Public Policy Expert Sees County in Economic Flux : Change: USC dean says end of Cold War and national trends require restructuring, and soon.

Orange County is at a crossroads and must act soon to restructure its economy if it wants to avoid “15 years of failure” that Los Angeles has experienced, Jane G. Pisano, dean of the USC School of Public Administration, told a crowd of 350 of the school’s Orange County alumni Thursday evening.

With the end of the Cold War, the decline in the manufacturing base and the increase in environmental regulations, the county is undergoing a period of economic restructuring, Pisano said.

Specifically, in the period between 1980 and 1990 manufacturing has been replaced by the service sector at the top of the employment list, a trend that is expected to continue.

That shift brings with it sociological as well as economic challenges, Pisano said.

In stark contrast to manufacturing, service industries lack “middle-skill, middle-wage” jobs. Over time, that means less upward mobility for those at the bottom, she said, and fewer good jobs for the children of Orange County residents.

Before assuming her post at USC last year, Pisano headed 2000 Partnership, a civic organization in Los Angeles established to improve the quality of life in Southern California.

Viewing the impact of the recession on California, Southern California and Orange County from Gov. Pete Wilson’s perspective, Pisano took stock of the economic situation.

California’s current economic difficulties, the governor would find, are offset in part by the area’s growth in international trade.

The state, Pisano told the group at the Meridien Hotel, has suffered a severe and real decline in jobs. Orange County lost 16,200 jobs last year, on a base of 1.2 million jobs, compared to a loss of 60,000 jobs in Los Angeles, on a much larger base.

The county is “relatively blessed,” with unemployment remaining relatively low at 5.4%, with some of those jobless moving to Riverside and San Bernardino, she said.

While Orange County has fared relatively well compared to Los Angeles, Pisano said, some of the same trends now evident to the north are relevant to the county’s future.

Despite the fact that the county’s overall economic growth over the past decade has kept pace with the state’s growth, and outpaced Los Angeles’ growth, the most dramatic rises have been recorded in Riverside, San Bernardino and San Diego counties, she said.

Chief among Wilson’s dilemmas are what to do to get the economy moving again, Pisano said.

One realization, she said, is that “you can’t build an economy on services.”

In order to make the state more “business friendly,” the governor has taken a good step in appointing Peter V. Uebberoth to head the Council on California Competitiveness, Pisano said. While frequently cited factors such as federal, state and local policies and regulations may not individually be harmful, taken together they make it difficult to do business in the state, she said.

Also high on Wilson’s list would be long-term investments in civic infrastructure and education, from kindergarten to the community college level, Pisano said.

Citing the results of a recent poll that indicated that 60% of people are disaffected from government, Pisano said, “We have to turn that around if we want to solve the problems of this state.”