A Step Ahead: Gavin Newsom

Hi, everyone. This is Kish Rajan, Chief Evangelist at CALinnovates, and along with our Executive Director, Mike Montgomery, we welcome you to the new CALinnovates podcast where we’ll be sitting down with elected officials and policy advocates and other thought leaders to discuss issues of critical innovation, technology, and public policy matters that face California and the country. We’ll be talking to guests of all kinds and we’ll be broadcasting this regularly and we hope that you’ll join us for this important series of discussions about the future of our state and our country.

This time around, we’re fortunate to be joined by the 49th Lieutenant Governor of the State of California, Gavin Newsom. Before his time as Lieutenant Governor, Gavin served as the two-term mayor of San Francisco, and before that on the San Francisco Board of Supervisors. Throughout his career, Gavin has been a passionate advocate and leader in areas of innovation and technology. Look no further than the San Francisco city government where you see a tremendous commitment to open data, open government, and utilization of technologies of all kinds to improve the quality of services that come from the city. We had a chance to sit down with Lieutenant Governor Newsom to talk about issues of innovation and technology to California and to the world.

Lieutenant Governor Gavin Newsom, we are so grateful that you’re joining us. Thanks for joining us.

Happy to be here. Good to be here.

Yeah, that’s really great. We’re doing this podcast via CALinnovates and we’re talking about the importance of the innovation economy in general. You, throughout your career, going back to your time on the Board of Supervisors and Mayor in San Francisco, certainly your time as Lieutenant Governor, both in California and nationally you’ve talked a lot about the importance of the innovation economy.

Yeah.

Let’s talk about why has that been so important to you, and how are we doing?

Innovation, obviously historically, has always mattered and innovation comes in many shapes and forms, but obviously now we’re dealing with some of the most disruptive innovation and technology. Things really came to the fore for me when I was sitting with the head of the San Francisco Chronicle, who was run at the time by the Hearst Group, and he was asked about the future of the newspaper business, and he said, “We got this,” basically. This was in the early part of 2000. He says, “We’re not concerned about technology. We’re going to be okay.” A guy in the audience said, “Well, hold on. What about that guy named Craig.” And the gentleman who was asked said, “Craig, who?” And someone screamed out, “That guy with the list.” And so I said, “Oh, Craigslist. Craig Newmark.” And, you know what? What an eye-opening moment to punctuate the change.

Craig comes along with a list and guts the newspaper industry overnight by taking out it’s cash flow by reducing the classified sections to a few paragraphs, not throngs of paper. I’ll never forget being Mayor. It was great to be Mayor of San Francisco and I’m there and, “Ladies and gentleman, Steve Jobs,” and he comes up and he says, “I got this thing called iTunes.” And none of us even knew what hit us. I walked outside and literally around the corner was that beautiful Virgin mega store. I was there with Richard Branson when it opened up. I waited in line to get a picture with him. I was so excited. One of my business heroes. Well, that thing went out of business in a couple years.

Right.

There were a thousand other versions of stores that literally didn’t know what hit them. So, you go through this and you start to appreciate the disruptive nature of technology and innovation today. I’ll just end with this, one final example, I got my political… I literally made my name in politics, not intentionally, just unintentionally, on taxi cab issues. I was desperate to reform the taxi cab industry in San Francisco and I failed miserably. Then all of a sudden, a guy comes along with an app and literally guts the entire taxi cab industry, Travis and Uber, overnight. So, the whole point is paralysis contrasted by rebirth. Something big is happening here. Innovation, particularly technological innovation, is the thrust of that change.

There’s no question about it. You think about, and that taxi example is such a brilliant example, you’ve served in government, so have I. We try to be reformers inside of government. We try to use the tools and the power of government to create change and create new trajectories, right? And there’s some examples of success, but nothing that can mirror how innovation and private industry with that ingenuity is creating change, be it in transportation, be it in energy, be it in communications, and hopefully other ways, right? Education and other things where we clearly need to make changes if we’re going to be able to extend the benefits of this new era to all people.

You’ve got it. Government is just, I was saying earlier in our conversation we were having, it’s on a collision course with the future. Government in California is on the leading cutting edge of 1973. And I say that quite literally. The DMV’s plumbing, the architecture of the entire Department of Motor Vehicles, was conceived around 1973, 1974, and there’s been efforts to upgrade it, but the reality is we’ve just patched on top of all these old legacy systems. The fact is, it’s not just technology. Innovation is also about culture. It’s also about business processes and what happens with technology, you’ve looked at it historically, even with the innovation that was electricity, electricity didn’t change the world overnight. But, 10, 20 years later, what changed along with electricity were the way people did business using this technology and that’s when the real disruption came. It doesn’t surprise me that the personal computer as we know it today was the Time Man of the Year or Thing of the Year in 1980. And about two decades later, we started to see some real disruption, 2000, and now we’re starting to see disruption at a whole new level as all these new technologies are being built off the internet.

I just think you’ve got to tighten your seatbelt, because we ain’t seen nothing yet, and something big is happening. There’s a lot of whitewater change.

You’re one of the more clear-thinking and articulate spokespersons for the change that is happening and the change that we’re really still at the beginning of. There’s no question.

Yep.

But we are seeing already in the fundamentals of California, what’s so troubling about this change, the downside of it, is that it’s creating tremendous economic dislocation, right? So at the exact same time, you know this better than anybody, that California is the sixth largest economy in the world, incredible vibrancy, amazing wealth that’s being created, nearly one in four Californians lives in poverty today. Children, when you talk about populations of color, those numbers are higher.

Yep.

How do you feel and how do we deal with the fact that this economy is moving so rapidly away from so many of our fellow Californians?

I’m profoundly worried about California, but I’ll tell you, I think you need to look at it more globally as well. I’m more worried about developing nations. Their competitive strength was all the off-shoring. Competitive strength was low labor costs. You’re seeing dramatic impacts on manufacturing in places like China now where they can’t afford that labor and they’re starting to bring labor-saving automation, which could have a huge impact on wages and huge impact on their work force. In so many respects, we are better prepared to be resilient in this environment than a lot of other parts of the planet. So, from a global perspective, and the fact is, you talk about a $2.44 trillion economy now bigger than France, the sixth largest in the world, you can’t talk about California’s economy without looking at it in the context of the backdrop of the global economy. In this low growth or slow growth environment, it’s going to dramatically impact California. Again, this notion of interdependence is profoundly important. There’s something big going on globally, not just here locally, despite the fact that so much of the innovation is emanating out of California.

That said, unless we radically retool our thinking around workforce development and up-skilling, we are going to see these stats get worse and worse, and it’s not 30-year trends. I fear five, six, seven, eight years. These things are pronounced. It’s a punctuation point as the world goes mobile, local, social, cloud, crowd, in real time and we talk about exponential nature of technology, the convergence of technology, when machine learning meets big data, etc. That’s when the real disruption will start to take shape and it’s going to impact a lot of folks, particularly middle skill folks disproportionately. Anything that gets repeated, gets replaced in this economy.

Well, there’s no question. Final question, and we appreciate your time, is as the change happens… And you’re right, that middle skill, middle tier, so much of California’s economy still has been dependent. It is still organized around those legacy industrial sectors.

Yep.

How do we summon the political will and capacity to make the kinds of changes, be it in education, transportation, infrastructure, all the big things that you’ve talked so beautifully about, around what has made California great to date, how do we create the political change that’s necessary to ensure that we modernize our approach to create the opportunities that we want in our era?

There’s the old adage, “If you don’t like the answer, ask a better question.” We’ve got to start asking better questions. The question again that I think every single one of us have the obligation to wake up and ask and then answer is what world are we living in? What are the trend lines that define this world? How can we take advantage of those trend lines? That’s fundamental. That means we have to change the conversation we’re having in Sacramento, change the conversation we’re having at home. Because at the end of the day, the guy or gal on the white horse is not going to come along and “save the day” for you. If you’re looking for someone else to solve this, you’re in real trouble. More and more is on you now than ever. It’s the power of one, right?

We have remarkable… It’s just amplified individual, the ability for someone not to just think globally, but act globally for good or for evil, obviously. So you have the duality of that. But the reality is, all of us now have to recognize we live in a world where average is over and that means you’re like a carton of milk with a sell-by date. It may be great that you got that degree in 1996, but it’s not particularly relevant in 2026. So, it’s about life-long learning. It’s about on-demand education. It’s about completely re-imagining the 21st Century education system that, frankly, as important as preschool is, as important as prenatal care is and front-loading education, we now have to start having a conversation about back-loading education, not just K-14, not just a Bachelor’s degree, but truly constantly never-ending updating of skills in your 40s and your 50s and your 60s, and particularly in a world where we’re aging and graying, living longer, and needing to work longer and longer.

Well, California’s future, I’m sure you agree, it’s still bright.

Yes. Despite everything we said. Unbelievably bright.

Well, listen, it’s nothing but opportunity, but it’s going to take leadership. Lieutenant Governor Gavin Newsom, we appreciate your leadership and we absolutely appreciate your time. Thanks for sharing.

Good to be here. Thanks so much.

Thank you.

Thank you.

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A Step Ahead: Gary Johnson

Hi everyone, this is Kish Rajan, Chief Evangelist at CALinnovates. Along with our Executive Director, Mike Montgomery, we welcome you to the new CALinnovates podcast, where we’ll be sitting down with elected officials and policy advocates, and other thought leaders, to discuss issues of critical innovation, technology and public policy matters that face California and the country. We’ll be talking to guests of all kinds and we’ll be broadcasting this regularly. We hope that you’ll join us for this important series of discussions about the future of our state and our country.

We’re so pleased this time to be joined by Libertarian party candidate for President, former New Mexico Governor, Gary Johnson.

Governor Johnson, thanks for being here, really appreciate it.

Gary Johnson: Oh thank you. Yeah.

It’s nice to see you.

Great opportunity.

Yeah. Welcome to California.

Yeah.

You’re one of millions that’ll visit here this year, for business or leisure travel, and many of those folks avail themselves of sharing economy services. Uber, for ride share, Airbnb, home share, and the like. Are you a user and what do you think about the tremendous growth of that new space in our economy these days?

I have said repeatedly, I think that this is the model of the future. Uber everything. Eliminating the middle man. Allowing for you as the provider of goods and services, to directly give that to the end user, eliminating the middle man, so the end user saves money and you make more money as the provider. Airbnb, in Santa Fe right now, they have restricted the use of Airbnb. My partner and I Kate, I think we have this great opportunity to rent our place out. I built my dream home north of Taos, but we have this great opportunity to rent out our place, and they’re restricting Airbnb from existing.

That’s not unusual.

It’s not unusual.

In the sharing economy generally, there’s a lot of reaction on the parts of state and local governments that have tried to hinder these models, or try to find ways to force them into their regulatory box.

Can they not see the fact, that me, that I get a little bit of extra income that I’m going to be spending in my community or paying in tax? It’s just so short sighted.

I think it’s a great point in terms of the owners of those properties to be able to continue to derive some additional income, or you know, monetizing those. But it’s also the users. I think particularly, it’s not exclusively this, but certainly younger consumers. Their perception of getting a ride or staying some place has fundamentally changed. One wonders, now in your candidacy, one wonders whether politics and policy is catching up with where the generational attitudes and cultures are headed.

Well, if I’m elected President, just count on me to use that bully pulpit to point out how good these things are and stop with the restriction. Stop with the restriction. If there are, and I am sure that there are initiatives that are going to be launched to restrict them federally.

There’s no doubt. You can count on it. At CALinnovates, we actually have a poll in the field right talking directly to millennials and to voters, and asking them about attitudes, and trying to match up where the gaps may be, and sort of where the policy conversation is headed. We’ll talk more about that for sure.

It’s exciting.

A big topic of security versus privacy. Of course, sadly, we’ve seen so many tragic events that have happened, criminal events, shootings, terrible things that have happened, and sadly, it seems that the scale of these is growing. Given how lethal these attacks are, and the opportunity to be able to potentially interdict those things to prevent them, shouldn’t the government be able to take greater action in that regard?

There is a process, and it’s due process. It’s presenting evidence to a judge and actually getting warrants to be able accomplish exactly what you’re talking about. When the NSA has the ability to collect metadata, and I am saying something here that I really have no appreciation for whatsoever, because what does metadata of 110 million Verizon users really amount to? To me, that is wrong. There has not been one shred of evidence to come forward that anything has been prevented, thwarted, or discovered as a result of this massive collection of all of our personal information.

Let me switch gears. Something that’s happened that’s been so stunning globally has been the Brexit vote, that decision by the voters. There’s a lot of dimensions to that and a lot of reasons I suppose about why that happened. One element that’s been talked a lot about is immigration and anxiety, in Britain, around greater immigration. Some would say that that’s a present conversation, certainly in the Presidential campaign here in the United States as well. Of course in California, in the Bay Area, in this thriving innovation economy, it seems that a big asset, one of the great contributors to the success here, has been that we’re a melting pot of immigrants that are contributing their talents. I’m curious as to your feelings about immigration, and the implications to the innovation economy.

Running for President of the United States, we should embrace immigration. We’re a country of immigrants. All innovation has stemmed from innovation. We should make this as easy as possible for anybody that wants to come into this country and work to be able to get a work visa. Get government out of the quota, out of establishing quotas. There’ll either be jobs or there won’t be jobs. A work visa should entail a background check. We don’t want criminals in this country, and it should include a social security card, so that applicable taxes get paid, but come on. We’re a country of immigrants, a hard working people that are coming here to this country to achieve what any American hopes to achieve.

It certainly seems again that this cuts a lot on age lines. I mentioned that we’re in the field with the poll, looking at attitudes. A lot of data in the Brexit vote, the analysis of that vote, showed very big divides between younger voters and older voters, about their feelings on immigration, multiculturalism, and technology. I wonder if you see those similar divides emerging here and what we can do to try to bridge those.

Well, yes I do, this is protectionist. We are at a crossroads in my opinion, and I don’t think we should go down the road of being protectionists. I think we’re going to find ourselves in a recession. The Brexit vote for me was a vote against the crooning capitalism of Europe, that’s the way I looked at it. It really puts in doubt any Euro based investment, for years to come, and it makes the United States really a safe haven for dollars, I think, for years to come. I’m talking now about worldwide investment and what should be viewed as the safe haven. Unless of course we screw it up by becoming isolationists ourselves.

Final question. Technology is permeating all aspects of our lives. It certainly is changing the way the political campaigns take place. It’s been some time since the first time you ran for office in New Mexico. I’m wondering if you, what have you noticed in your observations about how much campaigning has changed, how much politics has changed, because of the innovations and the advent of new technologies?

What’s exciting for me is I might get elected President. If I do, I will have spent less money than any political candidate in modern history made possible by social media.

I have to tell you, I’ve seen the latest web ad that you have that’s out on social media right now. You and your running mate, Governor Weld. I must say, it’s very creative. It’s clearly catching on because I know it’s been viewed by millions of people, so that’s certainly an indication of how quickly you can have an impact with the right kind of content online.

Right. Doesn’t cost anything other than the production and the relative production costs are very low. Anyway, it’s exciting.

Well, Libertarian candidate for President, Governor Gary Johnson. Thanks so much for being with us on INNOVATE2016 and good luck the rest of the way.

Thank you. Thank you.

Thank you very much.

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