Rebuild California : First it was Rebuild L.A. Now business, labor and political leaders say the state’s economic woes call for a new campaign to . . .

In a darkened conference room here one recent afternoon, more than 80 Silicon Valley business executives and politicians sat pushing buttons on hand-held electronic terminals, registering their opinions on an array of proposals for improving the region’s economy.

What did they think was the best way to assure a skilled work force? How might the regulatory process be made less burdensome? What should be done to promote new business formation? In six such categories they voted, expressing their preferences on 30 separate ideas that had been put forth by a series of working groups.

The results, tabulated instantly on a video screen, were anything but conclusive, with all the scores falling into a narrow range. But the organizers of the meeting were undaunted: This peculiar form of electronic democracy is just one of the novel consensus-building techniques being used by the ambitious public-private partnership known as “Joint Venture: Silicon Valley.”

Launched with great fanfare this summer, Joint Venture aims to unite business and government in attacking a broad set of economic and social ills that have long afflicted less successful regions of the country but have only recently arrived in the home of high-tech.

If it succeeds, the initiative could become a much-needed model for a new type of relationship between local government and the business community, helping to establish a new set of mechanisms for attacking social and economic problems.

Certainly, it’s a timely undertaking: Throughout California and the nation, business leaders and public officials are recognizing that new modes of cooperation are essential in an age of cash-starved government and competition-battered industry. Such local efforts could work hand-in-glove with the activist industrial policy expected to emerge from the Clinton Administration.

Yet nobody knows how such cooperative arrangements should be shaped, or what they might reasonably hope to accomplish. And while Joint Venture has done an impressive job of rounding up support thus far, it remains unclear whether the group can move beyond the narrow interests of the business community and seriously address public policy issues such as education, job creation, transportation and environmental regulation.

“It’s essential, timely, and a fine model for the rest of the state,” Assemblyman John Vasconcellos (D-Santa Clara) said. “But it’s too top-oriented--the participation needs to be broadened to reach workers and (their parts) of the public. . . . We all need to learn more about collaboration and inclusion.”

The notion that business and government should join forces in dealing with regional economic and social problems isn’t new. In the East and Midwest, various sorts of public-private partnerships have been around for years. They became especially popular in the 1980s as the Reagan and Bush Administrations urged business to take a bigger role in dealing with what were once considered exclusively government problems.

Some public-private efforts--such as the statewide economic strategy plans developed in Florida and Arizona or the highly successful economic development program spearheaded by the Austin, Tex., Chamber of Commerce--are designed primarily to attract investment in up-and-coming high-tech industries.

Others, such as the Ben Franklin partnership in Pennsylvania, aim to bolster existing small- and medium-sized businesses with low-cost loans and technical assistance. Still others, such as the Oregon Shines project in Oregon, are focused on education and other broader social issues. But in one way or another, all seek to make their region a better place to do business.

In California, however, public-private partnerships generally have been considered unnecessary. The advantages of locating a computer chip company in Silicon Valley or a machine-tool shop in Los Angeles were so obvious that businesses came and grew without any special attention. Despite periodic complaints about high taxes and stringent environmental regulations, the entire issue of economic development for decades has been far down on the state’s political agenda.

“We’ve had an economic development strategy, and it’s been the Pentagon,” said Lee Grissom, senior policy adviser to Gov. Pete Wilson, in reference to the defense spending that has long been the keystone of California’s economy.

Yet today, with the defense budget shrinking and the state mired in its worst economic downturn since the 1930s, many believe that California’s mix of high taxes, high land costs, regulatory requirements and deteriorating infrastructure are driving businesses away. Even those who contend that the problems with California’s “business climate” have been greatly exaggerated agree that the issue needs to be addressed in a more serious way.

And Silicon Valley is a good place to experiment. In Los Angeles, the public-private Rebuild L.A. effort--one of the few partnerships that’s trying to address the entire range of economic and social problems afflicting the inner city--is in danger of being overwhelmed by the vastness of the post-riot problems. But Silicon Valley, despite its woes, is the most economically vibrant area of the state, and much of the high-tech industry remains robust despite the recession.

“Other communities are trying to figure out how to look like Silicon Valley,” noted Doug Henton, an economist with SRI International, the Menlo Park consulting firm that’s been hired to manage the Joint Venture project. “But today, Silicon Valley is trying to invent a new model,” one that will enable it to compete as a region not only with other areas of the country but with other parts of the world, Henton said.

Yet the problems facing Silicon Valley are similar in kind--if not in degree--to those found in Southern California and elsewhere. Unemployment has been rising--from under 4% two years ago to more than 6% today. Many public schools are going downhill. Rush-hour traffic crawls along overburdened freeways. The quality of life that attracted so many people to the area is perceived to be deteriorating as pollution and ugly urban sprawl despoil the once-pristine landscape.

All this comes even as the high cost of land, taxes, workers’ compensation insurance and environmental regulations make Silicon Valley a very expensive place to do business. Thus, a firm looking to set up shop here has to absorb extra costs but cannot offer employees the suburban utopia they’ve come to expect.

“Ten years ago, I made a decision to move here from central Texas to start a business,” said Jim Carreker, chief executive of Aspect Telecommunications, a fast-growing vendor of specialized telephone switching systems. “That decision would be more difficult today. And I’m concerned that other entrepreneurs might not make the decision to move to Silicon Valley because of the perception that other places are more attractive.”

The concerns run deep enough that the business community is now prepared to do something it has never done before: engage in a serious dialogue with local government. In the best tradition of cowboy capitalism, the entrepreneurs who built Silicon Valley have traditionally viewed government with contempt, and local government in particular was something that could be safely ignored.

“There’s been a historical animosity toward the public sector in Silicon Valley,” Anno Saxenian, a professor of urban planning at UC Berkeley, said. “The attitude was: Keep out of our lives.”

The fragmentation of the region’s public sector--a bewildering mish-mash of cities, towns, counties and regional government agencies--has made it especially tempting for companies to take this approach. And the decentralized government has been matched by the decentralization of industry itself. Though a few firms--notably Hewlett-Packard, Lockheed, Apple and Intel--each employ many thousands of people, the bulk of Silicon Valley industry is made up of small companies that have neither the ability nor the incentive to attack big economic and social problems on their own.

Even on issues that directly affect business, moreover, companies often have conflicting interests.

But ever since the valley’s computer chip manufacturers began to face substantial foreign competition in the early 1980s, there has been a recognition that the federal government, at least, could have an important influence over the health of high-tech industry. And now it’s becoming apparent that the policies of state and local governments matter as well.

Take Intel Corp.’s desire to expand its chip making operations in Santa Clara. The $400-million project required more than 200 different permits for everything from basic construction to water use and waste disposal, and dozens of public and private entities were involved in the process. Under normal procedures, it would have taken about 18 months to get all the necessary approvals--a veritable lifetime in the fast-moving computer chip business.

Intel Chairman Gordon Moore said the company would have built elsewhere if the California Department of Commerce had not intervened and shepherded the permits through in just one-third the normal time.

Many executives and public officials said the very fact that business and government are talking with one another via Joint Venture is a breakthrough.

“This is the first time that anyone has gotten the public sector and the private sector to work together in an organized fashion,” said Susan Hammer, mayor of San Jose. “It’s a good concept.”

Yet there are many reasons to be skeptical about Joint Venture. Born at the San Jose Chamber of Commerce and now led by Jim Morgan, chairman of the chip equipment firm Applied Materials, and Tom Hayes, director of corporate affairs at the same company, Joint Venture must still prove that it represents more than the corporate community--and that it can actually get things done.

Though the project attracted an impressive groundswell of support at the start--about 1,000 people attended the kick-off luncheon in June--there were also dissenters.

“Initially, Hewlett-Packard and a number of other companies were rather skeptical because of the lack of substance,” said Gene Endicott, director of corporate affairs at Hewlett-Packard. Companies didn’t want to get involved in a mere report-writing effort that produced high-minded analyses of the problems without offering feasible solutions.

H-P also feared that the project would become “a tool of the (real estate) developers”--a group that is influential in the Chamber of Commerce but has an agenda very different from that of the high-tech community.

Endicott and H-P were eventually persuaded that the effort was worthwhile. Still, some of the most prominent local high-tech executives--including David Packard of Hewlett-Packard, John Sculley of Apple Computer and Gordon Moore of Intel--have avoided direct involvement with the project, though H-P and Intel are contributing money and the time of lower-level employees.

An even more serious concern is whether the initiative really provides a forum for generating and nurturing innovative ideas--as the sponsors contend--or simply provides an illusion of participation to help legitimize the existing agenda of various interest groups.

“They’re inviting the public in, and that’s good,” said Lenny Siegel, director of Pacific Studies Center, a Mountain View-based public interest group.

“But the decisions are all being made by the steering committee,” he added, expressing concern that the ultimate recommendations will reflect “the narrow interests of the people who started the project.”

Zoe Lofgren, chairman of the Santa Clara County Board of Supervisors, added: “The leadership (of Joint Venture) is male and white, and the population (of Silicon Valley) is not. They don’t have a clue what’s going on with the broader population.”

The organizers acknowledge that they need to seek more participation from minorities and other groups outside the business community. And they’ve made some progress on that score.

“They’ve moved to get some people from labor, some people from the environmental community” said Rick Sawyer, head of the San Jose Central Labor Council. “Is it representative enough? No. Is it improving? Yes.”

Even with a relatively narrow base of participation, there are a remarkable variety of views on what Joint Venture is supposed to accomplish. One element of the estimated 800 people involved in various aspects of the project are focusing on the business climate and such problems as slow permit processes and high taxes.

“Businesses go where they’re welcome and stay where they’re appreciated,” Jim Morgan said, summing up what he regards as Joint Venture’s key challenge.

Yet others view education, worker training and transportation--which have a less direct impact on business-location decisions--as the key issues.

Still others see the goal as defining the needs of specific industry sectors so that they can present a united front in dealing not only with local government but with the state and federal governments as well.

The organizational structure of Joint Venture highlights these differing interpretations. There are 13 working groups, seven focused on the concerns of certain industry segments and six devoted to broad public policy areas such as “work force” and “physical environment.” Over the last two months, each of these groups has held open meetings at which anyone is welcome to contribute ideas.

The meetings are somewhat haphazard affairs, eliciting a mix of broad, vague suggestions on big problems and highly specific ideas that appear to be the pet projects of the people proposing them. All proposals are duly logged--or “captured,” in SRI International’s jargon--and the results circulated among all the working groups.

Ultimately, Joint Venture aims to identify a handful of major “flagship” initiatives, as well as a series of smaller projects. In most cases, responsibility for implementing programs will be handed off to existing government agencies or private-sector entities. The critical question of funding will not be addressed until decisions have been made on what programs to pursue.

And making those decisions is no easy task, as participants discovered last Monday at the first meeting of the “leadership group,” which includes the heads of each working group as well as members of the project’s board of directors, advisory board and public sector committee.

The meeting began with an effort to establish general criteria for judging specific proposals--and controversy immediately erupted over whether successful proposals would have to have a positive impact on the Silicon Valley economy, or whether they would simply need to contribute to community well-being in some more general sense.

Each working group then gave a brief presentation of its results.

The work force group, for example, advanced seven ideas, including creation of a business-education forum to build better links between schools and industry and establishing industry-specific “academies” in all Silicon Valley high schools.

The “regulatory climate” group had a handful of ideas on how to make the regulatory process more efficient, including the establishment of an electronic clearinghouse to link different regulatory agencies.

The physical environment group suggested promoting the development of “urban villages” that would mix housing and services near transportation corridors.

Then the electronic voting took place, with each participant asked to score the individual projects on a scale of one to 10--and nearly every project received a rating between six and eight.

Finally, there was a discussion of whether to push ahead quickly with a proposal to “wire the valley” with an advanced telecommunications network. That was an idea that had come up in a number of the working groups--and also happens to have been a favorite of Applied Materials’ Tom Hayes and other key players in Joint Venture right from the start. But it received only a lukewarm reception.

Indeed, the sponsors’ hopes that consensus can be reached on major decisions may well prove to be wishful thinking--in which case the trade-offs among conflicting interests will likely be made by the business-dominated board of directors.

And at least one participant in last week’s meeting doesn’t buy the incantations about how Joint Venture taps the rich vein of creativity and initiative that resides in Silicon Valley.

“Maybe we need some radicals,” said Peter H.M. Chang of the Asian Manufacturers Assn., noting that the true creative spirits of the valley, such as Steve Jobs, were young iconoclasts.

“Where are the young people? They stay away from here. This is the Establishment.”