Bay Area Council Blog: News Archive

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Statement Denouncing Misguided Regional Measure 3 Lawsuit

The Bay Area Council today (July 10) issued the following statement responding to a lawsuit seeking to invalidate Regional Measure 3 (RM3), an initiative approved by almost 54 percent of Bay Area voters on June 5 to invest $4.5 billion to ease the region’s worsening traffic and expand and improve mass transit. The Bay Area Council partnered with Silicon Valley Leadership Group and SPUR to run the successful campaign for RM3.

“This misguided lawsuit is a little bit like someone arguing that fixing a leaky pipe has nothing to do with saving water,” said Jim Wunderman, President and CEO of the Bay Area Council. “Bay Area bridges are swamped with some of the worst traffic we’ve seen in generations, traffic that is largely the result of the 70 percent and more of commuters who every day drive alone to work. Getting commuters and others out of their cars and into mass transit, including BART, Caltrain, local buses and ferries, provides a direct and powerful benefit to everyone who uses the region’s seven state-owned bridges. Regional Measure 3 draws a clear and indisputable nexus between tolls and traffic by addressing some of the most critical bottlenecks in the bridge approaches. In addition, RM3 effectively will add greater capacity to our bridges by directing 75 percent of funding to improving and expanding critical regional mass transit systems and providing other good alternatives like bicycling and walking. We’re confident this lawsuit will be quickly dismissed or defeated.”

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ADVISORY: Bay Area Council Economic Institute to Unveil New Regional Economic Profile

SAN FRANCISCO, CA – This Tuesday the Bay Area Council Economic Institute will release its biannual comprehensive analysis of the regional economy with exclusive data and insights on different industry sectors, the overall regional economic performance and jobs, and more. The tenth in a series of Profile reports, this latest edition examines a new period of immense growth and innovation, benchmarking the Bay Area’s performance against other knowledge-based economies to assess the region’s national and global competitiveness. One of the key findings in the analysis is that the Bay Area has moved into the top 20 of the world’s largest economy with a GDP of $748 billion.

It also examines the economic and policy challenges that continue to confront the region and megaregion, even in a period of extraordinary growth, and looks to uncover the next wave of innovation and renewal. There is extensive focus on how the tech/innovation industry is continuing to shape and lead the regional economy.

The Economic Institute will host a forum on Tuesday, July 10 from 8:30 to 10:00 a.m. to unveil the profile and review the findings. Please contact Virginia Drake at vdrake@bayareacouncil.org or 415-946-8716 to RSVP.

WHAT: Bay Area Economic Profile Release

WHEN:

Tuesday, July 10, 2018
8:30am – Registration & Breakfast
9:0am – Program

AGENDA:
8:30am
Welcome Remarks
Jim Wunderman
President and CEO, Bay Area Council

8:40am
Regional Competitiveness in
A Global Context
Alexis Krivkovich
Managing Partner Silicon Valley
McKinsey & Company

Kunal Modi
Associate Partner
McKinsey & Company

9:05am
Bay Area Economic Profile:
Continuing Growth and Unparalleled Innovation
Dr. Micah Weinberg
President
Bay Area Council Economic Institute

10:00am  Q & A

WHERE:
Bay Area Council Headquarters
353 Sacramento Street, 10th Floor
San Francisco, CA 94111

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STATEMENT: COUNCIL IN SUPPORT OF GOVERNOR’S ESTABLISHMENT OF A WILDFIRE PREPAREDNESS AND RESPONSE CONFERENCE COMMITTEE

The Bay Area Council applauds Governor Jerry Brown and the Legislative Leadership’s decision to convene a conference committee dedicated to Wildfire Preparedness and Response. We are pleased that the Governor and Legislature are actively following up on the commitments made in January to ensure a solution focused approach to the critical climate change and weather disaster-related issues facing California. While this response is a major step for the state, we cannot understate the need to address the issue of 2017’s wildfire season liability.

While remaining solution oriented is critical, we need to ensure that those solutions are encompassing of the complex nature surrounding this issue. With the recent addition of Assemblymember Bill Quirk’s securitization bill, AB 33, we believe that the legislature is moving in the right direction to address the broader implications associated with wildfire-related climate risk.

The proposed legislation would enable the state to assist those directly impacted by wildfire through the issuance of low-cost, long-term utility-backed bonds to ensure compensation. The bill would modernize current legislation to address the financial demands resultant from the catastrophic wildfires. Most importantly, this approach would minimize costs on the customer while holding utilities accountable for any involvement in the fires.

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Endgame: Tariffs, Technology and China

This opinion piece by Bay Area Council Economic Institute Senior Director Dr. Sean Randolph appeared in the Silicon Valley Business Journal in April 2018.

The United States and China are aggressively sparring over tariffs, trade and technology. The real issue isn’t about the lists of tariffs that each side has announced, but what endgame both sides expect. As an investor in China and a major destination for investment from China, for Silicon Valley the outcome matters.

Let’s be clear that the latest tariffs aren’t a Trump protectionist fluke. Action is needed. China is building an innovation system based not just on its considerable capabilities, but also on laws and policies designed to extract technology from foreign partners.

One of those strategies, Made in China 2025, identifies priority technology sectors where China plans to lead global markets, displacing foreign technologies as rapidly as possible. Where it can’t develop those technologies independently, the plan calls for China to acquire them. In the meantime, Western companies are required to store their China-generated data on government servers, take on Chinese joint venture partners as a condition of doing business, and transfer their technology and source code.

This is happening as China’s market is off limits to companies such as Facebook, Google and Twitter, and key sectors are reserved for Chinese companies. Internet technologies must be “secure and controllable” — by the government. All of this inherently advantages Chinese companies and disadvantages foreign ones.

There are two types of tariffs announced by the United States: first, industry-specific tariffs on steel and aluminum, imposed on national security grounds (a risky precedent); and second, tariffs to address the bilateral trade deficit and rebalance the technology playing field. There, the Trump administration announced an initial tranche of $3 billion, which was met by a $3 billion response from China. Then the U.S. announced a $50 billion list, met again by $50 billion from China, after which President Trump suggested another $100 billion. What happens next?

What should happen is that both sides go into a room and make a deal. The tariff announcements are designed to get China’s attention, show we’re serious, and get them to negotiate. Past administrations from both parties have repeatedly tried negotiation, but with little lasting effect. The Trump team has chosen to show its muscle up front.

This can work, and taking a tougher stance with China has bipartisan support. But there are risks. Tariffs are a crude tool, with little connection to technology policy. And undisciplined U.S. tactics could backfire if both sides actually implement the tariffs.

Last year, California exported $16 billion in goods to China, many of which show up on China’s list. California’s agricultural interests — high-value nuts, wine and grapes — are particularly vulnerable. The aircraft industry, cars and chemicals are also targets. Higher steel and aluminum prices will increase the cost of everything from building materials to Teslas to craft beer cans.
Trump has said “it’s easy to win a trade war.” That’s wrong — in a trade war, everybody loses. As the world’s two largest economies, China and the United States have to live together. President Xi’s statement this week that China will accelerate its market opening is a signal that China understands the game.

In the end, the U.S. should press for a market opening that’s not just near-term and tactical, but long-term and structural. The best strategy would be to orchestrate our trading partners in a united front against China’s trade infractions, initially in the World Trade Organization, and bilaterally target Chinese restrictions with reciprocal measures — if negotiations are unproductive.
But we have the process we have. It’s in the administration’s court now to manage the process, make a deal, and minimize the damage that California and other businesses will suffer from a real trade war.

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Council Urges Immediate Action on Comprehensive Federal Immigration Reform

The Bay Area Council today (June 20) issued the following statement on the urgent need for enacting comprehensive immigration reform and ending the practice of separating children from parents.

“The Bay Area Council joins with the growing number of business organizations, companies and other leaders across the country in urging the Trump Administration and Congress immediately to enact long overdue immigration reform and to end the “zero tolerance” policy that is causing the inhumane, painful and unnecessary separation of children from their parents along our borders. We need clear, comprehensive and fair immigration laws and policies that recognize the importance of immigrants to our country, our communities and our economy. These reforms should permanently address the fate of so-called Dreamers, and we strongly advocate for an expansion of visas for foreign workers and others who play a vital role in addressing employment needs and contributing to our economy.”

china innovation report

Opinion: What ZTE Deal Tells Us About Chinese Technological Prowess

(This OpEd by Bay Area Council Economic Institute Senior Director Sean Randolph ran in the San Francisco Chronicle on Sunday, June 17.)

By Sean Randolph

The interdependence of the United States and China is easily lost in the political debate and headlines. The future of trade between the world’s two largest economies depends on policies that recognize that interdependence and the national interests behind them. ZTE is a case in point, where the United States has penalized the company for its actions, and President Trump has correctly decided not to shut it down. ZTE also tells us something about the technological race that both countries are engaged in.

China is climbing the innovation ladder. Whether from the standpoint of government investment in science; internationally-cited scientific articles; R&D on artificial intelligence; advances in mobile commerce; the strong position of companies like Alibaba, Tencent and Huawei; or the explosive growth of domestic accelerators and venture capital, China’s capacity to innovate is advancing with its economy. At some point, the technology gap between the United States and China will significantly shrink.

But not yet.

It’s easy to think of China as a relentless juggernaut whose growth and technological competitiveness is preordained. Besides the technology generated from market competition  China has adopted a suite of Chinese industrial policies designed to create national champions, dominate or lead in key strategic sectors, and extract technology from foreign companies — a cause for deep concern in the U.S. and other economies, which is now being challenged bilaterally and in the World Trade Organization. But even if they went unchallenged, having these policies doesn’t mean that Chinese technology is on a par with that of the United States — or soon will be.

Take, for example, the explosive growth of venture investment in China. Last year it reached levels approaching that of the United States. But as impressive as this may be, it’s important to understand the large role that government money plays. Unlike the United States, where venture investment is overwhelmingly private, much of the venture capital deployed in China comes from government entities.

More than $230 billion reportedly has been deployed so far, including most recently  as much as $15 billion in the semiconductor sector. While this is significant, and leverages private investment, its source suggests that Chinese and U.S. venture numbers aren’t strictly comparable.

Or take Chinese cell phone maker ZTE, the fourth-largest provider of smart phones in the United States and producer of a range of consumer electronics and telecommunications infrastructure equipment. Two months ago, the United States barred American companies from selling components, including semiconductors, to ZTE, because of the company’s violation of Iran and North Korean sanctions (an issue unrelated to the current tariff dispute). Soon after that ZTE, one of China’s leading technology companies, announced that it would stop major business operations.

How could that happen?

Because ZTE depends heavily on U.S. companies such as Qualcomm for the semiconductors in its phones and on other U.S. suppliers for an array of critical components. Despite years of enormous government investment designed to vault China to the forefront of chip design, nearly 90 percent of the $190 billion in chips used in Chinese products are either imported or produced in China by foreign-owned companies, and the sophistication of its production continues to lag. The proposed U.S. cutoff may prod China to accelerate its efforts to upgrade the quality of domestically produced chips, but for now it’s still just a goal.

So what are we to make of this? One takeaway is that while innovation in China is accelerating, in key fields U.S. companies are continuing to innovate faster. Notwithstanding the government’s support and the sophisticated capabilities of companies Tencent, Alibaba and Huawei, the lead in innovation is still anybody’s game and the United States continues to hold strong cards.

The other takeaway from the ZTE case is that when it comes to trade and technology, the United States and China are deeply intertwined. ZTE phones sold in China and around the world, and counted in U.S. trade statistics as Chinese exports, in fact incorporate high levels of U.S.-made content. Much the same can be said for Huawei, whose products are largely made with externally sourced components.

President Trump is right to make a deal that helps keep ZTE in business. The penalties it imposes are draconian and appropriate. Our goal should not be to bring down a high-profile pillar of China’s economy. The world’s two largest economies, and their  companies are deeply connected in ways that are both challenging and beneficial. Finding a way of operating that recognizes the interests of both sides will be essential for the future.

Sean Randolph is senior director at the Bay Area Council Economic Institute and author of its recent report “Chinese Innovation: China’s Technology Future and What It Means for Silicon Valley.”

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CONDOLEEZZA RICE, DAVID BROOKS & #METOO LEADERS WOW PACIFIC SUMMIT

The timing was ideal. As President Trump met with North Korean leader Kim Jong Un in Singapore, guests at the Bay Area Council’s 2018 Pacific Summit on Tuesday were sitting down to hear from former Secretary of State Condoleezza Rice on what it all meant. In a lengthy conversation with Andrew Westergren, Senior Vice President and Global Head of Strategy and Corporate Development for Visa, in front of almost 200 top executives and other leaders, Rice candidly acknowledged the unconventional way in which the summit came together but also said it was worth a try given the failure of past efforts. Rice also gave her insights and analysis about the tumultuous G7 meeting in Canada, talked about U.S.-China relations as a trade war looms and provided insights into the motives and agenda of Russia President Vladimir Putin.

With national attention intensely focused on the issues of sexual harassment and discrimination, the timing was also perfect for a lively conservation with two leaders of the #MeToo movement. Janet Liang, President of Kaiser Permanente Northern California, moderated the discussion with Adama Iwu, Vice President of State Government and Community Relations for Visa, and Tina Tchen, former Chief of Staff to First Lady Michelle Obama and Partner at Buckley Sandler. Iwu was honored as a Time magazine Person of the Year for her work in founding We Said Enough, a group focused on exposing and changing a culture of sexual harassment and discrimination in the California legislature. Tchen is a leader of Time’s Up, which works to support women who have suffered sexual harassment or discrimination. The three gave their personal insights on the #MeToo movement and the cultural and institutional changes that must occur in order to end sexual harassment and discrimination.

The audience also was treated to sobering and humorous remarks from renowned New York Times columnist David Brooks. Brooks, in his comments and in a Q&A with McKinsey & Co. Senior Director and West Coast Regional Manager Kausik Rajgopal, talked about cultural and political divides in the U.S. and how a sense of community that has united people in the past has been replaced by tribalism, which by its nature divides people.

See photos of the Pacific Summit>>

The conversations continued later in the afternoon in smaller group discussions, with PwC Managing Partner Jeanette Calandra moderating a conversation with Tchen, UPS Northern California District President Rosemary Turner leading a discussion with Dr. Rice and TMG Partners leader Denise Pinkston guiding a talk with Brooks. Bay Area Council CEO Jim Wunderman opened the summit with insights about the Bay Area’s run of economic success and the housing and transportation challenges that threaten to pull the rug out from under it.

The Bay Area Council extends its thanks to Visionary sponsor Kaiser Permanente and the many other sponsors whose support is critical to funding our public policy and advocacy. See a full list of all Pacific Summit sponsors. Our thanks also to the Kohl Mansion for hosting us.

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2018BACPoll: Voters Hold Dim View of Tax Reform, Immigration Crackdown

As the national debate on immigration rumbles – from banning or punishing so-called sanctuary cities, fortifying borders, ending Deferred Action for Childhood Arrivals, restricting H-1B visas, to travel bans – Bay Area voters are drawing clear battle lines, according the 2018 Bay Area Council Poll.

According to the 2018 Bay Area Council Poll released today, 55 percent of Bay Area voters disagree with the federal crackdown on undocumented immigrants. Another 28 percent favor the stronger actions under the Trump Administration on those here illegally and 17 percent aren’t sure what to think.

“Regardless of what side of the immigration debate you’re on, there’s just one thing to know: our immigration system is broken,” said Jim Wunderman, President and CEO of the Bay Area Council. “What we need and what we’ve been calling on Congress to do for years is comprehensive immigration reform. Immigrants have and continue to be valuable contributors to our economy and our communities. But we also need to recognize that we need a better, more accountable system for securing our borders, enforcing our laws and making sure that people are treated fairly and humanely.”

Republicans and Democrats are highly polarized in their opinions on immigration. The poll found 80 percent of Republicans think cracking down on undocumented immigrants is a good thing while 76 percent of Democrats disagree. Geographically, San Francisco led the nine-county region in opposition to the crackdown at 70 percent, followed by Alameda County at 59 percent. At 47 percent, Contra Costa County registered the least opposition to the harder stance against undocumented immigrants.

On another unrelated federal issue, Bay Area voters also weighed in on the tax reforms Congress approved last year and President Trump signed. The poll found 45 percent of voters anticipate their taxes will go up as a result of the reforms, while 19 percent said their taxes will go down and 21 percent expect them to stay the same. The results were similar across incomes. Republicans as a group was the only demographic to say their taxes would go down.

The 2018 Bay Area Council Poll, which was conducted online by Oakland-based public opinion research firm EMC Research from March 20 through April 3, surveyed 1,000 registered voters from around the nine-county Bay Area about a range of issues related to economic growth, housing and transportation, drought, education and workforce.

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2018 BACPoll: 4 of 10 Have Witnessed Sexual Harassment in the Workplace

Almost four out of 10 Bay Area voters say they have witnessed sexual harassment in the workplace and a quarter say they’ve personally experienced sexual harassment on the job, according to results of the 2018 Bay Area Council Poll, which explored attitudes on a range of workplace issues.

Noticeable differences emerged among men and women. The poll found 41 percent of women say they have experienced sexual harassment in the workplace compared to just 11 percent of men. And 44 percent of women voters say they have witnessed bad behavior compared to 32 percent among men.

“The #MeToo movement has helped end the silence on sexual harassment and discrimination, but we have a lot of work to do to stamp it out completely,” said Jim Wunderman, President and CEO of the Bay Area Council. “The disparity between how men and women experience the issue is very concerning and shows that our work remains ahead of us.”

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Still, an overwhelming 91 percent said they feel safe from sexual harassment at their current job and another 82 percent trust their employer to handle sexual harassment complaints appropriately, the poll found.

See the results>>

And while high numbers of both men and women say they feel safe from sexual harassment in their current job and trust that their employer will handle complaints in the right way, women are more likely than men to feel threatened and believe their complaints won’t be handled appropriately.

It is difficult to draw any conclusions from the results about the prevalence of sexual harassment within industries given the smaller sample size of each group. The poll found 16 percent of workers in the presumably male-dominated tech industry reported experiencing sexual harassment, the second lowest behind trade workers and much lower than the 35 percent in education and nonprofit fields.

On pay equity, the poll found 82 percent agree their employer attempts to pay fairly regardless of gender or ethnicity. There was only a small difference between the sexes, with 79 percent of women saying pay is handled fairly and 85 percent of men. Along ethnic lines, 88 percent of Latinos agree their employers attempt to pay fairly regardless of gender or ethnicity while 82 percent of whites and 81 percent of Asians believe that.

Findings among voters on several other workforce related questions include:

  • 33 percent expect a significant labor shortage in the next three years while 31 percent say there will be no shortage.
  • 66 percent have a favorable view of the business community
  • 83 percent say they are happy in their current job
  • 80 percent say they plan to remain in their current industry for at least the next five years

The 2018 Bay Area Council Poll, which was conducted online by Oakland-based public opinion research firm EMC Research from March 20 through April 3, surveyed 1,000 registered voters from around the nine-county Bay Area about a range of issues related to economic growth, housing and transportation, drought, education and workforce.

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2018 BACPoll: Can Transportation Tech Solve Bay Area Traffic?

Bay Area voters are embracing new automobile and transportation technologies, from ride-hailing apps to responsive traffic signals, drones and electric and self-driving cars, to combat the region’s awful traffic, according to the 2018 Bay Area Council Poll.

The poll found a significant 69 percent of voters want traffic signals upgraded with technology that makes them responsive to actual traffic conditions, even if that means diverting money from other transportation priorities. Such technology has been tested in recent years in several Bay Area cities, including San Jose, Palo Alto, Santa Rosa and Hayward, but hasn’t been put into widespread use.

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Ride-hailing services like Uber and Lyft continue to be a popular choice for commuters. The Bay Area Council Poll found that from 2015 to 2018 those who have never used a ride-hailing application dropped from 68 percent to 39 percent, although there was little change from last year. Still, 74 percent said these services are an important part of the Bay Area’s transportation system and 56 percent say they have made it easier to get around.

“We need to put the pedal to the metal in developing and deploying new advanced transportation technologies that can improve our region’s mobility,” said Jim Wunderman, President and CEO of the Bay Area Council. “It may be a number of years before some of these new technologies are fully proven, but that should not delay us in continuing to invest, experiment and learn how they can help solve one of our most intractable problems. With companies like Tesla and Proterra, the Bay Area has quickly become a leading global center for innovation in the automobile and transportation industry. It’s extremely exciting to think about how these technologies will transform the ways in which we get around.”

See the results>>

Many Residents Not Ready for Self-Driving Cars

Self-driving cars is one of those early-stage technologies, and they continue to intrigue Bay Area voters. The poll found 46 percent of voters willing to relinquish control of the steering wheel, down from 52 percent in 2017, but consistent with the previous two years. Almost a quarter of voters said self-driving cars can solve the Bay Area’s traffic problem, but the poll found 65 percent of voters remain unconvinced about their traffic-busting ability.

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That may have something to do with the fact that many voters in the survey still think it will be awhile longer before self-driving cars outnumber human drivers on the road. While 31 percent say self-driving cars will be the majority plying the roads within the next 10 years, 45 percent say self-driving cars won’t rule the roads for 11 to 50 years or more and 8 percent don’t see them ever taking over. The overall average time is 16.36 years.

Electric Vehicles Gain Traction

As California pushes to meet an aggressive goal set this year by Gov. Jerry Brown of putting 5 million zero emission vehicles on the streets by 2030, voters appear willing to spend a little bit more to help make that happen. The Bay Area Council Poll found that 55 percent would dig a little deeper to drive an all-electric vehicle. Still, voters harbor concerns about the range of electric vehicles, with 40 percent saying they wouldn’t use an all-electric car because they don’t go far enough on a single charge.

The support for all-electric vehicles is mirrored in voters’ attitudes about a proposal to ban all fossil-fuel powered cars in California by 2040. The poll found 52 percent of voters agree California should do away with gas-powered vehicles.

On several of the questions involving self-driving, ride-hailing and electric vehicle technologies, younger voters generally showed higher support.

Voters Embrace Ferries and Flying Drones

Ferries may not meet the strict definition of advanced technology transportation, but voters see them as a popular alternative to the region’s clogged roadways and other overburdened mass transit systems. The poll found that 66 percent of voters would take a ferry if it took them where they wanted to go. That should be strong encouragement for the Water Emergency Transportation Authority, which operates the regional SF Bay Ferry service, as it works on an ambitious plan to dramatically expand regional ferry service along traditional east-west routes and new routes connecting with Silicon Valley and Richmond.

Flying drones may not carry commuters (yet), but they offer the chance to remove cars and trucks from the roads. That’s appealing to voters in the Bay Area Council Poll, which found 54 percent support the use of drones if it means delivering packages faster, cheaper and with fewer carbon emissions.

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The 2018 Bay Area Council Poll, which was conducted online by Oakland-based public opinion research firm EMC Research from March 20 through April 3, surveyed 1,000 registered voters from around the nine-county Bay Area about a range of issues related to economic growth, housing and transportation, drought, education and workforce.