Regional Cooperation Key to California Recovery

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The future of the Golden State and the well-being of every Californian depend on a thriving economy. A robust state economy means well-paying jobs for workers, increased business development opportunities and sufficient funding for essential state services.

With an increasing number of businesses closing their doors and more workers losing their jobs, we have seen a precipitous decline in state revenues that has led to steep and abrupt cuts in everything from health care and education to prisons and infrastructure investment. With some of the highest state business and personal income tax rates, an overly burdensome regulatory environment, and a structurally dysfunctional state government that has recently been in budgetary gridlock, California is increasingly viewed as a place with an environment that is hostile to businesses, and as a consequence, the jobs – and tax revenue – businesses create.

With the state’s unemployment rate exceeding 12 percent, sustainable economic growth and job creation clearly must be our policymakers’ highest priorities. California has enormous economic capacity and potential, but we need to develop consensus around a statewide strategic plan for economic development that gets all the state’s economic regions to come together, invest and behave according to a shared vision for growing the economic pie and creating jobs.

Over the past year, the Los Angeles County Economic Development Corp. engaged stakeholders – more than 1,050 – throughout Los Angeles County in a series of more than two dozen public forums to develop and build support for a comprehensive, consensus economic development strategy for Los Angeles County. The Los Angeles County Board of Supervisors unanimously adopted the plan Dec. 22.

The plan, which grew from this very public process, reflects the distinct needs of the county’s economy, a $500 billion economy that is larger than the economies of either Taiwan or Hong Kong. The plan identifies five core aspirational goals necessary for economic growth and creation of more and better jobs. They are: an educated work force, a business-friendly environment, an attractive quality of life, smart land use and 21st century infrastructure. Underlying these goals is a series of 12 objectives and 52 strategies to strengthen the economy, improve the environment and invigorate communities.

Critically important

The consensus nature of the plan’s development and eventual implementation are critically important. This is truly a bottom-up, consensus-driven strategic plan for economic development. Stakeholders include business and economic development organizations, environmental groups, labor unions, the education sector, the environmental justice community and the public sector. Many of these participants will become the “champions” charged with implementing and delivering the strategies called for in the plan.

Developing a consensus plan for economic development in the nation’s most populous and culturally diverse county was no easy feat. But the risks associated with not having a strategic plan – including reduced quality of life; disinvestment; and a degrading economic environment that impairs job growth, business attraction and retention – are too great not to do so.

The risks to California of failing to adopt a proactive strategic plan for economic development are great. We all appreciate and value the sheer size, tremendous diversity and global significance of the California economy, but our state has fallen short of its full economic capacity and potential. Over the last quarter-century, California has noticeably underperformed in terms of job creation for its 36.8 million residents. From 1980-2008, the state added approximately 14.7 million residents, but only created about 4.3 million jobs for those residents. California lost an additional 670,000 jobs in 2009. And Chief Executive magazine has ranked California last among the states in terms of places to do business for the past four years.

Given this state of affairs, short-term actions – including, for example, business incentives, regulatory streamlining, and adequately resourced business retention and expansion programs – are certainly necessary. However, longer term, California’s policymakers must lead an effort to engage stakeholders from each of the state’s economic regions to coalesce in support of comprehensive, shared strategies to stimulate economic recovery and serve as a framework for long-term economic growth. This consensus-driven plan is essential to stimulate investment, create more and better jobs, and promote equity, the environment and a better quality of life for Californians.

Bill Allen is the president and chief executive of the Los Angeles County Economic Development Corp.

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