Ep. 2: Lieutenant Governor of California Gavin Newsom

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.


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.


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.


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.


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.


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.