PROSPERITY CALIFORNIA
FORMULATING A STRATEGY OF STRATEGIES
FOR ECONOMIC PROSPERITY

If economic history remembers anything about California, it should remember that the ‘Golden State’ experienced
one of its largest periods of expansion in its history from 2001 to 2006. 

And strangely, even with this expansion there were a variety of business and economic maladies that caused
temporary statewide and regional economic downturns across the state during this period.  Examples include
the collapse of the dot.com inudstry in 2001; the debacle associated with the deregulation of the electrical
transmission industry in 2002 and the downturn in the national economy in 2003, all of which could have caused
greater economic hardship including the derailing of the state’s economy  but California’s economy persevered
and continued to grow.

But now it appears that unlike the recent previous singular economic oriented downturns that the state faced,
California is confronted with a multitude of economic conditions that could send it into a recession if not already
in one.  These economic problems stem from the ‘Mortgage Meltdown’ followed by a ‘Credit Crunch,’ increasing
gas prices that have caused increasing pressures on prices, state budgetary problems and future issues such
as drought that could bring this global power figuratively to its economic knees. Combined, these economic
conditions have caused increasing unemployment and reduced incomes for residents along with less tax revenue
for state and local governments. And in terms of economic development, it is harder to see the potential for an
economic rebound that can focus California towards achieving its potential of growing innovative technologies
while in concert enhancing existing industries where California has had a global comparative economic
advantage . . . advantages in product, promotion,  price and distribution that when enhanced with economic
development tools create the economic development outcomes of wealth, income, investment and jobs and
a business environment that keeps California on top of an economic pedestal envied by others.

Thus given the current economic condition, it is time for the profession of economic developers from across the
state to engage in a dialogue that reviews and examines recent strategies and initiatives and to identify components
from each of these that can be utilized to improve the economic growth of the state through a comprehensive
approach to achieve an economic agenda ‘Prosperity California.’

A STRATEGY FOR THE STATE, NOT A STATE STRATEGY

The demise of the state’s lead agency for the economy (Trade, Technology and Commerce Agency), gave way
to a host of organizations, like the California Economic Partnership along with other public and private entities
involved in business, community and economic development as well as workforce development, involved with
training and education along with redevelopment programs that embarked on a variety of initiatives and or
strategies.  Examples of these include the infrastructure bonds program ($42.7 billion) for housing,
transportation, water quality and supply, flood protection and the many strategies enhancing these capital
improvements such as the California Transportation Plan and the Goods Movement Action Plan.  In addition
other strategies and initiatives include efforts such as the California Broadband Initiative, the California Solar
Initiative and the California eHealth Initiative just to name a few as examples of ongoing efforts. There are
literally dozens of such efforts!

So, part of this undertaking is to identify the plethora of initiatives, plans and strategies. And, while all of these
efforts are and have been well meaning, there has been little or no connectivity amongst these efforts to enhance
the deployment and success of these actions increasing opportunities for wealth, income, investment and jobs.

But now, given that Californians are faced with these multiple economic problems it’s time for the economic
development profession in the state to take action . . .thus, the formulation of “Prosperity California”.

Prosperity California is an effort to create economic development actions.  Its purpose is to articulate, pursue
and implement actions that will enhance California’s position in the global economy and ensure sustainable
economic prosperity throughout its diverse regions

Prosperity California keeps the focus on what must be done strategically to address core weaknesses and
maximize emerging opportunities so that California can retain and gain comparative economic advantages in
successfully competing in a global economy

Prosperity California will illustrate that the state, with its long history as a incubator for innovation and
entrepreneurialism has a deep base of assets, found in its people, places, institutions and portfolio of industries
that together can rise to the challenge and lead California nationally and globally specifically if there is a plan of
action

The intent of Prosperity California is not to reinvent the wheel but to incorporate these strategies along with
other yet identified actions

Therefore the purpose of this effort is to present a framework on how to capitalize on the work accomplished to
date by embracing the opportunity to formulate “A Strategy from these Strategies for California” yielding
“Prosperity California.” 

To achieve this, the effort will involve a corps of nearly 1,000 economic development professionals. The corps
of economic developers from across the state will be joined by the progenitors of these initiatives and strategies.
The progenitors will present the goals/objectives that can best be achieved within a horizon of 1 to 3 years in the
effort to enhance their efforts. The corps of economic developers will review and examine these materials,
(numerous initiatives and strategies) in the effort to vette the ‘best of the best’ leading to recommendations and
actions that either are or could yield greater output (success) by utilizing the tools and professional services of
the economic development professionals, increasing the outcomes of economic development - wealth, income,
investment and jobs.

Beyond this review and examination, the “Corps” will identify other areas yet addressed by strategies/initiatives
such as, but not limited to emerging innovative technologies, specifically nano-technology, stem cell research,
autonomous (robotic) technology, fuel cell research and alternative fuels.  In addition, the Corps will review
over-arching issues such as ‘New Economies’, ‘Sustainable Economies’ along with major studies recently
completed by the Kaufmann Foundation and Intuit Corporation on the future of entrepreneurs and what the
forecasted changes mean to California’s economic future.

Californians understand and appreciate change. This could be because of its agricultural history and having
to make change with every growing season. Or maybe its’ because of the ever changing innovative and
emerging technologies that are produced here that it has just become second nature to its residents.  But what
ever it is, California continues to change and this is exactly the reason behind Prosperity California.

THE NEED TO SUCCEED – CALIFORNIA’S BIRTHRIGHT

While some take enjoyment in belittling the state, specifically its politics along with its regulatory and tax issues,
the opportunity to diminish this world power house only adds to the fervor of its stewards in both the public and
private sectors to make it better. 

California is an icon unto itself.  It represents inventors, entrepreneurs and free spirits.  It represents the dedication
of generations that built more than a state, but a world renowned business culture that is constantly changing,
becoming more sophisticated through the embracement of new technologies, their applications and deployment
while growing a state economy larger than any other.

California is about leadership.  It is a state that has been and continues to be ahead of others in public policy
development, such as with transportation, in the historic participation in the building of the Continental railroad
or more recently with issues of taxation, such as the infamous Proposition 13, the property tax limitation act,
or on the environment with the formulation of the most comprehensive environmental impact reporting process,
the California Environmental Quality Act or the most sophisticated natural resource distribution system for water
resources in the nation, with its aqueducts, canals and reservoirs that make up the California Project. And no one
can match its leadership in higher education with the formulation of the University of California, California State
University and its community college systems.

So, while the multiple combination of economic conditions has figuratively impacted California’s economy, those
items mentioned above and those below offer some glimmers of hope for its future.

For example, a variety of economic dynamics such as private market investments in new industries such as
nano technologies, autonomous (robotic) technologies along with public-private investments and public policy
support for other innovative technologies ranging from green and clean industries to stem cell research are
providing new economic opportunities.  For example, California’s taxpayer-funded stem-cell agency, the
California Institute for Regenerative Medicine recently awarded grants totaling nearly $271 million dollars to
build stem-cell laboratories statewide. Investment in research infrastructure to extend California’s state-of-t
he-art research capacity is a critical part of the agency’s scientific strategic plan to sustain and build California’s
global leadership in stem cell research and to accelerate the field as a whole. The awards will help build 800,000
square feet of facilities with researchers in the labs within two years. The money - coupled with additional money
from the recipients and their donors - will generate more than $1.1 billion dollars to build the facilities solidifying the
state as the world's leading research center into next-generation medicine.

In addition, California’s venture capital market has grown to the largest levels since the dot.com collapse. 
Venture capital exceeded $30 billion in 2007 and remains near or just below the same levels in 2008.

Mergers and acquisition activity in the state set a benchmark in 2007 with the largest sum of ever spent -
$140 billion by either California based businesses buying foreign, national or other state businesses or
those from outside buying state based firms illustrating that the credit crunch has not stymied the brilliance
of the Golden State.

In addition, recently passed state ballot measures in support of new infrastructure projects will yield billions
in new investments which should help to further stimulate the economy and job growth during this downturn.

And the state adds on average 400,000 to 600,000 people per year.  Hence the reason(s) why many state
experts believe that the current multiple economic combinations are short term (three to five years) but still
need to be addressed and through a variety of solutions.

Prosperity California will illustrate that the state with its long history as an incubator for innovation and
entrepreneurialism has a deep base of assets, found in its people, places, institutions and portfolio of
industries that together can rise to the challenge and lead California nationally and globally specifically if
there is a plan of action.

About the Author
Tim Johnson has 25 years of experience in working for or with local government in business, community
and economic development along with redevelopment and workforce training activities. Tim can be reached
at tjohnson@CaliforniaBusinessMinute.com