Summit Day 2: A tale of two Californias

150 150 Christopher Nelson

(photo: Violeta Vaqueiro)

“A meeting is not a result,” said Jim Earp, of the California Alliance for Jobs, in the keynote panel kicking off the second annual California Economic Summit.

The Summit is a non-partisan, regions-driven approach to addressing the economic challenges facing California, but no one believes those challenges are as far-reaching and diverse as the population of California itself and won’t be solved by 450 business and legislative luminaries talking for one day in room.

In fact, the Summit this year is focusing on the fact that there isn’t one but two Californias that need fixing. Conventional wisdom would peg this as northern versus southern California. Surfers and Silicon Valley, right? 

Those who live in those regions might think such is the case, but just as there is so much more to the state than the Bay Area and Los Angeles, the state is bifurcating into western, coastal prosperity and eastern, inland poverty. Likewise, urban areas have a widening divide between rich and poor.

“The emergence of two Californias is the most serious, real challenge we face today,” said Kish Rajan, Director of the Governor’s Office of Business and Economic Development. “Economic inertia is setting in and the government allowing it to happen is antithetical to the American Dream.”

Economic recovery is most certainly underway in California as it is in the rest of the country. But is it touching everyone or only those in the investment class, the so-called “one percent?” The short answer to that question is yes. Unemployment is 5 percent in Marin yet 26 percent in Imperial, for example.

“California is heading toward a poverty crisis,” said John Husing, chief economist of the Inland Empire Economic Partnership, during a panel on the state of prosperity in California.

In order to alleviate the inland and urban poverty, the Summit is honing in on an economic principle called the triple bottom line. A normal bottom line refers to profit, which is defined as revenue minus expenses. But if a profitable company is polluting the environment or making a product that is harmful to consumers, the net result is not a profit for society.

The triple bottom line weaves social and environmental benefit into profit margins for an economic philosophy that is much more holistic. The idea is to grow middle-class jobs as a means toward long-term economic prosperity. The onus is on policymakers to act accordingly on the aligned priorities of California’s diverse regions. Richmond clearly does not have the same needs as Stockton or La Jolla.

“The triple bottom line is absolutely the right approach,” said California Senate President Pro-Tem Darrell Steinberg. “It combines climate change, transportation, housing and land use in a way that incentivizes regions to not only think collaboratively, but to act collaboratively.”

With almost 24 percent of all Californians living below the poverty line, there is much work to be done. A meeting is not a result, but it is most certainly the path to one.

On Thursday, breakout sessions helped set the discussion points for Friday’s summit. During one session focused on manufacturing, there was a spirited discussion on how to make sure manufacturers of all sizes were able to fill openings with appropriately skilled, young workers. Many still rely on employee referrals and the newspapers, not knowing that government resources exist to help fill job openings and that California’s community colleges are the epicenter for training people with the regionally specific skills.

The agriculture-heavy San Joaquin Valley, for example, primarily has food-processing plants. A representative from the San Joaquin Valley responsible for one of their manufacturing innovation hubs (or “iHub”) was able to directly connect with someone behind the California Network of Manufacturing Innovation (CNMI), which is a statewide resource for connecting employers and potential employees in the manufacturing sector, to bridge the gap between jobs and skilled labor.

That is just one real-time step toward a result that happened at this meeting. Similar connections were made in the six other focus initiatives of the Summit: infrastructure, working landscapes, housing, regulations, access to capital and workforce development. Many are intertwined. Manufacturing breeds infrastructure but needs a developed workforce and capital to keep the machines humming.

Obviously collaboration is key, as is leadership. With many state and local legislators mingling with high-ranking members of the public and private sector, this meeting most certainly has the potential to turn into results. The Summit will be cataloguing every thought and idea with the intention of bringing them to fruition alongside all of those in attendance over the coming year.

As Rajan said, it’s about regional leaders continuing to ask the question “how am I going to take charge of our destiny at this level?” Leadership will ensure results.

“We are the leaders we’ve been waiting for,” said Lenny Mendonca, Senior Partner at the McKinsey Group and co-chair of the California Forward leadership council. 

“I think this is a real opportunity for us to be those leaders.”


Christopher Nelson

All stories by: Christopher Nelson