CalBizBlog

Indiana and Iowa Recruiting in California

2012-05-24T21:49:49Z

This past week, two governors, Indiana’s Mitch Daniels and Iowa’s Terry Branstad
made statements on their intent to recruit businesses out of California. While
this should be of concern for the state, California’s position as one of the top
ten economies in the world will be anything but rocked by these pronouncements.

However, it should provide some concern for California’s leaders that these
announcements come at the same time that the state is dealing with its Achilles
heel – another year of a growing state budget deficit. Last week's news of an
ever increasing deficit and the corresponding solutions such as cutting services,
increasing taxes coupled with the state's regulatory environment gave the press
and news media plenty of ammunition for commentary. So this past week, when the
governors from Indiana and Iowa decided to embark on recruiting businesses from
the Golden State, it just added salt to the cuts by the media.

According to an article in The Atlantic, Indiana Governor Mitch Daniels has a
bold new strategy to make his state the new destination for outbound businesses
from the Golden State. The Hoosier state’s new push is to lure companies from
California’s heavy regulatory and high business tax environment in exchange for
regulation– light and the low tax environment of Indiana. According to Indiana’s
economic development office, 8 companies have relocated to Indiana from California
in three years. Those companies employ 1517 people. The questions that the media
forgot to ask is how much did it cost Indiana to get those jobs and what was the
cost per job?

Meanwhile, Indiana similar to Colorado is providing small tokens to California
businesses to peak their curiosity of moving. In the case of the Hoosier state,
apparently they are giving out coffee mugs that say “Move to Indiana.” Colorado
handed out Rocky Mountain Chocolates.

Iowa’s Governor Branstad also made an announcement of his intent to recruit
business from California. However he is just show boating and pounding his chest
for political effect. From personal experience, when Branstad served in his first
term in office, I found that all I had to do was read the governor’s press releases
about his efforts then usurp Iowa’s efforts. When I managed Sacramento’s
Office of Economic Development, it was done multiple times in the recruitment of
insurance companies. It was so humorous. This governor had no clue that he was
telegraphing his efforts and unfortunately didn’t possess the resources to compete.

But the press and news media gives him and apparently any governor who wants
press that they are coming to California to recruit business.

But it is fascinating that so few members of the press and news media this week
picked up on the fact that it is a California based business, SpaceX that is
providing the only way to get products to and from space for the United States.
It is not a company from Iowa, Indiana, Nevada, Colorado, Oregon or Texas and
their supposed more business friendly environments that is providing this service.
These states need to recognize that before they come to California they first
must have a business climate that has significant venture and resource capital,
an incredible well educated workforce and institutes of higher education that are
significant to the economic and job growth of the companies they are trying to
recruit from California. Additionally, their business climates must support
entrepreneurial efforts including an environment that respects business failure
and that is actually thought of as a badge of courage. Now ask, what does a
"Move to Indiana" coffee mug get a California business?

Tim Johnson
tjohnson@californiabusinessminute.com

Are the US & California Economies Headed for a Stall?

2012-05-18T06:36:00Z

Recently, Robert Reich, former US Labor Secretary has written an article,
"The Economy Has Stalled."

Reich believes that nationally, the economy and specifically employment
growth have fallen off over the last 90 days, if not hit a wall over the
last 60 days.

EMPLOYMENT ACTIVITY
December 2011               223,000 jobs added
January 2012                   275,000
Febraury 2012                  259,000
March 2012                     154,000
April 2012                        115,000

According to Reich-

Most observers pay attention to the official rate of unemployment, which
edged down to 8.1 percent in April from 8.2 percent in March. That may sound
like progress, but it’s not. The unemployment rate dropped because more people
dropped out of the labor force, too discouraged to look for work. The household
survey, from which the rate is calculated, counts as “unemployed” only people
who are actively looking for work. If you stop looking because the job scene
looks hopeless for you, you’re no longer counted.

In the winter months — December, January, and February – hiring had seemed to
pick up, averaging over 250,000 new jobs per month. Then the mini-surge stopped.
The simplest explanation is that the mild winter across much of the United States
gave an unusual boost to hiring then, leading to a correction by the spring.

Most of the job gains in April were in lower-wage industries – retail stores,
restaurants, and temporary-help. That means average wages continue to drop,
adjusted for inflation – continuing their long-term decline. Most of the new
jobs that have been added to the U.S. economy during this recovery have paid
less than the jobs that were lost during the downturn.

What does all this mean? Together with other recent data showing slower economic
growth during the first quarter of this year, it’s safe to say the economy has
stalled.

This is bad news for millions of Americans.

Meanwhile, Professor Stephen Brown director of the Center for Business and
Economic Research at UNLV identified in a article entitled, "Is US Employment
Growth Headed for a Stall," a different opinion.

Brown identifies that despite sluggish economic growth, indicators of labor-market
conditions provide no reason to expect emplymetn to stall.

Great, two different scenarios. Any advice for Governor Brown and the State Legislature
in balancing the budget?

Tax, cut spending, more taxes, less cuts?

Let us know what you think

Tim Johnson
TJohnson@californiabusinessminute.com

TOP TEN REASONS TO DO BUSINESS IN CALIFORNIA

2012-05-10T04:59:34Z

This week, two rankings on California’s business climate were released. These
rankings painted a poor performing climate. The first was the annual CEO Magazine
ranking of the Best to Worst States to Do Business. It once again ranked the
Golden State last amongst the states for doing business. This was the eighth
year that California brought up the rear in this ranking. Really? Apparently
something’s never change, including this survey. Strange that even during the
boom of the 2000’s the state still received the lowest ranking.

See www.CaliforniaBusinessMinute.com 05-10-12 Minute. Go to Main Menu (orange
colored bar) place cursor over 2ndQtr12, wait for drop down menu then click on
the Minute to view.

The CEO magazine ranking is one of the big five rankings that always beat up on
California. The others are Rich States/Poor States by the American Legislative
Exchange Council, the Tax Foundation, the Small Business Entrepreneurs Council
and the Suffolk University’s Beacon Hills Institute annual business ranking on
the states.

Meanwhile, another ranking was released that examines the small business climate
of the states by the Kauffman Foundation. While a new ranking , it too painted a dim
picture of California. See www.CaliforniaBusinessMinute.com Go to 05-09-12 Minute.

It is shocking that given a week earlier, the American Business Journals had
released their annual ranking of the Best Cities for Small Business. This ranking
saw a marked increase in improvement for California cities. San Jose was ranked
in the Top Ten and San Francisco and Bakersfield skyrocketed upward, the most
of any two cities for the year. See 05-01-12 Minute.

So in response to these two rankings, the California Business Minute has released
its Top Ten Reasons to Do Business in California.

TOP TEN REASONS TO DO BUSINESS IN CALIFORNIA

1.California has the largest population of any state in the nation 38 million
residents. It comprises some of the largest advertising markets in the nation
coupled with significant consumer spending.

2.California is the largest agricultural producing state in the nation with a
farm gate over $40 billion a year.

3.California is the Center of Innovation for High Tech, Software, Biotech,
Robotics, Aerospace and the Green/Clean technology.

4.California is one of the major natural resource based economies in the nation.
It is one of the Top 5 largest oil producing states in the nation, one of the largest
timber producing states, and mineral producing states such as gold.

5.California is the second largest state in international trade (imports/exports) with
access to global markets and a major gateway to the Pacific Rim. $159 billion in
exports and $351 billion in imports for 2011.

6.California has world renowned universities and research laboratories. California
    has 4 out of  the Top 20 universities in the world, CalTech, Stanford, UCLA and
    University of  California, Berkeley. It also has many national laboratories such as
    three NASA laboratories: Dryden, Jet Propulsion Laboratory and Ames. It is also
    home to the renowned Lawrence Livermore and Lawrence Berkeley Laboratories.

7.It is the largest tourism market in the nation at $104 billion spent by tourists in 2011.

8.It is the home to over 50 percent of the annual venture capital expenditures across
the nation.

9.It is home to more professional sports franchises than any other state in the
nation. It has five Major League Baseball teams, four National Basketball
Association teams, three National Football League teams and the National Hockey
League teams.

10.Work where others vacation.

We could add another ten, cause we didn't even get to the quality of the wine.
So phooey on the others. Let the Golden State shine!

Tim Johnson
tjohnson@CaliforniaBusinessMinute.com

TOP 5 THINGS TO IMPROVE THE ECONOMY

2012-05-03T20:24:21Z

The California Business Minute has published the following five items to
help improve both the US and California's economy.

1. Invest public dollars in science, technology , engiineering and math oriented activities.

2. Change workforce investment to help the educated find jobs

3. Increase capital to local non bank revolving loan fund programs

4. Reduce if not eliminate unfunded federal mandates on states, specifically California.

5. Increase our focus on domestic manufacturing capabilities

And one for good luck, a US and California Economic Plan.

Share your thoughts and opinions.

TJohnson@californiabusinessminute.com

Buy California

2012-04-12T05:41:17Z

A report released last week by California policy researchers David Kersten and
former California State Senate policy expert Elizabeth Kersten found that "AB
1543 would have a massive impact on the creation of new jobs in the United States,
particularly California."

AB 1543, authored by Assemblyman Luis Alejo (D-Salinas) represents a basic fair
idea: California State and local governments should not spend California taxpayers'
money overseas.

The California Labor Federation (representing 2.1 million union members in
manufacturing, retail, construction, healthcare, public sector, hospitality,
entertainment, and other industries) has stated, "AB 1543 will create a billion-
dollar market for goods manufactured in California, creating an incentive for
companies to create and retain jobs in the state. California is still a global
economic power and we can leverage that power to rebuild and strengthen our
economy."

The report by Kersten Communications entitled, "Examining the Policy Foundations
and Economic Benefits of AB 1543 (Alejo, 2012) The California Buy American Act",
contains the following conclusions:

•California State and local governments are spending an estimated $44.75 billion
annually to purchase goods with taxpayer funds that are manufactured abroad.

•The passage of AB 1543 would lead to the creation and annual support of between
938,000 and 2.4 million new manufacturing jobs.

•Over the years, off shoring practices of some of America's largest and most
powerful corporations, serving California governmental agencies, such as IBM,
Apple, Cisco, and Intel have cost the state large amounts of manufacturing jobs.

•These companies manufacture up to 85% of their goods abroad.

California state and local governments are exporting large amounts of taxpayer
dollars abroad to support the economies of Asia, particularly China and India,
and the Far East, among others.
AB 1543 would require that, starting in 2014, at least 70% of these taxpayer
funds be spent on manufactured goods made in the United States.

Jim Gonzalez, Chair of the Renewable Energy Accountability Project stated,
"During the last ten years, 600,000 Made in America manufacturing jobs were
shipped overseas from California. In the United States, over 6 million Made
in America manufacturing jobs were lost during the same period."

"We can either continue to wring our hands and give lip service to creating
manufacturing jobs, or we can pass AB 1543. AB 1543 will assure that renewable
energy manufacturing jobs remain in the USA," Gonzalez concluded.

The Renewable Energy Accountability Project (REAP) is a leading national grass
roots environmental organization committed to achieving clean energy independence
and ending global warming pollution.

REAP is a non-profit sponsor of AB 1543; and commissioned the Kersten Report.
A copy of the Kersten Report is available at this link: www.REAPinfo.org

Streamlining and Simplifying California

2012-04-06T05:36:00Z

Following through on his pledge to streamline state government, Governor Brown
sent a far-reaching reorganization plan to the Little Hoover Commission that cuts
the number of state agencies from 12 to 10, eliminates duplicative and unnecessary
entities and consolidates those with similar roles and functions.

The following identifies the changes as it pertains to economic development.

1.Dismantles the Business, Transportation and Housing Agency (BTH).

2.Moves the Small Business Loan Guarantee Program from BTH to the Governor’s
Office of Business and Economic Development (Go-BIZ).

3.Moves the California Travel and Tourism Commission to Go-Biz and places the
Director of Go-Biz as chair of the Commission.

4.Moves the California Film Commission and the Film California First Program to
Go-Biz.

5.Moves the Infrastructure and Economic Development Bank (I-Bank) to Go-Biz and
places the Director of Go-Biz as Chairperson. The Secretary of Transportation
replaces the Secretary of State and Consumer Services on the I-Bank board.

6.Promotes the Department of Transportation to an agency that includes:
•Department of the California Highway Patrol;
•The California Transportation Commission;
•The Department of Motor Vehicles;
•The Department of Transportation;
•The High-Speed Rail Authority; and
•The Board of Pilot Commissioners.

7.Creates the Business and Consumer Services Agency that includes:
•The Department of Business Oversight;
•The Department of Fair Employment and Housing;
•The Department of Housing and Community Development;
•The Department of Consumer Affairs;
•The Department of Alcohol and Beverage Control;
•The California Horse Racing Board; and
•The Alfred E. Alquist Seismic Safety Commission.

8.Demotes the Department of Financial Institutions and the Department of
Corporations to divisions within the Department of Business Oversight.

9.Demotes the Department of Real Estate and the Office of Real Estate Appraiser
to bureaus within the Department of Consumer Affairs.

10.Shifts the Department of Resources, Recycling and Recovery to the
California Environmental Protection Agency.

11.Demotes the California Technology Agency to the department.

12.Creates the Government Operations Agency which includes:
•Office of Administrative Law;
•The Public Employees’ Retirement System;
•The State Teachers’ Retirement System;
•The State Personnel Board;
•The California Victim Compensation and Government Claims Board;
•The Department of General Services;
•The Department of Technology;
•The Franchise Tax Board; and
•The Department of Human Resources.

13.Provides that the Secretary of the Government Operation Agency sits on the
Public Utilities Commission in place of the Secretary of State and Consumer
Services.

The California Business Minute wishes to thank:
Toni Symonds
Chief Consultant
California State Legislature
Assembly Committee on Jobs, Economic Development and the Economy

Ten Things Not Mentioned at the CALED Conference

2012-03-30T00:52:03Z

This year's annual statewide economic conference presented by the California
Association for Local Economic Development was very good. Several speakers
from US Treasurer Rosie Rios to Adam Bruns, editor of Site Selection magazine
provided riveting presentations. However, there were several items not mentioned
that could be further cause for concern related to California’s economy. The
California Business Minute provides a list of the Top Ten.

1.In search of money, no mention was made of the $1.2 billion in New Market Tax
   Credits made available by the US Treasury to Community Development Entities in
   the recently announced round during the last week in February. These dollars are
available for development projects across the state and play a significant role
   specifically given the loss of tax increment financing. Additionally, no
   information was provided on pending state legislation on creating a state new
market tax credit program.

2.No discussion was mentioned on the bonding opportunity for Community Development
Financial Institutions provided by the US Treasury to serve California through
the CDFI network of entities that could bring $1 billion for development
projects.

3.The federal government is looking at the disposition of lands in the state and
across the nation. What are the opportunities from this action specifically as
it pertains to enhancing the economy?

4.The Obama administration has presented its budget. How and what are the
impacts on California? How does it impact NASA, DoD and the DoE in the state?

5.There is a discussion of another round of military Base Realignment and Closure
in 2015. What will this mean to California?

6.International trade activity in the state has returned to pre-recession levels.
What does the future hold and why should and how can communities participate in
this growth oriented sector?

7.Saving Stockton or “What Happens in Stockton Stays in Stockton”. Is the
   municipal bankruptcy that happened in Vallejo, a municipal contagion? Is
   Stockton infected? Who is next, Montebello, Hercules, and/or Bell? What are
   the consequences from the Wells Fargo lawsuit on Stockton's failure to make bond
   payments and what does it mean to other cities?

8.The State Auditor released a report on the deficiencies on the state Workforce
Investment Board. Is it fair? Are workforce professionals’ loose cannons on
ship in the effort to support economic growth and nothing more than federal pork?

9.Are Transit Oriented Districts the next bastions of economic growth? If so, how
and what can be learned and incorporated into a community investment strategy?

10.At the recent Northern California Tourism Association conference, it was
     illustrated that tourism has grown considerably year-over year and the future
    looks bright. How can communities in northern California let alone across the
     state enhance their efforts through upcoming major events such as the US Professional
     Golfers Association, US Open, the 75th Anniversary of the Golden Gate Bridge
     and the America’s Cup?

Again, it was a very good conference. One nugget presented was that government fails to
move at the speed of business a key action to be implemented to improve California's
economy. As Lee Iacoca said, led, follow or get out of the way should be the Golden State's
mantra. What do you think?

Tim Johnson
tjohnson@californiabusinessminute.com

Small Business Survey: California

2012-03-23T00:34:00Z

In a press release the Small Business California’s 8th annual Small Business
Survey found that a majority of the state’s small business executives believe
the state is heading in the wrong direction. Only 20 percent of the 1,198
executives who participated in the survey feel that California is headed towards
prosperity.

“Despite growth in the U.S. economy as a whole, many small business patrons in
California are still not very optimistic about the future,” said Scott Hauge,
Small Business California’s president and co-founder. “It’s difficult to grow
the economy when the chief job creators among us feel restricted.”

Highlights of the survey include:
•44 percent of the business executives surveyed believe the state’s economy has
stayed stagnant this past year, while 56 percent of the respondents think the
state’s economy is going to either get worse or stay the same in the next three
years.
•14 percent of the respondents have hired new employees in the last 12 months,
while 31 percent of the respondents say they plan on hiring in the next six
months.
•65 percent of the executives surveyed feel that state lawmakers should make it
either a high or top priority to fix the California education system.
•88 percent of the survey respondents feel that California legislators should
make reforming the state’s health care system a high or top priority.

Though the survey shows that California small business executives are generally
unhappy with the state’s direction, it also shows that the executives still have
some hope. Roughly 41 percent of those surveyed believe the state’s small business
climate will get somewhat or much better in the next few years.

The complete results of this year’s survey can be found at Small Business
California’s website: http://www.smallbusinesscalifornia.org/.

CBM Review
In our review at the California Business Minute we saw this information.

•65% of the respondents feel California is headed the wrong direction, (more than
a majority but nearly 2/3rd’s of those surveyed).

•A combined 74% identified that their gross revenues had done one of the following:
stayed the same, decreased or decreased significantly.

•Similar to above, 44% responded that the economy has stayed the same in the last
three months. However, nearly 70% believe it has stayed the same, decreased or
decreased significantly.

•Nearly 70% responded that they do not plan to hire in the next six months,
contra to the spin put out on the press release that identifies only 30% will
hire.

•Of interest, a top priority identified by respondents was that 66 percent feel
the need to address the economy as one of the most important out of the 13
criteria identified.

It appears that not all is well with small business in the state.

Women: Body of Aniston or $10,000?

2012-03-15T19:21:27Z

Apparently the reset of our nation's priorities caused by the Great Recession
has forced at least women to reconsider desires, such as money.

Forty percent of women say they have just enough cash to cover their monthly
bills, according to a new survey paid for by Fitness magazine and Yahoo Finance.

Highlights from the findings:
• 40 percent of women have just enough money to pay their bills each month,
but no cushion foremergencies.
• 38 percent have enough money to pay the bills, but no cushion
• 29 percent have enough money for emergencies
• 13 percent say they are stretched thin and behind on bills
• 9 percent says they are up to their ears in debt

And for those getting money back from their income taxes this year, 42 percent of
all adults, and 45 percent of women, say they will use their tax return to pay
their bills, while 32 percent will save it. Only 11 percent would use the money
to splurge on a vacation or buy something nice for their kids.

Adults would rather spend their money on a weekly dinner out (63 percent) than a
weekly gym class they love (20 percent), the survey found. Older adults are more
likely to opt for the dinner while younger adults are more likely to choose a
weekly gym class.

About half (49 percent) of adults say they share control of finances with their
significant others, but 41 percent claim they have sole control.

The $10,000 Question
While Jennifer Aniston may be one of Hollywood’s sexiest celebs, 82 percent
of women polled said they would rather win $10,000 than have her body.

Yahoo! partnered with Ipsos MediaCT to conduct the Yahoo! Finance Financially Fit
survey in November 2011. A total of 2,000 Americans, ages 18 to 64 and
representative of the U.S. online population, were surveyed via an online
quantitative survey.

We will let you be the judge. Come on ladies, tell us what you think?

tjohnson@californiabusinessminute.com

STOP YOUR CRYING AND GET OVER IT

2012-03-08T21:40:37Z

Ohio has won the 2011 Site Selection Governor's Cup, which the 58-year-old
Atlanta-based magazine has awarded annually since 1978 to the U.S. state
with the most new and expanded corporate facilities as tracked by Conway
Data Inc.'s New Plant Database. The Buckeye State's 498-projects finish for
2011 is up substantially from its 376 projects logged in 2010, which put
Ohio behind Texas in the last contest. Texas finished second this time around
with 464 projects, followed by Pennsylvania (453), North Carolina (310) and
Virginia (273).

Now apparently, some California economic developers are crying about this
ranking. I say- get over it. In the 26th annual corporate Survey by Area
Development magazine, they identify that the future doesn’t look bright for
California nor the west coast as it pertains to development projects. Their
point is based upon onerous tax and regulatory burdens. These issues are
well documented as the reforms the state needs to address to be successful
in attracting and retaining business.

However, as our publication California Ranked Rated and Graded 2011 comes to
publication later this month, it will dispel many issues of the state’s
business climate- for the better. Also, Expansion Magazine has once again
asked the California Business Minute to write an article for their May/June
edition on Biotech and California. Take your advertising dollars and put
them with publications that will help enhance your cause. Lastly, stop
bellyaching and send us your positive news stories. Get involved with helping
pass the statewide reforms and stop worrying about each of these rankings!

TJohnson@CaliforniaBusinessMinute.com

UNION BANK SMALL BUSINESS SURVEY 2012

2012-03-01T19:00:47Z

Union Bank's National Small Business Economic Survey finds entrepreneurs
optimistic about the future of their companies, yet they are pessimistic
about economy among industries, those in construction or engineering are
most pessimistic about national economy.

Most businesses expect stable staffing, capital expenditures in 2012. While
most small business owners believe that the national and state economies are
headed in the wrong direction, the vast majority have confidence in the
direction of their own companies, according to the bank’s most recent Survey
released February 23, 2012.

The survey--which included 200 participants statewide and 500 outside of
California--found that while nearly half of those surveyed (48 percent) feel
the climate for their small business has worsened in the past two years, an
equal number anticipate an improved climate in the next two years. Mindful
of past economic challenges, yet hopeful about the future, the majority of
respondents plan to maintain the same staffing levels (84 percent) and capital
expenditures (57 percent) in 2012.

"This survey demonstrates the strength and resolve of those at the helm of
small business across the nation who, despite the lack of confidence in the
direction of the overall economy, are confident in their own ability to chart
a positive course for their business," said Union Bank Executive Vice President
Todd Hollander, head of Business Banking. "These entrepreneurs have become
experts at navigating through challenging economic times, and it makes sense
that they're moving forward with cautious optimism."

Cautious Outlook
Among the industries surveyed, significantly more respondents in the construction
or engineering fields (91 percent) believe the national economy is headed in the
wrong direction. This finding coincides with another part of the survey that
found that 13 percent of respondents in the construction or engineering fields,
more than those in all other industries surveyed, believe that the overall
climate for their business will greatly worsen in the next two years and none
believe it will greatly improve.

Those in the personal services sector were the most optimistic about the future,
with 55 percent expecting the overall climate for their business to improve
somewhat or greatly in the next two years.

While most respondents are planning to maintain the status quo following a year
of almost equally distributed sales--32 percent reported greater sales, 35 percent
indicated the same sales and 33 percent reported lower sales--more businesses
are budgeting for capital spending than hiring. Only nine percent of respondents
plan to boost staffing this year, while 20 percent plan to increase capital
expenditures.

Significantly fewer California respondents (7 percent) are planning to add staff
this year compared with last year (24 percent) and four percent fewer California
businesses are planning to add staff than out-of-state businesses (11 percent).
Conversely, more California respondents (24 percent) are planning increased
capital spending in 2012 than those outside California (18 percent). For
California businesses, planned increases in capital expenditures decreased three
percent from last year.

Among the industries surveyed, respondents from retail stores were most optimistic
about capital spending and staffing, with one in four expecting increased capital
spending and 11 percent anticipating increased staffing.

Overall, about one in five small businesses incurred layoffs in 2011 and seven
percent expect to trim their staff in 2012. One in four California respondents
reported employee cutbacks in 2011, five percent more than non-California
businesses (20 percent).

Businesses in the construction or engineering fields suffered significantly more
employee cutbacks in 2011 than those in all other industries surveyed, with 35
percent reporting layoffs. Further, 13 percent of businesses in the construction
or engineering industries expect decreased staffing this year, more than all
other industries surveyed. Those in the professional services sector (5 percent)
reported the least layoffs in 2011.

Loans and Government Assistance
Only one in 10 businesses applied for a loan or access to credit in 2011. The
majority (61 percent) of those who applied were approved and about a third of
those approved (32 percent) received a government-assisted loan. Significantly
less California businesses applied for a loan in 2011 (9 percent) than the year
before (23 percent).

While 18 percent of respondents indicated that their business had been positively
impacted by actions taken by the government since the recent economic downturn,
only seven percent of respondents reported benefiting from the Small Business
Jobs Act--legislation providing small banks with $30 billion to encourage lending
to small businesses, $12 billion in tax incentives, and expanded Small Business
Administration (SBA) loan programs. California businesses (4 percent) were less
likely to report benefiting from the Small Business Jobs Act than those outside
the state (9 percent).

Of those who were helped by the Small Business Jobs Act, the majority (53 percent)
said the biggest benefit was that it encouraged them to invest more in their business,
followed by the provision of tax relief (45 percent) and greater access to capital or credit
35 percent).

"Union Bank has a nearly 150-year legacy of lending, and we have credit available
today for qualified small business owners," said Union Bank Senior Vice President
Heather Endresen, head of the bank's SBA and Government Lending group. "We remain
committed to the growth of our specialized SBA lending unit and, for the first
time, Union Bank was recently ranked in the top 10 of SBA 504 lenders for the
markets we serve."

Changes to Ownership Structure
Fifteen percent of respondents plan to make significant changes to the ownership
structure of their business in the next five years. Of those planning changes,
36 percent plan to sell their business, 30 percent plan to take on a partner and
13 percent plan to transfer all or part of their business.

Significantly more respondents 56 years of age and older (56 percent of those
ages 56 to 65 and half of those over 65) plan to sell their businesses in the
next five years.

"These findings coincide with what we're seeing in the marketplace as 'baby
boomers' begin to explore the idea of selling their business," Hollander said.
"At Union Bank, our business bankers can help entrepreneurs seeking changes in
ownership structure develop creative strategies to accomplish their specific
goals."

Biggest Business Disadvantages
Nationally, 16 percent of respondents identified the statewide economy as the
top disadvantage of operating a business in their state. The second largest
disadvantage, listed by 15 percent of respondents, was the national economy.
While 14 percent reported no disadvantage to doing business in their state, 10
percent of respondents identified state and/or local business taxes as the next
largest disadvantage.

The top disadvantages differed between California businesses and those outside
California. Twenty percent of California respondents listed the state's economy
as the top disadvantage of running a business in their state, while 17 percent
of non-California respondents identified the national economy as the top
disadvantage. Another 17 percent of non-California respondents reported no
disadvantage to operating a business in their state.

California respondents (13 percent) identified state and/or local business taxes
as the second largest disadvantage, while non-California respondents (15 percent)
identified their statewide economy as the second largest disadvantage. Eleven
percent of California respondents identified both housing costs and the national
economy as the third largest disadvantage. Respondents outside of California
(9 percent) identified state and/or local business taxes as the third biggest
disadvantage.

Other Survey Highlights: National, California and Non-California
-- Nationally, while 26 percent reported no advantage to operating a business
in their state, the top three advantages identified were: cost of living (13
percent), opportunities for growth (11 percent), and favorable climate (10
percent). -- In California, while one in four respondents reported no advantage
to operating a business in their state, the top three advantages identified were:
favorable climate (20 percent), proximity to major companies/entities that
influence their business (13 percent), and opportunities for growth (10 percent).

-- Outside of California, while 27 percent of respondents reported no advantage
to operating a business in their state, the top three advantages identified were:
cost of living (17 percent), opportunities for growth (11 percent), and family
ties (9 percent).
-- Nationally, 45 percent of respondents reported working somewhat or a lot more
hours per week than the same period last year. Of those working more hours, 45
percent attributed the added time to increased business and 24 percent attributed
it to decreased staff. -- In California, 46 percent of those surveyed reported
working somewhat or a lot more hours per week than the same period last year.
Of those working more hours, 47 percent attributed the added time to increased
business and 21 percent attributed it to decreased staff.
-- Outside of California, 45 percent of respondents reported working somewhat
or a lot more hours per week than the same period last year. Of those working
more hours, 44 percent attributed the added time to increased business and 25
percent attributed it to decreased staff.
-- Nationally, 41 percent of respondents said over the past two years, it was
somewhat or much harder to access credit to grow their business. Forty-eight
percent said it was about the same. -- In California, 47 percent of respondents
stated it was somewhat or much harder to access credit. Forty-three percent
stated it was about the same.
-- Outside of California, 39 percent of respondents stated it was somewhat or
much harder to access credit. Half of the respondents said it was about the same.

Community Reinvestment Forgiven?

2012-02-23T20:18:00Z

Despite hundreds of testimonies and letters from California community groups
and a widely-attended public hearing in San Francisco last October, the Federal
Reserve has apparently approved the merger of Capital One and ING Direct amongst
the opposition to California’s community needs according to the California
Reinvestment Coalition.

With the merger approved, Capital One becomes the fifth largest bank in the
country and according to the Coalition presents no immediate obligations to
reinvest into the communities like California from which it profits. The
Coalition believes that this is a critical issue for Californians, who generate
more business for Capital One than any other state. Capital One has no branches
in California, and, apparently based upon the Fed's interpretation of the
Community Reinvestment Act (CRA), will not be required to reinvest their profits
back into California.

In a press release by the California Reinvestment Coalition, it identified the
following:

“The approval of this merger is a critical policy issue that must be addressed
immediately. CRA is an important regulation that provides critical lending needs
to low income communities and communities of color by increasing access to small
business loans, affordable housing development, and basic bank services. The
Federal Reserve has interpreted the Community Reinvestment Act so that banks
only need to reinvest profits in communities where the bank has branches. This
flies directly in the face of the original intent of CRA--to promote reinvestment
where banking occurs. The Federal Reserve and Capital One are hiding behind the
fact that the CRA branch requirement is a vestige from when the law was written
in 1977- when banks did all of their business through branches. The banking
industry has changed dramatically since 1977, as more customers conduct their
banking online and more banks are deciding to shut down branches (especially
in low income communities). By refusing to interpret CRA more broadly, the Fed
is providing banks with an excuse to ignore the critical needs of California's
communities.”

"The Federal Reserve missed an important opportunity to impose meaningful
requirements on this merger that would benefit California and other communities
across the country," said Alan Fisher, Executive Director of the California
Reinvestment Coalition. "The Federal Reserve should immediately take steps to
modernize CRA so that this type of weak regulation does not happen again in the
future." Hearings were held on the topic of CRA modernization in August 2010,
and the Federal Reserve has yet to make any progress on instituting changes to
the regulation.

In its notice of the approval, the Federal Reserve claims that ING Direct's two
California-based "cafes" (in San Francisco and Los Angeles), will begin to accept
deposits and therefore will be considered branches that are subject to CRA
evaluation. The Coalition claims that the Federal Reserve should ensure that
the bank does not consider its predatory credit card, small business credit
card, and auto lending practices as "community benefits."

Furthermore, in the press release, the California Reinvestment Coalition
identifies that Capital One is built on a predominately high-rate, fee-heavy
credit card business that exploits consumers. The bank collects finance charges
and other customer fees equal to 42% of profits. It even admits that if borrowers
begin "avoiding late fees, over the limit fees, finance charges and other fees
[it] could have an adverse impact on our revenues." Capital One's products strip
wealth from California small businesses and households that need affordable
housing and banking services according to the Coalition.

The California Reinvestment Coalition, along with its members and allies in the
state and across the nation, raised a number of these concerns about this
acquisition last fall. The Federal Reserve held three hearings on the merger
in October 2011, in San Francisco, Chicago, and Washington DC. After months of
closed sessions and comment periods, the Federal Reserve announced their final
decision.

The California Reinvestment Coalition is a membership organization of 300
nonprofits that advocates for fair and equal access to banking and other
financial services for California's low income communities and communities
of color. www.calreinvest.org.

What do you think?

tjohnson@californiabusinessminute.com

CALIFORNIA AND THE FORECLOSURE SETTLEMENT

2012-02-17T07:10:11Z

While the recent $25 billion agreement between many states including California
and the five banks that engaged in flawed real estate foreclosure practices,
sounds great, it unfortunately may never go to Californians.

Apparently, Fannie Mae and Freddie Mac who guarantee the mortgages are not
participants to the settlements. The two organizations hold more than 3 million
of the nation’s 11 million underwater mortgages. Since they are banking the loans,
they are the ones who will take a loss of the mortgage if

It isn’t paid back in full. Thus, lowering the amount of money owned on a loan
would result in at least short-term loss for Fannie and Freddie as well as to any
other investors in mortgages that are reduced.

The reluctance by these tow and others to take on principal reduction is partly
why the Obama Administration’s mortgage modification programs have been
ineffective. Apparently, some of the monies will go to states while some will go
to an estimated 750,000 homeowners who were foreclosed upon. However, if you
lost your home, you may receive up to $2,000. Some consolation given that it
will be taxable.

Citi California Pulse 4thQtr2011

2012-02-10T01:45:04Z

Nearly half of Californians believe 2012 will be better than 2011, according
to the latest Citi California Pulse(R), a sign that the state's residents are
increasingly optimistic about the coming year. Thirty-three percent expect
this year to be about the same as last year, and only 17 percent say it will
be worse.

Additionally, Citibank's latest quarterly survey found that the outlook is
improving among residents regarding the California economy, jobs and their
personal finances. Looking ahead 12 months, 66 percent of Californians say
their personal financial situation will be better, 52 percent say the
California economy will improve, and 51 percent say job opportunities will
brighten. When asked how they feel about the state, 85 percent say they are
proud of California and 63 percent say it is an excellent or good place to
live.

"We are pleased to see this optimism going into the new year and that many
Californians are looking forward to improving conditions in 2012," said
Rebecca Macieira-Kaufmann, President of Citibank California. "Our survey
continues to show the incredible resilience and pride of Californians,
which is a great sign for the state's future."

When asked about California's leadership position in certain industries,
66 percent say the state remains a leader in the Entertainment Industry,
47 percent in Technology, 43 percent in the Green Industry, 43 percent in
Fashion/trend-setting, and 20 percent in Education.

Citi California Pulse(R) Optimism Index

The Citi California Pulse Index of Optimism rose to -4 in the fourth quarter
of 2011, up from -7 in the third quarter. At 0, the index would be on the
exact middle point of all possible scores, which range from +100 to -100.
Among the survey's key findings:
-- 64 percent say they are worried about another recession;
-- 59 percent believe their debt level will be lower in 12 months;
-- 58 percent say more jobs and a rising employment rate would be the best
   signs that the California economy is improving; only 1 percent say construction
   on new housing would be a sign of improvement;
-- 57 percent say the U.S. economy concerns them the most among economies,
   while 28 percent say the California economy is their biggest concern and only
   11 percent say Europe.
Spending and Saving Behavior
The survey showed continuing changes in spending and saving among Californians,
with 64 percent saying the behavior represents a permanent change. According
to the survey:
-- 68 percent have cut down on credit card use;
-- 60 percent have reduced the amount of money they owe;
-- 57 percent have postponed the purchase of a major item, such as a car;
-- 55 percent of those aged 18 to 34 have changed living arrangements to save
   money;
-- 50 percent have taken money out of investments to help pay expenses.
When asked how they feel about retirement, 55 percent of Californians say they
are somewhat or very uncomfortable with their current level of savings; 46
percent of those aged 35-54 have thought about postponing retirement.
Regional Differences
The latest survey again found significant differences among residents of Southern
California and Northern California, particularly in the San Francisco Bay Area,
where residents are much more optimistic than the rest of the state. The
California Pulse Index of Optimism came in at +11 in San Francisco, while it was
--4 in San Diego and -6 in Los Angeles; the total for all other counties in the
state was -5.
-- 73 percent in the Bay Area believe their financial situation will be better
   in 12 months, compared to 62 percent in San Diego and 61 percent in Los Angeles.
-- 62 percent of Bay Area residents expect that job opportunities will improve
   in the next 12 months, compared to 50 percent in Los Angeles and 47 percent in
   San Diego.
-- In the Bay Area, 59 percent of respondents say they expect 2012 to be better
   than 2011, compared to 52 percent in Los Angeles and 41 percent in San Diego.
-- 30 percent in the Bay Area say things in California are headed in the right
   direction, compared to 23 percent in Los Angeles and 21 percent in San Diego.
-- Looking at current conditions, 19 percent in the Bay Area call the job
   environment excellent or good, while just 8 percent in Los Angeles and San Diego
   feel the same.

Wells Fargo/Gallup Small Business Index 1stQtr2012

2012-02-10T01:41:53Z

America's small business owners are the most optimistic since July 2008, according
to the latest findings from the Wells Fargo/Gallup Small Business survey.

The survey’s index now stands at positive 15 for January, compared to minus 3 in
October 2011 and following two previous Index readings of zero (neither optimistic
nor pessimistic). Its “future expectations” component (forward looking 12 months)
rose to positive 21 in January, an increase of 13 points from the survey's last
reading, which occurred in October 2011.

Driving the increase was a more bullish sentiment across several categories
tracked by the survey:
• Revenues -- 49 percent expect revenues to increase a lot or a little, up
from 37 percent in Q4 2011
• Overall financial situation -- 63 percent expect their company's financial
situation to be very or somewhat good over the next 12 months, up from 55
percent in Q4 2011
• Hiring -- 22 percent expect the number of jobs at their company to increase
a lot or a little, up from 15 percent in Q4 2011; 8 percent expect the number
of jobs at their company to decrease a lot or a little, down from 13 percent
in Q4 2011
• Cash flow -- 53 percent expect their cash flow to be very or somewhat good,
up from 48 percent in Q4 2011
• Credit access -- 27 percent expect credit to be very or somewhat easy to
obtain, up from 22 percent in Q4 2011; 38 percent expect credit to be very
or somewhat difficult to obtain, down from 43 percent in Q4 2011

In addition to its future expectations component, the index includes a present
situation component (looking back 12 months), which improved to minus 6 in
January, up from minus 11 in Q4, 2011 and the best reading in this component
in three years. Driving this improvement was an increase in business owners
who experienced increased revenues (33 percent), ease of accessing credit
(25 percent) and increased capital spending (24 percent) over the past 12 months.

"January's increase in optimism signals that small business owners are seeing a
brighter future," says Doug Case, Wells Fargo's small business segment manager.
"While this economy still presents challenges for many business owners, we are
encouraged by expectations for improved revenues, financial situation and cash
flow, which have the potential to drive job growth."

More small business owners expect to add new employees (22 percent) than expect
to let them go (8 percent) over the next 12 months, an improvement over the
previous survey readings. This quarter's 14 percentage point hiring/firing
difference (those who expect to hire versus fire employees) is the largest since
January 2008 at the start of the financial crisis. In October, the hiring/firing
difference was only 2 percentage points, with 15 percent expecting to add new
employees and 13 percent expecting to let them go.

More than half of the survey's small business owners (52 percent) said they hired
employees in the past 12 months, which is little changed from the 51 percent
reported in November 2010. However, of this group, more business owners say they
have hired as many employees as needed (65 percent, compared to 48 percent in Nov.
2010) versus those who have hired fewer than needed (29 percent, compared to 42
percent in Nov. 2010), an indication of more stable operating environments.

While business owners indicate plans to hire in the next 12 months, they
demonstrate some concern around hiring today. Only 15 percent said they are
currently looking for new employees. Those who are not looking to hire employees
today (85 percent) were asked why not. Half of all business owners surveyed said
that as a general rule, they find it very difficult (21 percent) or somewhat
difficult (32 percent) to find the right qualified employees for their business.
And, in the event they can't afford to hire new employees, owners say they most
often turn to their spouse (21 percent), a friend (16 percent), their children
(15 percent), or a relative other than child or spouse (11 percent) for unpaid
help.

CALIFORNIA: A STRATEGY FOR PROSPERITY

2012-01-20T01:40:00Z

Three years ago, I was asked by Wayne Schell, president and CEO of the California Association for Local
Economic Development, CALED to examine the multiple business and economic development strategies
that had been formulated in the state in the hopes of formulating a strategy of strategies for California

The following is the examination entitled, Prosperity California: Formulating a Stratgy of Strategies for
Economic Prosperity. The outcome unfortunately did not go far. But it provides a great look back at
what has happen early on during the Great Recession and one of the key problems with economic
development in California. It is too big to manage with the recent mindset.

We will let you be the judge. Enjoy!

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

Prosperity California: Bibliography

2012-01-18T07:43:00Z

The following information is a bibliography of significant economic development
and workforce related reports that have been completed during 2005-2008 pertinent
to California from either a statewide or regional perspective for the formulation a
of a strategy entitled Prosperity California. This bibliography was completed by
Tim Johnson for the California Association for Local Economic Development, CALED.

National Governors Association, 2007 State “New Economy’ Index: Benchmarking
Transformation in the states –California. The document provides excellent
insight to California’s strengths and weaknesses related to jobs, globalization
and the digital economy. California ranks extremely high against other states
in this report.

California’s EDGE: Keeping California Competitive, Creating Opportunity
This is a publication comprised of a coalition of non- partisan groups with
diverse and even divergent outlooks but united in the belief that:

• The states’ future economic growth rests in large measure on the skill
   base of its workers
• The state and its industrial leadership are now at serious risk of loosing
   the competitive advantage of a highly trained labor force
• The Governor and Legislature must lead a strategic effort to forge the state’s
   education and raining infrastructure, otherwise suffer-creating an uncertain
   future

See www.Californiaedgecampaign.org for 5 major goals. Unknown date of
Publication

New Voice of Business
This is a non-partisan organization to awaken, inspire, and mobilize the power
and creativity of business and business people. It does possess an economic
agenda but it is not focused specifically on California. The organization is
a supporter AB 2944. See www.newvoiceofbusiness.org

2007 Measuring Prosperity Index, Sacramento Region
A publication by the Sacramento Regional Research Institute. Good for background
information, but not an initiative or strategy.

Building Economically Competitive Communities
A document by the California Academy for Economic Development. The document is
focused on an organizational strategy for or in support of economic development,
specifically the California Association for Local Economic Development. No date
of publication.

Merced County, 1 Voice, Top Priority Project Summary,
Unknown publication date. This is published by Merced Council of Governments.
It is regional in nature but has concentrated on two statewide concerns:

•SB 975 related to Prevailing Wage configuration to other areas beyond,
LA Basin and Bay Area
•Change all tax measures to be passed by simple majority

League of California Cities, 2008: Adoption of Four (4) Goals
• Protect funding for vital Community Services
• Green and Sustainable Cities
• Expand Infrastructure Investments
• Enact Honest and Responsible Eminent Domain Reform

BAY BIO IMPACT 2008: Translating Science into Better Health,
A 12 Point Plan, Jan 2008

•Create a health information technology and life science investment capital
gains tax amnesty
•Invest $150 million over 10 years in UC-oriented life sciences incubator
•Convert California’s R&D tax credit into a tax rebate
•Create a 20 year carry forward provision on the treatment of corporate net
operating losses
•Create corporate tax incentive for major investments in California
•Increase state investments in Training Centers of Excellence
•Incentivize local communities to zone biotech regions in their master planning
•Expand allowable uses for State Infrastructure and ED Bank
•Establish a harmonization conference between CALEPA and USEPA
•Establish a science fellows program to serve the state government
•Establish a major economic incentive for bio-processing and bio-manufacturing
investments
•Establish a new California Science and Technology Trust

CALCHAMBER 2008 Business Issues
This is a publication that illustrates key business issues to be examined that
focus on items such as agriculture, climate change, education, energy,
environmental regulations, health care reform, housing, immigration,
international trade, labor and employment, legal reform, privacy, tourism,
transportation, water and worker’s compensation.

California Economic Development Partnership
Overview of Business Plan Revised 08/30/05 Draft. It is the mission of the
Partnership to bring together state resources in collaboration with regional
and local economic development organizations. The document was a draft plan.

Cluster Based Strategies for Growing State Economies
National Governor’s Association, 2008
The following identifies initiatives to grow and sustain clusters
• Establish a Solid Foundation
• Build Relationships
• Deepen Skills and Talents
• Align Innovation investments
• Accelerate Entrepreneurship
• Open Global Priorities

State Strategies to Promote Angel Investment for Economic Growth
National Governor’s Association, 02/14/08

•Promote seminars on private equity investment for current and potential
investors
•Assist entrepreneurs by connecting them with existing entrepreneurship
education and services
•Facilitate the formation of statewide angel group networks to organization
and empower local leadership and build investor knowledge
•Ensure that angel investors are well-represented on state economic
development advisory boards, along with entrepreneurs, universities and
other industry representatives
•Identify and collect metrics to monitor the impact

The California Economic Leadership Network
California Center for Regional Leadership, 09/17/07
Publication primarily focused on actions by the state, comparing the state to
other state’s and entities.

2007 Rural Economic and Health Vitality Policy Agenda
California Center for Regional Leadership, on behalf of the Governor
No discussion of a strategy or goals presented.

California Commission for Economic Development: Promoting Sustainable Growth
and Workforce Development for California’s Future 2007
A series of recommendations were presented. These include recommendations for
Sustainable Growth and Workforce Development:

Sustainable Growth

•Analyze and contrast business incentives offered by California and other states
to lure innovative companies. Assess whether and to what extent California
enterprises are at a competitive disadvantage
•Identify and work to eliminate unreasonable government barriers to developing
a carbon constrained economy
•Identify all natural advantage California possess to attract capital and to
develop new energy technologies. Promote policies to preserve and enhance such
advantages
•Examine the state’s corporate tax policies and its impact on California companies
large and small
•Encourage the development of a strategic plan to grow and sustain the
biotechnology sector in the state.

Workforce Development

•Explore the relationship between workforce availability and business location
strategies with the state
•Identify successful strategies to promote productive partnerships between
businesses and the educational sectors to expand career and technical education
programs
•Explore whether options are available to provide additional state support to
expand successful workforce development models in key industries

Innovation, Investment, Collaboration: A Statewide Action Agenda for Economic
Vitality, California Center for Regional Leadership, February 2005

This report identified a variety of background items including consultant
recommended building blocks for economic development. However the significant
element of this report is Governor Schwarzenegger’s goals as they pertain to
economic vitality.

•Develop a fair and competitive tax structure that encourages growth and job
creation
•Solve the energy cost crisis
•End litigation lottery – reform BPC Section 17200 (tort reform)
•Fix runaway workers compensation costs
•Cut bureaucratic red tape and regulations

Shared Prosperity and the California Economy: Implications for California’s
Workforce Investment Systems
Center for Continuing Study of the California Economy
sponsored by the James Irvine Foundation

The report was formulated with the intent of helping the State’s Workforce Investment
Board along with the 50 local workforce investment organizations
across the state. The premise of the report was to express what the state
workforce investment system is and what are its components such as CalWorks,
Welfare to Work and programs funded un the New Workforce Investment Act.

The report illustrate that the state’s Employment Training Panel, ETP spent
$100 million in 2000. It is the only major public sector workforce program
that focuses on the training of workers who already have jobs and are not poor.
ETP is the only public sector program that focuses on developing career
ladders.

The report presented the significance of private sector workforce training
programs nationally. The report identified that businesses spent $60 billion
in 2000 across the nation. If California industry matched the national average,
businesses in the state would have spent $6 billion.

The report identified Four Big Picture Ideas to be considered in the new
workforce investment system.

The Four Big Picture Ideas:

• From Job Growth to Productivity Growth
• From employment to Move Up
• From Single Agency Programs to Partnerships
• From Conflict to Common Purpose , One Economy One Workforce

California Cities Economic Development Policies, Perspectives Assessments and
Implications for State Policy,
Public Policy Institute of California, 2008

This report illustrates that local governments are playing a very substantial
role in economic development. The report defines economic development policy
as a set of government actions that are self consciously not unintentionally,
directed at attracting, retaining or growing new businesses of any type.

It was identified 478 cities in the state are virtually all involved in economic
development. A corresponding survey illustrated the following:

1.Economic Development strategies have expanded over time
2.Local officials have a negative view of state government’s performance
regarding local economic development
3.There is unique value in a survey based approach to data collection
4.Perception of competition between communities is the driver of local
economic development

Significant findings from the report illustrated the following from the survey:
Barriers, constraints and problems that confront local economic development
programs:

•Shortage of Land for Industrial Development
•Lack of Affordable Housing
•Shortage of Land for Retail and Commercial Development
•Lack of Workforce Skills/Training
•Inadequate Transportation Infrastructure
•High Energy Costs
•Overt NYMBISM

What is important to local Economic Development programs:

•Working with Community Groups
•Assuring Consistency in Development Rules
•Contacting Businesses
•Emphasize improvement of Local Amenities
•Streamlining Review of all Applications for Permits
•Property/Site Referrals

The report does not provide any strategies nor defines any goals. Information
only

Survey of Biomedical Industry

2012-01-13T06:32:44Z

Survey of Biomedical Industry: CEOs Finds Lack of Investment and Regulatory
Environment Threaten Future Growth and Innovation

Access to capital, a burdensome and uncertain regulatory environment and lack of
innovation and productivity in research and development are the biggest threats
to the biomedical industry's growth over the next five years, according to
biomedical company CEOs surveyed by CHI-California Healthcare Institute, BayBio
and PwC US. The CEO Survey found:

Nearly three quarters (74 percent) of biomedical industry CEOs surveyed said their
companies have had to delay a research or development project in the past year.
Lack of funding was the top reason for project delays cited by private company
CEOs, and accounted for more than one-third (40 percent) of delays by all public
and private companies in the survey.

Eight in 10 CEOs surveyed agreed or strongly agreed that the current FDA
regulatory approval process has slowed the growth of their organization.

Findings of the CEO Survey reflect issues being discussed throughout the
biomedical industry by executives gathering in California this week, and
provide an early glimpse into the 2012 California Biomedical Industry Report,
due in February. The report, published annually by CHI, BayBio and PwC, provides
a snapshot of the biomedical industry in California, the largest biomedical
cluster in the world and the source of the greatest number of products in
clinical development.

"As the center of biomedical innovation in the U.S., California's biomedical
industry is a national treasure," said Gail Maderis, president and CEO of
BayBio. "But the pace of R&D productivity and its global leadership position
hang on the availability of capital to fund future innovation and a regulatory
framework that is based on consistency and innovative technologies."

Biomedical Access to Capital

The CEO Survey found that biomedical companies in California have been
resourceful over the past year in seeking diverse funding sources, divided
almost evenly among government grants, angel investors, venture capital and
licensing agreements and partnerships.

"Biomedical companies have long relied on government grants and venture capital
to finance innovation, but funding sources are shifting and companies will need
to adapt to a new reality," said Tracy Lefteroff, national life sciences partner,
PwC US. "While venture capitalists and angel investors will continue to be an
important source of funding, it has become increasingly difficult for biomedical
companies to gain access to them. Alternative sources of funding are emerging,
which highlight shifting opportunities and dynamics in life sciences innovation."

The CEO Survey found:

Forty-four percent of biomedical CEOs surveyed said they will look to licensing
agreements and corporate partnerships as a source of finance in the next 12
months, double the number of CEOs who last year said their companies are using
this avenue for finance.

Corporate venture funding, the investment of corporate funds into external
endeavors, is expected to become a much more crucial source of funding to the
industry, with 30 percent of CEOs surveyed saying they will tap corporate venture
capital as a finance source in the next 12 months, versus only 10 percent who did
so in the past 12 months.

Though still only a small contributor to the finance equation, disease
foundations/non-governmental organizations are growing as a funding source for
11 percent of CEOs who plan to use these funds in the next 12 months, versus
only 4 percent who did last year.

Access to capital is seen by CEOs as the most influential state policy issue to
keep biomedical research, innovation and investment in California. Nearly three-
quarters (72 percent) of CEOs said that access to capital is extremely important,
followed by (in order of importance) tax incentives for innovation (60 percent),
corporate taxation (51 percent), workforce preparedness (47 percent) and
duplicative regulation among various state and federal agencies (37 percent).

Regulatory Environment will Determine R&D Productivity

According to CEOs surveyed, FDA and regulation are the key issues affecting
research and development. Eighty-one percent of CEOs also said that coverage
and reimbursement issues are extremely important to the industry's ability to
advance biomedical research, innovation and investment in California.

In addition, 80 percent of CEOs surveyed do not believe that U.S. FDA has the
best regulatory approval process in the world, and three-quarters believe that
within five years, another country could conceivably recreate the ecosystem that
has made the U.S. the leading biomedical region in the world.

"Sound public policy and managerial and operational improvements at FDA, along
with responsible congressional oversight, will encourage biomedical innovation
and, ultimately, job growth here in California," said David L. Gollaher, Ph.D.,
president and CEO of the California Healthcare Institute. "Working collaboratively
with other stakeholders, Congress, FDA and the biomedical industry can maintain
the high standards of safety and effectiveness that address patients' need, while
improving our ability to attract investment and grow in 2012 and beyond."

BayBio is Northern California's life science association, supporting the regional
bioscience community through advocacy, enterprise support, and the enhancement of
research collaboration. Its members include organizations engaged in, or
supportive of, research, development and commercialization of life science
technologies. Online at www.baybio.org

San Jose /Silicon Valley Chamber Celebrates 125!

2011-12-23T06:25:00Z

The San Jose Silicon Valley Chamber's 125th anniversary, "The chamber was
founded in 1886 and is now among the oldest and largest chambers in California,"
said Matthew Manhood, President & CEO.

Matt identified the following as one of the key historic accomplishments of the
Chamber:

Eighty years ago, members of the region’s business community—led by the chamber
of commerce —helped create Moffett Field for the Santa Clara Valley. The chamber
raised $476,000 to buy a thousand acres of land in 1931 for the U.S. Navy to
establish a dirigible base. That former naval air station, as we all know, became
a key airbase during World War II and the Cold War and is now owned and operated
by the NASA Ames Research Center which is one of th significant assets of the
Silicon Valley.

CONGRATS!

California Cities: Most Expensive for Business?

2011-12-01T20:56:20Z

Recenlty the Claremont schools in concert with the Rose Institute and Kosmont Consulting
released their annul "Most Expensive Cities to Do Business" rankings.

Five California cities figured into the Top 20 Most Expensive locations. They include
Beverly Hills, Culver City, Los Angeles, San Francisco and Santa Monica.

Of interest, Birmingham, Alabama was also listed. Strange given the fact that
the county that Birmingham is in just filed for bankruptcy protection. One would think
they would have sufficient funds. Broke and expensive! It is amazing how many
times this community comes to the forefront on business cliamte rankings.

Additionally, the rankings identified that the least expensive places to do business are
in Texas. However, the methodology fails to express that if you locate to Texas
you will need to negotiate your tax rate over a horizon or you will find your company
in a dilemma of being taxed significantly by local jurisdictions. Something that the report
fails to discuss.

See the article at the following link: www.CaliforniaBusinessMinute go to main menu
(orange colored bar) place cursor over Minutes4thQtr11, wait for drop down menu then go
to 12-01-11 "Most Expensive," then click on to view.

We will let you be the judge.

Tjohnson@californiabusinessminute.com