Why Business Needs to Get Its Act Together : The lack of a unified voice hurts California
The worsening business climate in California should fast become a unifying issue for the state’s fragmented business community. Up and down California, business is troubled. It’s a new experience because, well, the state’s spectacular growth over the last 50 years has come rather effortlessly. Business rode the California wave of prosperity with nary a thought that there would ever be more than a minor spill.
A wipeout? Never, or so most manufacturers, entrepreneurs, companies and small businesses thought until now. For the first time since World War II, California is experiencing a wrenching economic restructuring. The state is no longer recession-proof. California business leaders are more pessimistic about state than national economic conditions, a reversal from a year ago. We need to work harder--and smarter--to retain our economic vitality.
A STRONGER VOICE: No one knows the current score better than business--one in four firms is planning to relocate or expand outside of California, up from one in seven a year ago. Business needs a collective voice that is heard loudly and clearly in Sacramento. It’s time for business groups statewide to band together to lobby on issues of concern: Workers’ compensation, burdensome regulations, taxes and educational reform.
The lack of a unified voice reflects both the geography and diversity of California business. Southern California is home to the largest concentration of manufacturing in the United States. North California has Silicon Valley but is dominated by service industries. The state’s diversified business base varies in size, from old-line California firms to new immigrant-owned small businesses.
Most business groups with an established Sacramento presence are devoted to industry-specific or single- issue causes. But some are policy oriented, and these must take the lead in seeking change. The California Chamber of Commerce recently unveiled a new campaign, “Operation R.E.D. Alert,” to reform, enact or defeat business legislation, as needed. The California Business Roundtable and California Manufacturers Assn. focus on similar issues.
In seeking new alliances, the California Manufacturers Assn. is planning to sit down with labor to discuss workers’ compensation, something unheard of five years ago. Business executives have teamed up with public officials in Northern California in a the Bay Area Economic Forum, a public/private partnership to keep the region growing. A coalition of government agencies, business and labor groups in Los Angeles have banned together, using the slogan “L.A. Means Business,” to keep companies in Los Angeles County. More than 40 public/private partnerships, including Work Force L.A. and LEARN, are tackling education problems in Southern California.
NEW TRADITIONS: Business traditionally fights government regulation. Most companies want to help in cleaning up the air, unclogging freeways and improving water policy. But the typical legislative approach is command-and-control mechanisms-- costly dictates to business. Business wants the Legislature to use market- based solutions to produce desired results. That makes sense.
The challenge for business is to appeal to the public as well as the Legislature. That will work well if business is seen as public-spirited. It won’t work if it is seen as concerned only with the bottom line. A collective business voice would be a huge plus. The economic well-being of millions of people depends on a business-friendly California.
