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One out of every five

But here is another statistic that is even more striking: one out of every four. That’s how many of America’s high-tech jobs were based in California just 20 years ago. That’s a 35% decline in the last two decades.

What is happening to California’s high-tech economy?

During the last 20 years we have seen our state’s economic environment change. The same state that once inspired two graduate students to invent Google in their dorm room now is watching as many of its largest technology companies outsource jobs to other states and even other countries. And why not? China, for example, has tripled its R&D investment since 1998.

The time has come to acknowledge that the battle for leadership of the technology economy is underway. And California is no longer winning it.

The time has come for a new strategy to help our state once again become innovators in the high-tech sector.

And the time has come for CALinnovates.

A few weeks ago, a group of industry experts, thought leaders, tech innovators, policy makers and consumers joined together to form CALinnovates, a non-partisan organization to promote innovation, create new jobs, spur investment and support tech-friendly policies.

Our issue is simple: we believe California’s economy and California’s future will be determined by our innovation.

Our challenge is great: we believe we must reverse years of decline in California’s high-tech sector.

And our strategy is straightforward: we want to make California the leader in innovation again.

The state that gave us Google, Apple and Hewlett Packard can surely give us new ideas, new initiatives and new innovation. But we need to get started; and we need to get started now.

A recent survey that we commissioned shows that while 96% of Californians believe technology and innovation are an important part of our state’s economy, 80% of those same Californians believe our state is on the wrong track. And they are right.

So how can we turn this around? How can we reverse the brain drain? How can we again make California the innovation leader of our country and our world?

At CALinnovates, we want to begin the conversation about how to create innovation in California. We want to be a resource for policy makers in California and beyond as they grapple with policy that affects the innovation economy. From our dynamic new media platforms that feature California’s innovators and tech leaders, to meetings and briefings with California’s chief policy makers – CALinnovates not only provides a medium for companies to network, but helps to connect the ideas of today for an economy of tomorrow.

And as part of that effort, we are launching a new app so that Californians can follow the 2010 elections in general and technology issues specifically.

Want to know how your legislator is voting on innovation issues? Get the CALinnovates app.

Want to see what innovation issues are being discussed in the campaign? Get the CALinnovates app.

Want to be involved in politics and make sure policy makers are paying attention to innovation issues? Get the CALinnovates app.

Let’s encourage our political leaders to have a serious debate about innovation. Let’s find out what they believe and why. And let’s keep the focus on this crucial issue.

And remember: we’re Californians. We invented the technology revolution. Now we’re going to re-invent it.

Hollywood vs. Pirates

In honor of the Oscars, we at CALinnovates thought we’d go all Hollywood on you and bring attention to the policy making emanating out of Lalaland.

In January, the Screen Actor’s Guild (SAG) joined the American Federation of Television and Radio Artists (AFTRA), Directors Guild of America (DGA), International Alliance of Theatrical Stage Employees, Moving Picture Technicians, Artists and Allied Crafts of the United States, Its Territories and Canada (IATSE) and issued a response to the FCC’s request for input on it’s proposed Net Neutrality regs.  Hollywood is concerned with pirates – and not the Johnny Depp type of pirate (as clearly we can’t get enough of that) – but the web based variety.

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Gates @ TED on Energy

What, there’s no crisis you say?  Mr. Gates and the jar of domesticated fireflies that accompanied him to TED would disagree as he pointed out that all the world’s batteries could only hold 10 minutes worth of its energy needs.  Working with his former CTO, Nathan Myhrvold, Gates is creating nuclear technology that entails an underground reactor that uses, in part, spent fuel from other reactors so as to make it an even cleaner means of energy.

So what does this all mean for California?  Will Gates weigh in as California grapples with the current assault on AB 32?  Let’s hope he and other visionaries do – so that California can remain the leader in new economy jobs as it continues to prove to the rest of the country that renewable energy is not only environmentally responsible but also economically viable – case in point: CALinnovates member NRG West which owns and operates the largest photovoltaic solar farm in the country in Blythe, CA.

We’re proud that California is blazing the trail in renewable energy.  And it’s not just us.  In the statewide survey we fielded in late January nearly 80% of voters said that they supported legislation that would promote renewable development including the extension of tax benefits.  That’s a tall order with a $20 billion deficit.  But it is California, where the sun shines and the wind blows regardless of who is elected governor.

Mass. Migration

When proclaiming the end of the ‘California Dream’ there are two basic areas that naysayers point to: taxes/high cost of living and environmental regulation. Let’s look at taxes first. It’s true, California has a high sales tax but then again, so do Washington, Texas, and Nevada (another state often cited as a supposed destination for fleeing California businesses). The last time I checked, Seattle had a couple successful technology businesses to its credit. What about corporate taxes you say? Well, if you thought our corporate income tax rate was bad, you obviously, haven’t done business in Minnesota, Rhode Island, or yes, even Massachusetts, lately. Each of those states has higher corporate income tax rates than California.

As far as environmental regulation goes, I would invest in and protect our unparalleled natural resources rather than let polluters run amuck any day of the week. And if some companies are going to head out of state to avoid environmental regulations, well, they aren’t going to Massachusetts. Massachusetts Sen. John Kerry and California Sen. Barbara Boxer are currently co-sponsors of a recent and wide-reaching climate bill. California and Massachusetts have been national leaders in environmental regulation in terms of both legislation and state funding and will probably continue to be less-than-ideal destinations for environmentally irresponsible companies.

Of course, California does come with a high cost of living. But that’s not unfathomable for an extremely populous state with rich human capital (not to mention our unpolluted natural wonders).

None of this is to say that I believe we can afford to be cavalier about retaining a thriving technology industry. We absolutely can’t. California is lucky enough to be a highly desirable location to live and work in and we need to ensure that tech businesses can always find the best and brightest minds here in the Golden State. That’s one reason California’s universities are so crucial to the future of California’s technology industry.

For the time being, we need to be vigilant in ensuring that the choices California makes contour to the needs and desires of tech businesses (those in our state currently and those considering relocating here). But instead of lamenting the imminent end of California’s tech industry, let’s celebrate the reasons we’re a technology leader in the first place and get to work, ensuring that they never change.

Three areas California DOES need to take action:

1. The cost of energy.
2. Further economic incentives for new and existing tech businesses (especially where energy/green tech is concerned).
3. Maintaining our leading colleges and universities that are educating and training the next generation of innovators.

Attracting Technology to California

A little more than two weeks ago, Governor Schwarzenegger and Cobalt Technologies held a press conference about technology in California billed as: important to ‘the state’s future economic vitality’. At the event, Schwarzenegger applauded Cobalt, which commercializes biobutanol as the type of business that was beneficial environmentally as well as economically. The Governor explained how companies like Cobalt were going to spur economic development and create jobs in our financially troubled state (for the record, Cobalt plans on building an even larger facility here in CA in the next three years).

So, one way the Governor hopes to attract businesses like Cobalt to California is with tax incentives. Just this week Schwarzenegger proposed sales tax exemption for the purchase of green tech manufacturing equipment.  In addition to tax incentives, the Governor and other officials have pushed funding and partnerships in recent years, that are designed to boost the state’s leading tech universities’ most innovating programs- a move the state hopes will propel research and attract the nation’s brightest, young minds in fields like cleantech, biotech, and nanotech.

California is already home to 1 in 5 technology jobs in the U.S., but it’s unclear if lawmakers and officials seem to understand the importance of retaining that distinction.  Making California an economically friendly environment for tech businesses, while educating the next generation of tech innovators, seem to be two strategies that will ensure California remains a leader in technology and innovation.

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