A Key Step Toward Institutionalizing Regions-Up: California’s proposed Office of Regional Economic Development Initiatives

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Photo Credit: California Jobs First State Economic Blueprint

By Egon Terplan and Kate Gordon

Since its founding nearly 20 years ago, California Forward (CA FWD) has been focused on bringing regional voices into the state policy and political mix. As Californians face economic uncertainties around the impact of AI, shifting global alliances and supply chains, and climate disasters, we feel more than ever that California’s key to successful economic development is regional leadership.

We also know that economic development takes time. For our diverse regions to thrive and build long-term resilience, it’s important to lock in durable structures for funding, capacity building, and strategic growth—enabled by the state but led by our regions themselves.

That’s why we applaud the Governor and Legislature for establishing the “Office of Regional Economic Development Initiatives” (REDI) within the Governor’s Office of Business and Economic Development (GO-Biz). While the regional functions at GO-Biz have existed for some time—notably leading the state’s work to implement California Jobs First—a more permanent structure and staffing were only just formalized through the passage of budget bill SB 172.

The REDI office will provide key support from the state to regions working to implement their economic strategies, something CA FWD and our partners at the California Stewardship Network, along with allies across the state, have specifically called for in a set of papers and recommendations over the past two years. Here are just a few of the office’s key functions: 

  1. “Maintain, update, and implement, in coordination with the Labor and Workforce Development Agency, the California Jobs First State Economic Blueprint, which is a statewide economic development strategy built on the priorities of California’s distinct regions. 
  2. Coordinate interagency activities to promote job creation, attraction, and access in alignment with the statewide economic development strategy and with feedback from employers and industry, as appropriate. 
  3. Support regional partners in developing, maintaining, and implementing their regional economic development strategies. 
  4. Provide technical assistance to local governments and economic development partners, including, but not limited to, project financing, utilizing place-based and other geographically targeted economic development programs, and conducting site development and certification activities.” 

Importantly, SB 172 also includes a fifth function to the state’s economic development approach with a directive to “collaborate with the Office of Emergency Services to support disaster preparedness and response activities, as well as recovery efforts, with regard to regional economic impact.” At CA FWD and through our broader Climate-Smart Economy project, we are laser focused on the impacts of climate disasters on our regional economies, and the importance of finding new and dedicated funding streams to drive greater climate resilience.  

Bottom line: These five functions are a great foundation for regional economic development, and we’d love to see even more. Earlier this year, we laid out an ambitious Vision for State and Regional Economic Partnership that builds on the regional work at GO-Biz and the Administration over the past seven years. We took a hard look at what other states are doing to coordinate and drive strong state-regional economic development models. We also engaged closely with the Brookings Institution on their just-released playbook for new governors as we began to put together our own set of recommendations for the incoming Administration.

What’s Next 

With a new Governor arriving in 2027, when so many macroeconomic factors are in flux, we believe it’s time to truly lean in on a durable model for sustainable, resilient, and inclusive economic growth. That means:  

  • providing consistent ongoing funding for regional plans and projects,  
  • embedding state staff in regions,  
  • creating a shared state-regional economic data platform, and 
  • formalizing the interagency coordination function in a key body within state government, such as the Strategic Growth Council.

These activities may require unifying the state’s economic development programs under one agency or department “that explicitly aligns economic strategy with state climate, energy, workforce, and education goals.” That’s something we see in most other states and countries, and it may be time to build it here in California as well. 

SB 172 gives California a strong foundation for action. We look forward to building on it, working alongside GO-Biz, the Legislature, and the incoming Administration, as we strive for an even stronger economic future. Because if we weren’t striving and imagining the future, we wouldn’t be Californians.

You can read more of the CA FWD regions-up white papers here: