What’s Wrong With California’s Economic Development Plan?

By California Labor Federation Legislative Director Angie Wei

If a business wants to contact someone in state government to bring jobs to California, where would they start? The answer is a lot more complicated than you might think.

The Trade and Commerce Agency used to be the de facto point of entry for employers to state government. But it was dismantled in 2003, and its separate commissions and departments are now scattered throughout the state bureaucracy, leaving them uncoordinated, unfocused and underutilized. There are potentially over 100 separate and distinct economic development plans in the state, involving dozens of state agencies that touch on jobs, economic development, state economic resources and the like.

The Little Hoover Commission released a February 2010 report that documents this lost function in state government. It said it best:

The current economic crisis has made clear that just when the state’s programs and services are most needed, they are not delivering their true value, in large part because they are not organized in a way that the businesses and cities can use them – or even find them.

This disaster known as California’s economic development plan is what inspired the California Labor Federation to sponsor legislation to rectify this problem. SB 1259 (DeSaulnier) would create a cabinet-level Office of Economic Development and Job Creation, which would be tasked with streamlining and focusing the state’s economic development activities. The Labor Federation is pleased to be partnering with the California Manufacturers and Technology Association to fight for passage of this bill together.

While California’s Governor, Republican legislators, the Chamber of Commerce and other business interests keep pounding away at the state’s bad business climate, they have completely failed to recognize is that our business climate is a self-fulfilling prophecy. Who will want to come to a state whose political leaders are leading the charge in talking smack? Why aren’t our lawmakers providing the leadership to promote our state’s assets, like our trained workforce, or our public education system, our weather, our natural beauty, our infrastructure, and all the things that make California great? Why aren’t they promoting our positives, instead of harping on the negatives?

In a Time Magazine article from October 2009 entitled “Why California is Still America’s Future,” Michael Grunwald said:

Ignore the California whinery. It's still a dream state. In fact, the pioneering mega-state that gave us microchips, freeways, blue jeans, tax revolts, extreme sports, energy efficiency, health clubs, Google searches, Craigslist, iPhones and the Hollywood vision of success is still the cutting edge of the American future — economically, environmentally, demographically, culturally and maybe politically. It's the greenest and most diverse state, the most globalized in general and most Asia-oriented in particular at a time when the world is heading in all those directions. It's also an unparalleled engine of innovation, the mecca of high tech, biotech and now clean tech. In 2008, California's wipeout economy attracted more venture capital than the rest of the nation combined. Somehow its supposedly hostile business climate has nurtured Google, Apple, Hewlett-Packard, Facebook, Twitter, Disney, Cisco, Intel, eBay, YouTube, MySpace, the Gap and countless other companies that drive the way we live.

So what’s wrong with California’s economic development plan? Well, for starters, we don’t really have one. But hopefully, under a new Governor and a better administration, we will be able to create a productive Office of Economic Development and Job Creation that will result in a comprehensive economic development strategy that will help restore the Golden State’s unparalleled shine.