California lags the nation and its competitors on the percentage of new jobs created for the middle-class. The NCC has a plan for boosting the number of middle-class jobs and helping Californians get ahead.
California needs more middle-income jobs. The NCC has a 15-Point Plan for Economic Competitiveness
STRATEGY
1. Develop a comprehensive economic development strategy for California.
2. Identify and develop top high-opportunity industry sectors.
3. Set goals for small business growth focused on women, Latino, Black, Native American, Asian entrepreneurs.
4. Increase the State’s small business procurement goal from 25% to 50%.
RETENTION AND GROWTH
5. Double California’s economic development portfolio & budget
6. Secure federal/state infrastructure and CHIP semi-conductor funding
7. Provide higher incentives for technologies that are manufactured in California.
8. Nurture and retain large employers.
9. Align CA’s K-16 system with economic development goals.
CREATING A LEVEL PLAYING FIELD
10. Require state government comply with rules or mandates placed on business.
11. Streamline and modernize the regulatory system, including CEQA and PAGA.
12. Make California competitive with other states by reducing tax burden, cost of living, cost of energy and water and providing regulatory relief.
UNDERSTANDING IMPEDIMENTS TO GROWTH
13. Track and annually report the number of lawsuits filed under CEQA and PAGA.
14. Monitor job gains and losses by congressional and state legislative districts.
15. Surveys of businesses that relocate to California or leave to ascertain why.
For decades, California has focused on environmental sustainability and social equity but has not attached comparable importance to inclusive economic growth.
The Result Has Been:
• Regional economic inequality.
• Some of the worst income inequality in the nation.
• The highest rate of cost-adjusted poverty in the nation
Disproportionate Impacts To:
• People of color
• Inland communities
• Service providers, even in the most affluent communities
Meanwhile...
• Other states aggressively target California businesses
• Policies that drive economic growth outside of the state’s borders often run in direct opposition to the state’s climate goals
California is a nation-state – not one economy but a tapestry of very different regional economies. One size does not fit all. Economic strategy must be tailored to fit each region’s strengths.
• Governor Newsom’s Community Economic Revitalization Fund offers a promising first step toward creation of regional economic development strategies.
• The State needs a more robust capacity to partner with regional economic development organizations to develop goals, strategies and accountability metrics that ensure statewide competitiveness.
• The State needs a more robust capacity to partner with regional economic development organizations to develop goals, strategies and accountability metrics that ensure statewide competitiveness.
- Agricultural technology
- Creative industries, including movie and other content creation
- Life Sciences
- Managed health care
- Individual, Senior, and Family Services
- Professional and Technical Services
- Clean Energy Products & Services
- ManufacturingAutomotive
- Defense, aerospace, space and missile technology
- Computer hardware
- Software/AI
- Machining and fabrication
- Medical devices
- Logistics and Distribution
Small businesses are the backbone of California's economy, and NCC needs to actively support their growth and success.
NCC should encourage public-private partnerships that provide access to capital, training, and mentorship to help small businesses expand and create jobs, with a special focus on women, Latino, Black, Native American, and Asian entrepreneurs.
The State should increase the goal for small business procurement goal from 25% to 50%.
Additionally, NCC should promote policies that reduce regulatory burdens, streamline licensing and permitting processes, and provide tax incentives to support small business growth.
Option 1
Expand the scope and budget of the Go-Biz organization, remaining as part of the governor’s office.
Option 2
Create an Economic Development Corporation to work alongside GO-Biz, funded separately, to provide the personalized relationships with target companies to help them define how they can best take advantage of the state’s resources.
Option 3
Make GO-Biz a cabinet level agency with oversight responsibility for all state programs that help create, attract and retain jobs
Top Recommendation: Create a Public-Private Economic Development Corporation to work alongside Go-Biz
• This model is used by the most effective economic development states (#1 Utah) and nations (Singapore, Costa Rica). California is a nation-state – not one economy but a tapestry of very different regional economies. One size does not fit all.
• The State needs a more robust capacity to partner with regional economic development organizations.
• Regional economic goals, strategies and accountability metrics that collectively ensure statewide competitiveness.
• Seamless state-local coordination to attract, retain and grow medium-and-high-wage employment.
• Industry clusters that connect small companies (99% of all CA companies employ less than 50 employees), large companies (employ 50% of all CA workers), local education and workforce development programs.
• Governance: Independent public-private board includes representation from Go-Biz and local economic development corporations in all thirteen CERF regions.
• Funding: 80% from the state, 20% regional match.
Double the state economic development budget
• With sufficient resources, California could help regions throughout the state to fend off aggressive efforts to poach our companies to other states and retain employers.
• Patterned after a federal effort authorizing steep funding increases for certain federal research agencies deemed central to long-term U.S. economic competitiveness, this proposal would provide funding increases to targeted state programs supporting California’s economy and businesses.
• As the state of California is preparing for potential federal funding from Inflation Reduction Act and Infrastructure Investment and Jobs Act, it is vital that GO-Biz coordinate its efforts with private sector and industry leaders.
Mission of an expanded Economic Development Organization
• Make it a cabinet level agency with oversight responsibility for all state programs that help create, attract and retain jobs
• Providing oversight for economic development strategy, with particular emphasis on key industry sectors
• Ensuring that inclusive economic prosperity is taken into consideration on all state policy
• Helping to create an investment climate that provides inclusive prosperity opportunities for Californians in every region of the State
• Acting as an integrator of State government services to support business investors
• Proposing policy prescriptions that will enhance California’s economic competitiveness
• Providing leadership on California trade policy; and
• Providing a one-stop-shop
The semiconductor industry is critical to California's economy, but it is facing significant challenges due to supply chain disruptions and global competition.
To address these challenges, NCC needs to organize to secure at least $10 billion dollars in federal CHIP semi-conductor funding.
To recover market share, which has declined from 44% to less than 5%, California must reform CEQA, ensure a reliable supply of water and energy, and offer incentives to attract investors.
• California has long been a leader in green technology and clean energy. This foothold and expertise must be leveraged.
• California should provide higher incentives for companies that manufacture green technologies in state versus those manufactured elsewhere.
• Additionally, California should massively invest in research and development to further advance green technology and create new opportunities for California businesses
• Industry generally operates in clusters. Big businesses create demand for products and services that are often best met by local suppliers.
• California’s economic prosperity is heavily dependent on large businesses as customers for its ecosystem of small and medium sized entrepreneurial businesses
• California must address the root causes for the exodus of so many large companies.
Often state or local governments will pass new laws or regulations on businesses but do not apply those same rules to themselves.
In cases where a state or local government has comparable operations, it should seek to comply with laws it has applied to the business community. This will ensure that Government
works hand in hand with the business community to address societal needs.
CEQA is a critical environmental law, but it is ridiculously cumbersome and sabotages the approval process for manufacturing and infrastructure as well as key water supply and environmental projects.
CEQA also adds substantial cost and delay to housing production, making it difficult for employers to attract workers.
The Private Attorneys General Act (PAGA) has become a cottage industry for lawyers to extort settlements from companies. California can protect workers rights without making itself unattractive to investors.
Action on both fronts will substantially help California businesses and industries compete in a global economy.
Four key objectives that, if achieved, would serve to supercharge the California economy and distribute widespread opportunity throughout the state.
1. Conforming California’s capital gains tax with the federal government.
2. Reduce California’s cost of living in order to attract and retain workers.
3. Ensure that businesses have a reliable and affordable source energy and water.
4. Streamline and modernize California’s regulatory system (e.g. CEQA and PAGA) and allow more land zoning for industrial and commercial activity
• To ensure that our economic development strategies are working, we need to monitor job gains and losses by Congressional and state legislative districts.
• This will help us identify areas of success and failure and hold policymakers accountable in areas that need more attention.
• By tracking job gains and losses, we can adjust our strategies and investments to maximize economic growth and the production of middle-income jobs.
$180 billion over the next ten years are earmarked for California in federal /state funding for infrastructure projects in clean energy, roads, bridges, public transit, water storage and conveyance, and broadband.
The Governor’s 2023-24 budget cut timelines by more than three years, reduces approval documents by hundreds of thousands of pages, and saves hundreds of millions of dollars
These investments will generate more than 400,000 well-paying jobs.
To implement key economic development strategies, we need more active support and involvement of key state and federal policymakers, namely the Governor, the Congressional delegation, and the US Secretary of Commerce
They provide unique political will, resources, and expertise to help California achieve significant economic development, manufacturing and infrastructure goals
NCC’s 14-Point Economic Development Plan seeks to help California state government leaders focus on emerging businesses and industries- so these industries can thrive and create new well-paying job opportunities.
By working together and involving key policy makers and stakeholders , NCC hopes to set the pace for significant economic development gains and build a more prosperous future for all Californians