policies, integrating housing, transportation and land use planning, connecting workforce and economic development efforts, and promoting broad-based telecommunication strategies.

In 2008, the Morgan Family Foundation launched the California Stewardship Network as a civic venture, investing $ 1.5 million over 2 years in matching grants to 10 economic regions that agreed to focus on breakthroughs led by stewardship teams composed of business, community and government civic entrepreneurs.

Stewardship is defined as the careful and responsible management of something entrusted to us. The network focuses on “stewardship of place” — which requires simultaneous attention to the economic, environmental and social dimensions of the region. Or simply put, stewardship equals personal responsibility for community-wide well-being, not advocacy of one interest over another.

While each regional team has developed its own stewardship strategy, all share a common approach. Typically, these strategies are (1) data-driven, (2) based on economic regions and industry clusters, (3) successful in sustaining the engagement of business, (4) effective at integrating economic, social, and environmental considerations, and (5) innovative in their approach to public-private partnerships in implementation. The teams represent the diversity of California ranging from San Diego and Los Angeles in the South to the Silicon Valley and Sacramento Valley, the Fresno Region and the Central Coast to the Sierra Region, Sonoma and Butte Counties and the Redwood Coast near the Oregon Border. These regional groups meet on regular basis and exchange best practices (see www.castewardship.org)

These regional stewardship teams are currently focusing on economic development, education and green prosperity. A prime example is the Los Angeles County’s first-ever Consensus Economic Strategy, which was developed through a process that engaged of over 1,000 business and civic leaders. The convener was the Los Angeles Economic Development Corporation, a regional business group, but the plan has been adopted by the County Board of Supervisors and 88 cities including the City of Los Angeles, as well as the labor and environmental communities. The strategic plan commits its partners to specific actions to invest in an educated workforce, implement a 21st Century Infrastructure, promote smart land use, enhance quality of life, and create a business-friendly environment (www.laedc.org).

Other regions have developed green prosperity strategies including a “Climate Prosperity Strategy” for promoting clean energy alternatives while reducing greenhouse gases in Silicon Valley (www.jointventure.org) and a “Green Capital Alliance” in Sacramento Region (www.greencapitalalliance.org). Sonoma County’s team has focused on closing the achieving gap for Hispanic students through mentoring and other programs (www.sonoma-county.org). Butte County has taken a similar approach. The Fresno region in the San Joaquin Valley launched regional jobs and human investment initiatives. (www.fresnorji.org).

Building on these grassroots results, the regions are now working together to affect state policy. Leaders from the network drafted a shared agenda for action titled Thriving Regions Lead to a Thriving State; its elements were then communicated to candidates during the 2010 election cycle. (http://castewardship.org/Artwork/ThrivingRegionsThrivingState.pdf)

As Jerry Brown now returns to the California governorship, he must confront a challenging budget deficit and record high unemployment as well as long term governance challenges. His top three priorities stated during his campaign were as follows:

• We must get California working again — both its government and its people
• We need an honest budget and a government closer to the people
• We need leadership that can attract investment and new jobs, promote quality education and protect public safety

California’s dual crises could be an opportunity for transformation. At the December 2010 California Stewardship Exchange, regional stewardship groups considered the following questions: Does the grassroots stewardship approach that has been emerging from the bottom up, based on a recognition of regional diversity and the importance of collaboration, provide a solution to the both the economic and governance challenges facing California? Is this a practical way to help bring government closer to the people, with stewards communicating to state government the needs of their diverse regions through an ongoing dialogue and partnership?

Sometimes it takes a crisis (or two) to generate a fundamentally new response. In California, a grassroots movement has been underway for several years, and is now culminating in a bottom up transformation of several economic regions. At the same time, new state leadership is looking for innovative ideas and partners. If stewards step forward at all levels, the next few years could produce a new state-regional model for both California’s economic recovery and long-term governance.

As Margaret Mead said many years ago: “a small group of thoughtful people can change the world. Indeed, it’s the only thing that ever has.”

Doug Henton is a Citistates Associate who is CEO of the Silicon Valley-based firm of Collaborative Economics. In the early ’90s, he helped manage the start-up of the Joint Venture: Silicon Valley Network. He advises the California Economic Strategy Panel strategy. He founded Collaborative Economics in 1993, after a decade at SRI, where he directed local, state and regional economic strategy projects spanning Florida to Texas to California.

John Melville is president of Collaborative Economics. Together with Doug Henton he helped launch Joint Venture Silicon Valley and other regional collaboratives in California. He is a consultant to California State Workforce Investment Board working with regions in California on innovative collaborative workforce strategies.

Becky Morgan is president of the Morgan Family Foundation and was the first president and CEO of Joint Venture Silicon Valley. She was state senator from Silicon Valley and a county supervisor from Santa Clara County. The Morgan Family Foundation funded the California Stewardship Network

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What if everyone wanted to do the right thing but didn’t know how to work together to achieve a shared outcome?

That pretty much sums up the challenge we face in realizing the potential of a green economy. The Obama Administration has made it a high priority. Most states and localities recognize the benefits of energy efficiency and renewable energy. Many businesses now understand the savings from greater efficiency and profits that can be gained from investing in the renewal energy. Labor sees this as a source of jobs.

So what is holding back the growth of a green economy? As we debate national cap and trade legislation, our fragmented, stove piped intergovernmental system is slowing down the implementation of over $40 billion in energy funding. Few states and regions have developed comprehensive energy strategies.

What can be done? It is important to look at this challenge from the bottom up. How can regions bring together all the key public and private players–local, state and federal to focus on areas of greatest comparative advantage based on the best available, objective data? Good information on the emerging green economy can help states and regions develop more effective strategies.

The dimensions of the green economy are now becoming clearer after the release of the Clean Energy Economy report by the Pew Charitable Trusts, and Green Economy State Profiles by the National Governors Association. Building on a unique green establishments data base methodology first developed by Collaborative Economics for the California Green Innovation Index for the nonprofit Next 10, we now have a better picture of the specializations across 15 different segments of the green economy in the 50 states. The good news is that each state has its own specializations and nationally green jobs have been growing faster than overall jobs. The next step is to bring this same information to metro level.

One tool for bring together key stakeholders to develop regional strategies based on this kind of diagnostic information is a negotiated investment strategy first tested as local experiments by the Kettering Foundation in the late 1970s and early 1980s. Teams of local, state, federal officials and private sector leaders negotiated federal, state and local governments’ urban investments, with the help of a mediator, to make sure they worked efficiently and supportively of each other.

More recently, the Climate Prosperity Project initiated by the Rockefeller Brothers Fund has launched a series of regional pilots that are helping to bring together key stakeholders to develop strategies that address climate issues from an economic perspective, recognizing the immense benefits possible benefits for their regions–in savings, business opportunities and jobs

For example, Joint Venture Silicon Valley convened business, government, academic, utility and community leaders to negotiate a Climate Prosperity Greenprint that focuses on energy efficiency, renewable energy–especially solar–clean transportation and energy infrastructure. A Climate Prosperity Council has been created, co-chaired by the Mayor of San Jose with members from major businesses including Google, Pacific Gas and Electric Company, and solar companies. One of the first major projects involved a joint application to the Department of Energy for the development of smart grid and energy storage technology.

Similar climate prosperity greenprints are being developed in Portland, Denver, St. Louis and the State of Delaware. While each region will develop their own strategies based on their unique comparative advantages, they will be developing their greenprints using a similar analytic framework and common information about green specializations.

For example, the St. Louis region is now developing a green economic profile to guide the development of its greenprint. This metro level profile will identify the regions relative strengths in terms of green segments that build on its existing strengths in such areas as green building design and bioenergy.

What does the national Climate Prosperity Project bring to the equation? It offers an economic perspective on climate and energy issues–recognizing their central importance–adding mediation to bring key government and private stakeholders together to think through and develop a green negotiated investment strategy.

By getting our act together at the regional level, there is much that can be done now to promote economic opportunity in the emerging green economy. There will be many different regional solutions rather than a single national solution to our climate and energy challenges. What’s vital is that we get to work, quickly, defining and implementing them.

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What do Portland, Ore., and California’s Silicon Valley have in common?

Both are leaders in the critical transition to the new paradigm described in Curt Johnson’s recent Citiwire.net article — a high efficiency and environmentally low impact model, reversing Americans’ profligate, high-impact, low-efficiency culture of the past half century.

And it works, economically. Since the 1970s, Portland has prospered, transforming its economy from forest products to high-value technology, simultaneously increasing incomes and boosting property values. It’s also been able to contain suburban spillover through an urban growth boundary. Portland has built a light rail system, increased urban densities, and rolled back its greenhouse gas emissions.

Portland’s Green Dividend, a recent CEOs for Cities report, documents how metropolitan Portlanders save $2.6 billion a year on combination of reduced transportation expenses and reduced commuting and travel time. Increased disposable income for individuals plus a more sustainable community — what’s not to like about that?

All of California has done well through the energy-saving building and appliance standards, plus utility efficiency programs, enacted during the energy crisis of the 1970s- saving a total of $56 billion. The state’s per capita energy consumption is now lower than it was in 1975 and greenhouse gas emissions are second lowest among the 50 states, according to the California Green Innovation Index.

Silicon Valley epitomizes California’s progress. Since 1990 it has created over 2,500 “green” jobs; in 2007 its venture capital investments in clean technology grew a notable 94 percent to over $1 billon. San Jose Mayor Chuck Reed recently announced an amazingly ambitious Green Vision — to create, within 15 years, 25,000 clean tech jobs, reduce per capita energy use 50 percent, receive 100 percent of electric power from clean renewable resources, and ensure that the entire public vehicle fleet runs on alternative fuels.

From the times of Copernicus and Galileo on, movement to a new paradigm of how society works has cost time and triggered some turmoil. (Imagine the shock: learning the earth was not the center of the universe but rather circled the sun).

But as pollster John Zogby rightly notes in his new book, The Way We’ll Be, “We are in the middle of a fundamental reorientation of America character away from wanton consumption and toward a new global citizenry in an age of limited resources.”

So what makes us think we’re at a critical turning point, right now?

+ Demand for oil is exceeding supply — a signal that our immense reliance on petroleum as an energy source must end. Rising oil prices are causing economic disruptions but also signaling opportunities for alternatives. It’s no longer a mystery: Energy efficiency and renewable energy sources are the keys to our future.

There’s a critical question, though: Can we make the transition rapidly enough to address our basic energy needs while reducing global warming — and keep our economy healthy? We’ll need massive innovation to pull it off.

+ An innovation economy, based on human talent and ideas, is fast emerging as a key to the future. Many large corporations and financial institutions are in trouble. If we’re going to create sustainable prosperity with a smaller carbon footprint, our hope lies in a host of nimble, smaller-scale enterprises operating within globally linked networks.

Are we seeing glimpses of the coming transformation?

I believe so. From my vantage point in Silicon Valley, I’m watching dramatic rises in private investment in renewable energy such as solar, wind and batteries for low emission vehicles. Small yet globally-attuned small businesses are flowering, using information technology to find their niches in world markets.

And we’re making smarter decisions at the local level. Between 1998 and 2007, Silicon Valley’s average residential density in newly approved developments increased from six to 21 units. As the area has gotten richer — its per capita income is now 57 percent higher than the national average — it has also become greener and more efficient.

Several other regions and states — Seattle/King County, Denver, St. Louis, Cleveland, Minneapolis-St. Paul and Maryland among them — are joining Silicon Valley/San Jose in the Climate Prosperity Project sponsored by the Rockefeller Brothers Fund, the Environmental Defense Fund, and Global Urban Development. The goal: to demonstrate how efficient economic development with lower environmental impact can produce significant “Green Savings, Green Opportunities, and Green Talent.”

Are we at the tipping point? My antenna say “yes” — that the evidence of a creative new paradigm is all about us. Arguably, the new paradigm’s own logic will propel it forward. But the destructiveness and waste of the old paradigm is so huge, the sustainability needs of this new century so compelling, that it’s certainly our job — at every possible turn, in every city region and state, in government and business alike — to keep pushing the creative new paradigm forward.

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