Seattle Fast Challenging L.A. as Leader of New Order : Trade: Los Angeles could learn a few lessons from the successful host of APEC. Strong corporate identification with regional interests is one.

Joel Kotkin, a contributing editor of Opinion, is a senior fellow with the Center for the New West and international fellow at the Pepperdine University School of Business in Los Angeles. He is also business-trends analyst for Fox Television

By hosting a virtually flawless conference of Asian and Pacific leaders last week, Seattle has served notice that it is a candidate to lead the emerging Pacific economic order. Indeed, what the APEC conference has done for Seattle parallels what the '84 Olympics did for Los Angeles.

To a global group of media and economic heavyweights, Seattle presented the image of a largely united city, with a popular African-American mayor backed by powerful business interests, eager to carve out a dominant role in the global economy. By contrast, Los Angeles, battered by an almost unceasing barrage of negative publicity, seems to be losing its place in the Pacific Century.

For several years, press reports out of Seattle have told of a mass migration of skilled immigrants and technology com-panies from a troubled Los Angeles to its healthier environs. Largely ignored was any serious coverage of Seattle's own looming social and economic problems.

As is Southern California, the Puget Sound is undergoing a decline of manufacturing largely because of high taxes and burdensome regulations. Its premier industrial company, Boeing, is "hollowing out" its sourcing in the region in favor of overseas firms and lower-cost states. As a result, many small and mid-sized supplier companies, long a backbone of the local economy, have been decimated.

Seattle's little-publicized social problems, including gangs and drugs, also resemble L.A.'s. And, as down south, these inner-city ills are pushing white Seattlites and their businesses to cheaper, safer and less regulated environments in eastern Washington and Idaho.

Yet, long before APEC, the real secret behind Seattle's successful challenge to L.A.'s Asian-Pacific leadership lay in its ability to form a broad-based consensus on the region's collective future. Even in the face of a downturn in aerospace business, Seattle's leading companies kept regional bashing to a minimum.

For example, although cutting back on local sourcing, Boeing's top management, in contrast to the attitudes at the top of many large L.A.-based aerospace companies, remained committed to promoting the region's advantages, particularly to overseas trading partners and investors. Similarly, rather than simply trying to placate Boeing, local economic-development groups like the Economic Development Council of Seattle-King County focused on promoting other growth sectors, like computer software.

This pattern of strong corporate identification with regional interests may also account for Seattle's consistently strong rankings in influential business surveys. Fortune magazine, for example, has consistently ranked Seattle at the top of its business-survey lists, as a place to do business, find talented employees and conduct international commerce.

Southern California's dispirited leadership class, by contrast, seems unprepared to compete in the race to attract new Asian investor interest.

Since the riots, anyone who dares to raise the prospect of Los Angeles as an Asia-Pacific economic center is likely to be criticized for blind boosterism. Instead of a prerequisite for social progress, the global economy is portrayed as threatening the poor and the environment.

Yet, despite the general ineffectiveness of its leadership class, Southern California can--and should--make the case for a predominant role in America's interface with the new economy. As home to the largest settlement of Asian and Latino immigrants in the country, it is well-positioned to serve the emerging economies of Latin America and Asia.

Indeed, despite the APEC hype about its ethnic-Asian connection, Seattle's Asian population is less than one-fifth the size of Los Angeles' and ranks behind that of Orange County. There is simply no analog in Seattle or its environs for the dynamic Asian communities of the San Gabriel Valley, Little Saigon or Koreatown, with their networks of banks, manufacturing and warehousing enterprises. Representatives from these communities, not surprisingly, were among the few visible representatives of our region in Seattle.

In the long term, perhaps our greatest advantage is the scale of our global connection. Los Angeles' volume of global trade is more than twice that of the Seattle area and growing just about as quickly. At the same time, our concentrations of virtually every key export industry, from medical instruments and computers to textiles and entertainment, dwarf those of the Puget Sound area.

But most critical, Southern California boasts a huge local market of more than 20 million people, as well as rapidly growing satellite populations in Nevada, Arizona and Baja. By comparison, Seattle, with fewer than 3 million people and not much else till you get to Chicago, simply cannot compete.

Still, however strong the case for investing and doing business in Southern California is, it cannot make up for the lack of positive promotion of the region. Like many American businesses, the Asian entrepreneurs and executives wooed by Seattle often lack any compelling reasons to believe that the best pathway to the North American future lies through this region.

Reversing this trend may have to wait until the emergence of a new kind of business and political leadership more comfortable with our role in the new global economic order. At stake is far more than the future of our elites, but our long-term regional prospects.

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