Originally written for the San Jose Mercury News.
“Game changers.”
In Silicon Valley, we use this term for cutting-edge products and processes that leapfrog the competition.
When Jerry Brown becomes governor on Monday, he must thoughtfully enact a series of game changers to propel California back to prosperity and international prominence.
To his credit, he’s invested every day since Election Day on two items — California’s budget deficit and growing California’s economy.
His team reached out to the Silicon Valley Leadership Group requesting a white paper answering the following question: “What would it take from Sacramento to foster an environment for private sector employers to grow technology and manufacturing jobs in California again?”
This is absolutely the right question.
Silicon Valley competes globally, yet we also compete against other states. Here’s context.
California hasn’t had a net increase in employment this decade. Not one job. During the same period, Texas added 1 million private sector jobs and Arizona added 500,000.
A top California renewable energy company just decided where to build a major new facility. The decision was rightfully driven by economics, including taxes and fees. After balancing costs and incentives, for every five new jobs they could create with a facility in Texas or Colorado, they could only afford four jobs in California. They chose Texas.
To compete, we had better know what other states and nations are doing to attract high-skill, high-wage, high-tech and manufacturing jobs — and thoughtfully determine what California must do to compete.
Although our White Paper isn’t due until Jan. 10, here are some game changers under consideration:
Economic development strategy: The governor must take the lead in creating a specific plan, benchmarked against other states and nations, with the help of a Cabinet-level position and a Board of Business Advisors. Like competitor states, our governor should be California’s Chief Business Recruitment/Retention Officer.
Education: California’s K-12 and college systems must return from near-worst to first. We need the tools to track the progress of each student with a robust “longitudinal data system” to better meet individual needs, curtail the dropout rate and reward progress. We must also determine who is accountable in state government for student achievement, and equip that person with the responsibility and resources to strengthen student, school and teacher performance.
Reform: The City of Vallejo stands as a stark reminder that California needs pension, budget and governance reform. Californians will look skeptically at any talk of additional revenue without a concurrent and comprehensive cleanup of our pension system, along with thoughtful and thorough budget and governance reforms like those proposed by California Forward.
Infrastructure: In spite of Gov. Schwarzenegger’s progress, California continues to crumble. My California Transportation Commission colleague Jim Ghielmetti is spearheading an effort to develop a long-term statewide transportation plan in coordination with every region in California. We must fully fund that plan with a voter-approved gas tax with assurances every cent collected builds and maintains that statewide system.
Renewable energy: Through legislation by State Sen. Joe Simitian, California adopted a standard that 20 percent of our energy portfolio would come from clean power sources by 2012. That target is within range. In Silicon Valley, when we achieve a goal, we aim higher, and the senator has introduced a new target of 33 percent by 2020. The Leadership Group concurs, yet we must ensure the new target meets the twin goals of creating new jobs while also keeping energy costs down for the employers already in California.
Resources and revenue: California must continue to make serious and painful cuts to balance the budget. The $28 billion hole will also require additional revenue. When looking at new funds, we must adopt a “We’re in this together” mind-set. If something is important to California’s future, then all Californians must help fund it.
The Leadership Group is open to supporting the restoration of the Vehicle License Fee, or extending the temporary tax increases enacted in 2009, as long as the proposal is voter-approved, and accompanied by the reforms above.
Invest in California’s Innovation Economy. From choices in IT investment, incentives for manufacturing and R&D jobs, renewable energy and public-private partnerships, we must support companies that call California home. Innovation economy jobs aren’t our birthright. We must compete for them every day.
On Monday, California changes governors. We must now change the game and restore the Golden State’s luster.
The 335 CEOs who comprise the Silicon Valley Leadership Group aren’t partisan. We’re pragmatic. We have little interest in ideological extremes lurching our state left or right. Rather, we stand ready to work with Gov. Brown on game changing solutions.
Carl Guardino is president & CEO of the Silicon Valley Leadership Group and host of “The CEO Show” on 1590 KLIV. He wrote this article for this newspaper.
