A LOS ANGELES TIMES - FINANCIAL TIMES SPECIAL REPORT : The Next California--The State’s Economy in the Year 2000 : The Next California / DIVERSITY AND SMALL BUSINESS : ACTION FILE / Alvin Toffler : Healthy Relationships With Each Other, With the World

Toffler argues that California needs to capitalize on its ethnic diversity.

“Rather than looking at ethnic difficulties as purely sources of trouble, they are resources we can use in penetrating the most vibrant markets in the world--Asia to the west and Mexico and Latin America to the south.

We should be saying, ‘Look, Mexican-Los Angelenos, El Salvadorans, South Americans and Asians, look back to your places of origin and tell us what can we sell to them, what can we do with them, what partnerships can we make with them?”

He says the future depends on two things: our relationship to Asia and our ability to deal with our own internal racial and social problems.

“Capital will flee . . . as social problems intensify and so will intellectual capital. People, who are more important than money, will leave. That is the social part. As for the economic part, we have to look at our relationship to the most dynamic parts of the global economy, and that means Asia. A very important strategic question for us is how much advantage can we take of the developments there.”

There are enormous investment opportunities, and the fact that we have a large population of Asians here is an enormous edge for us. There is an entire network out there of English-speaking, hard-driving, very successful young entrepreneurs throughout the Pacific Rim.

WILL IT WORK?

To some extent it will continue to evolve naturally because so many Californians have links to entrepreneurial networks abroad. The problem is whether we can achieve economic integration with the Pacific Rim and Latin America in time to gain a competitive advantage over other regions. Also, will government policies encourage or hinder such a trend? Underlying it all is the question of whether racial divisions will become greater or fade in the years ahead. That depends on a wide range of factors--social, political and economic.

Meter: MAYBE