Former Gov. Gray Davis says California is more business friendly

California is “finally moving in the right direction” in making it easier for new businesses to set up shop in the state, former Gov. Gray Davis told a panel at the annual Milken Institute Global Conference in Beverly Hills.

Speaking on what states can do to create jobs, Davis, who was recalled by voters in 2003, said the state had an “arrogant attitude” in the 1970s toward new businesses.

“You’re lucky if we let you in,” Davis characterized the attitude.

Now, the state is trying to streamline the business start-up process and avoid unnecessary delays, he said. That expediency should also be applied to other large infrastructure projects, Davis added.

Davis was part of a panel that included Indiana Gov. Mitch Daniels; Tony Hsieh, chief executive of, an online retail company in Las Vegas; and Robert Litan, vice president for research and policy at the Ewing Marion Kauffman Foundation.


The panel, which took place on the second day of the conference, touched on what states could do to create jobs and spur economic development.

The consensus: not very much.

“States don’t create jobs, at least in our view,” Daniels said. “Businesses do. At best, they create the conditions whereby they work.”

The panelists agreed that states can offer tax incentives, ease regulations and take other measures to improve their business climates, but they said that investing in education and research should be a major focus.

But one factor is out of any state government’s hands: good weather.

“Weather is a huge thing. You can’t dismiss it,” Litan said.

California, with its abundant sunshine, is attractive to many newcomers and businesses.

Litan said that while California is often criticized for having too many regulations, high taxes and a bad business climate, it is a hub of entrepreneurial activity. The state, he said, ranked second in the country in the formation of new businesses.

The Milken conference brings together hundreds of business leaders, economists and government leaders for several days to discuss topics that include U.S.-China economic relations, venture capital and social issues.


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