Bay Area Council Blog

Jerry Brown Introduces January California Budget

Statement: BAY AREA COUNCIL’S STATEMENT ON GOVERNOR BROWN’S PROPOSED STATE BUDGET

Bay Area Council President & CEO Jim Wunderman released the following statement today in response to Governor Brown’s proposed state budget:

“We complement Governor Brown for doing the best he can under difficult circumstances.  Ultimately, the real wildcard is whether Californians will be willing to go to the ballot box to tax themselves to stave off more cuts.  Our regional business community will need to carefully consider the ballot proposals for tax extensions, the single sales factor and changes to redevelopment agencies before announcing our positions.

We recognize that Jerry Brown has one of the toughest assignments ever given an American political leader and we want to help him succeed.  We hope the Governor will use this opportunity to permanently reform California government, which we believe is his firm intent.”

Statement PDF

1.6.11.2

Silicon Valley/San Jose Business Journal: International trade showing recovery

International trade — which declined with the global economy in 2009 — is recovering, according to a report released Thursday by the Bay Area Council Economic Institute.

“After a deep global recession, trade is growing again,” said Sean Randolph, president & CEO of the Bay Area Council Economic Institute. “This is important not just for large companies, but for thousands of small and medium sized companies as well. As a major trading region, we need to support open markets, help smaller companies succeed as exporters, and invest in the port, airport and transportation infrastructure that will support a growing volume of goods and people entering and leaving the region.”

The report said that while in recent years the United States has not actively sought new free trade agreements, three bilateral agreements negotiated by the Bush Administration — with Korea, Columbia and Panama — have been stalled in Congress.

Of those, the agreement with Korea is most important to the Bay Area, the report added.

“Passage of the Korea-U.S. Free Trade Agreement is a Bay Area priority, and should be supported by every member of the region’s Congressional delegation,” said Jim Wunderman, president & CEO of the Bay Area Council.

Read the story…

1.6.11

Press Release: International Trade Showing Signs of Recovery After 2009 Decline, According to New Bay Area Council Economic Institute Report

The Bay Area Council Economic Institute (BACEI) today released a new report, International Trade and the Bay Area Economy: Regional Interests and Global Outlook, 2010-2011. The fourth in a series produced in alternating years since 2003, the report assesses current trends in international trade, trade negotiations, regional trade activity, and trade-related infrastructure.

It finds that international trade, which declined with the global economy in 2009, is recovering.

“After a deep global recession, trade is growing again,” said Sean Randolph, President & CEO of the Bay Area Council Economic Institute.  “This is important not just for large companies, but for thousands of small and medium sized companies as well.  As a major trading region, we need to support open markets, help smaller companies succeed as exporters, and invest in the port, airport and transportation infrastructure that will support a growing volume of goods and people entering and leaving the region.”

The report notes that while in recent years the United States has not actively sought new free trade agreements, three bilateral agreements negotiated by the Bush Administration – with Korea, Columbia and Panama – have been stalled in Congress.  Of these, it finds that the agreement with Korea is most important to the Bay Area, due to the size of Korea’s economy and its status as a major trading partner.  President Obama has expressed support for all three agreements, and has negotiated amendments to the Korea agreement that will set up a Congressional vote this year.

“Passage of the Korea-U.S. Free Trade Agreement is a Bay Area priority, and should be supported by every member of the region’s Congressional delegation,” said Jim Wunderman, President & CEO of the Bay Area Council.

From a Bay Area standpoint, the report notes two other trade forums that merit particular attention in 2011. Negotiations are underway for a Trans-Pacific Partnership with nine U.S. trading partners in the Asia-Pacific region.  The United States will also host the 21-nation APEC (Asia-Pacific Economic Cooperation) Leaders Summit in Honolulu in November.  The pre-summit, which will engage 1,000-2,000 ministers, ambassadors, senior officials and business leaders from the 21 APEC economies, will be held in San Francisco in September, offering a unique opportunity to address California and Bay Area priorities.

These developments are particularly important for the Bay Area, which ranks as the nation’s fourth largest source of exports.  Asia continues to be the Bay Area’s largest export market, with computer and electronic products the leading export. The region’s exports are diverse, however, also including wine, apparel, petroleum products, and a wide array of services.

A survey conducted for the report of leading Bay Area companies and where they earn their revenue (in the U.S. or overseas) finds that 2009 broke a longstanding trend in which companies derived an ever-increasing share of revenue from global markets. This reflected the stalling of the global economy in 2008-09.  With trade gathering momentum in 2010 and strong growth in many Asia-Pacific markets, however, the historic trend toward growing dependence on international trade is likely to resume.


PDF Press Release

Download the Report

1.4.11

New CA Supt. of Public Instruction Taps Council VP for Transition Team

Our schools need help.  California’s students rank 48th or 49th in the country in reading, science and math.  Compared globally, the situation darkens further with the U.S. ranked 29th in science and 35th in math.

Luckily, help from the Bay Area Council is on the way.  The Council’s VP of Education, Linda Galliher was tapped to join newly elected Superintendent of Public Instruction Tom Torlakson’s transition team. Linda has accomplished some great things at the Council over the past year, such as leading the passage of legislation to allow teacher performance to be linked to student outcomes, helping to pass legislation to establish an early warning system for student failure or dropout, and leading the passage of legislation to raise the kindergarten entry age to five, with transitional schooling for eligible four year olds.

We’re proud of her work and we know that Linda will ensure the voice of business is clearly heard as Superintendent Torlakson assumes office. Congrats!

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KCBS: Proposed San Francisco Hiring Plan Angers Neighboring Counties

Unemployed union workers are demanding that San Francisco Mayor Gavin Newsom sign a measure requiring the city to hire more local employees for construction jobs, and business groups in at least one neighboring county oppose the law.

The so-called “local hiring law” was approved by a super-majority of the SF Board of Supervisors. It would require that at least 50 percent of the workers hired for city construction projects, actually live in San Francisco. Mayor Gavin Newsom is mulling it over.

Two local job advocacy groups held rallies at City Hall, pressuring him to sign it. James Richards leads Aboriginal Blackmen United, which is based in the Bayview.

“We want to put the Merry in the Christmas, and put the Happy back in the New Year, because that’s what that would mean to us,” said Richards. “It would give us hope for the next year if they signed the local hiring legislation.”

Richards says fewer workers can afford to live in the city, because jobs are farmed out to people from the Peninsula and the East Bay.

But Joe Arellano with the Bay Area Council, said mandating so much local hiring will send the wrong message.

“It’s setting a bad precedent for counties to basically set policies that pit each other against other jurisdictions in the Bay Area,” said Arellano.

San Mateo’s supervisors have come out against it too, saying the Bay Area needs regional solutions to its economic problems.

Listen to the story here:

Read the story…

12.21.10

Statement: BAY AREA COUNCIL ANNOUNCES OPPOSITION TO SAN FRANCISCO’S PROPOSED LOCAL HIRE ORDINANCE

The Bay Area Council today announced its opposition to a plan by the San Francisco Board of Supervisors to mandate that San Franciscans make up at least half the work force of construction projects in the City and within 70 miles of it.

Bay Area Council President & CEO Jim Wunderman released the following statement:

“This troubling trend of intra-county battles being started by the San Francisco Board of Supervisors needs to stop.  The Bay Area is one regional economy, not nine island states.  We need to focus on nurturing the fragile economic recovery in our region, not setting bad policies that pit county against county.   The Bay Area Council urges Mayor Newsom to veto this foolhardy piece of legislation.  Right now, we do not need any more incentives for businesses to leave any county, the Bay Area, or California.”

PDF Statement

8.13.10

Contra Costa Times: People must be made to understand high-speed rail strategy

By Jim Wunderman and Carl Guardino

CONFUSED IS the best way to describe how our two organizations — representing more than 600 Bay Area businesses — felt when we first heard the news that the California High-Speed Rail Authority had chosen Borden to Corcoran as the first high-speed rail segment to be built. After all, the majority of Californians probably only see those towns when they’re looking out the window as they fly up or down the state.

We would have liked to see the first phase started in the Bay Area, but the resistance cast by residents in parts of Northern and Southern California raised enough doubt in the minds of policymakers in Washington that they decided to skip over our region and allocate the funds to the safe choice. While disappointing, that should come as no surprise.

But what everyone who has called this initial route the “Train to Nowhere” is failing to grasp is that the train still needs to start being built somewhere.

Borden to Corcoran may not be ideal, but there are reasons for starting there, mainly, the estimated 80,000 jobs the first segment is expected to create. As recently as October 2010, there were 88,900 unemployed workers residing in the counties that are located along the first phase of construction — and that number doesn’t factor in the time that those Californians have been out of work, and the countless others who are struggling to get by. It’s the reason that some have dubbed the Central Valley, “New Appalachia.”

In the Bay Area, we’re still feeling the effects of the economic downturn as well, but we benefit from living in a part of the state that has historically bounced back faster, with much more prosperity when the boom hits.

The other point to consider is that regardless of where the Central Valley segment had been built, the first phase won’t be carrying trains on it. The $4.15 billion the High-Speed Rail Authority plans to spend will be used for building the stations, acquiring rights of way, constructing viaducts, grading, and re-aligning and relocating roadways, existing railways and utilities — not buying rolling stock.

So those who expected trains to be speeding by on the hour between Merced to Fresno or Fresno to Bakersfield are mistaken. It will happen, just not yet.

As many have pointed out, high-speed rail is akin to the interstate highway system created in the United States in the 1950s. The highways were not created overnight, and when they were created, construction first started in Missouri, not Los Angeles or New York. We need to think of high-speed rail the same way.

Moving forward though, the High-Speed Rail Authority needs to quell the anger and confusion about the project that is spreading across the state, and replace it with the appropriate sense of urgency and excitement that comes with a game-changing project of this type.

This can only happen if the authority better explains the nuances and complexities of high-speed rail to the public and gets buy-in for the overall strategy to bring the project to fruition over the next decade. Included in that should be a firm commitment that the next segment will connect two major California metro areas.

We cannot forget why 53 percent of Californians statewide voted to support and allocate funds for high-speed rail. This project will re-establish our leadership across the nation and around the globe. And it also won’t hurt to provide an environmentally sound alternative to the country’s busiest air route and take nearly 70 million auto trips off the road every year — which is what the statewide high-speed rail network is projected to do.

Above all, we should not let the concerns over this first phase of the project kill high-speed rail in California altogether. As the saying goes, we can’t make perfect the enemy of the good.

Building a project of this size and scope was never going to be easy and there were always going to be difficult choices and bumps in the road.

How we deal with those challenges over the long haul is what will ultimately get high-speed rail built.

This is a marathon, not a sprint.

Read the story…

12.16.10

San Francisco Chronicle: California poised to enter carbon-trading market

Today could be seen as the biggest day yet for California’s climate change law, assuming, as expected, the state Air Resources Board signs off on the rules to implement it.

It will also be a big day for Aaron Singer, CEO of San Francisco startup Pacific Carbon Exchange, which is engaging in an enterprise thought dead in the water not so long ago: carbon trading.

“It’s the official starting gun for California and for Western regional carbon markets,” Singer said. “It means we get to make this business a growing reality.”

Central to the law, which goes into effect in 2012, is a “cap and trade” system designed to limit the amount of carbon from the state’s 500 largest emitters – mostly power plants, energy companies and heavy industry.

Companies emitting less than their state-mandated limit can trade their unused allowance – also known as carbon credits, or offsets – with companies that may be seeking to emit more than their mandated share.

“This is a significant milestone,” said Josh Margolis, CEO of Cantor CO2e, a San Francisco offshoot of New York’s Cantor Fitzgerald, referring to the board’s expected action. “In the trading world, it’s been a decadelong anticipation.”

With the Bay Area Council serving as the firm’s incubator, Singer has been working on its trading infrastructure for the past two years and is in the process of obtaining the certifications and accreditations from the U.S. Commodity and Futures Exchange Commission.

In the meantime, PCarbX, as it is known, plans to begin some futures and options trading next year, pending a full rollout when the bell officially rings in January 2012.

Read the story…

12.20.10

Sacramento Business Journal: California’s clean-tech industry faces increasing competition

Should California fail to produce clean-tech companies that aggressively compete in domestic and global markets, other nations that are adopting policies and providing financial support for the clean-tech sector will fill the void, costing California jobs and economic growth, according to a Bay Area Council Economic Institute report released Tuesday.

California’s success as a leader in energy and climate policy and cutting-edge clean-energy technology development needs to be seen in a global context, according to the report.

According to the institute, a public-private partnership of business, labor, government and higher education, California attracted more than $1 billion in clean-tech investment in the second quarter, accounting for 70 percent of U.S. clean-tech investment and 50 percent of global investment in the sector.

But the bar is being set by Germany, a global leader in solar and wind, and China, which has emerged as a major global producer of solar, wind, battery and other clean-tech products.

China is now the word’s leading supplier of solar panels, accounting for 30 percent of world production, and is tied with the United States for installed renewable energy capacity but is growing its capacity three times faster.

Read the story…

12.15.10

Press Release: NEW ECONOMIC ANALYSIS SAYS CALIFORNIA’S CLEAN TECH LEADERSHIP AT RISK

California continues to hold an edge over China and other countries as the world’s innovation leader for clean energy technology, but will fall behind if state leaders falter in their pursuit of forward-looking energy and climate policies, according to a report released today by the Bay Area Council Economic Institute.

According to the analysis conducted by the Institute, a public-private partnership of business, labor, government, and higher education, California has attracted 70 percent of U.S. investment in clean tech and 50 percent of global investment. In the second quarter of 2010 alone, clean tech investment totaled $1 billion. The state, says the study, also leads the nation in clean tech jobs.

But China, as well as Germany and an array of other countries, are poised to overtake California if the state retreats on implementation of its pioneering clean energy and clean air standard, AB 32, low carbon fuel standards, and its Renewable Energy Portfolio Standard (RPS).

Other countries lead the U.S. and California in the production and sale of renewable energy equipment, and China is investing heavily in clean tech deployment. California’s challenge is to both sustain and grow its edge in venture investment and technology innovation, and capture the downstream jobs that result.

“With a strong strategy of our own to deploy clean energy, we can remain competitive with countries like China and Germany,” says R. Sean Randolph, President & CEO of the Bay Area Council Economic Institute and author of the report. “If we fail, the state’s leadership and thousands of current and future jobs are at risk.”

According to the analysis, the reason for California’s strong position is its long-term policy direction, tremendous technology research and development capacity, and the ability to create and sustain new businesses.

“California has an entrepreneurial culture; we are better than anyone else at taking an innovative idea and turning it into a profit: from research to development to deployment,” says Randolph. “Our state has a long history of global leadership in emerging sectors, attracting venture capital investment, growing the number of new businesses, creating jobs and maintaining the state’s strong economic standing. California has the highest proportion of clean tech jobs of any U.S. state; we need to continue that momentum with aggressive policies that nurture this fast-growing industry.”

“California has become the international leader in creating clean tech jobs and businesses, but that leadership is currently being threatened by China and even Germany,” said Governor Arnold Schwarzenegger.  “As this study points out, to ensure that California remains at the forefront of this sector, we must continue to encourage the growth of the clean tech industry or we run the risk of other countries taking the lead in the marketplace.”

PDF Press Release
Download the Report