California has lost ground in the race for economic development, stumbling over such problems as pollution, competition from other states and foreign countries and a misperception that the state is anti-business, the head of a public policy research group said Tuesday.
"California has been the quintessential land of opportunity . . . the land of the future," Robert C. Holland, president of the New York-based Committee for Economic Development, said in a speech here before Town Hall of California. "The rub with such a string of successes like California has put together is that each such success brings new challenges."
States are best able to promote economic development by "getting the basic infrastructure right," Holland said. That includes improving education, public safety and the physical infrastructure of transportation, water supply, sewage and waste management, communications and power, he said.
California historically has excelled in developing its educational, water supply and transportation systems, Holland said. But a study of regional economic development that the group is conducting has found that, even in those areas, "California is going to have to make some changes to meet the challenges of the rest of the 1980s and 1990s," he said.
In addition, California faces two "substantial handicaps" to economic development in the perceptions developed during the last several years that California is anti-business and is resistant to further change, Holland said.
"The perception is you've changed enough; it's nice the way it is. I think they're both at least partly, if not largely, misperceptions--but they're there."
Holland said California must mount an educational campaign to change this image. "You're the only ones who can convince them (investors) that it has changed back" to a pro-entrepreneurial climate, he said. California also must find more efficient ways to transfer innovation from academic research centers to commercial use, Holland said.
"Your sheer success makes you need innovation more than other states in order to keep your standard of living," he said. "If businesses in this state are not in the forefront of such efforts to facilitate technology transfer, then in this free society other business firms from other states and other countries will come in increasing numbers to make such linkages for themselves."
He added: "With a few exceptions, the key things that need to be changed to remove the clouds over your future are within your power to alter. By all the yardsticks of the rest of the world, California has what it takes to continue to be one of the finest places to live and work and prosper. You're lucky."