Conference Presentation, Panel, Fireside Chat
Bettering California's Business Climate
- The Milken Institute has increased its annual output to approximately 50 research pieces, hosted 155 events, and registered over 20,000 participants this year, culminating in an invitation-only California Summit to advance specific policy agendas.
- California's economy ranks as the 8th largest in the world; if treated as an independent nation, it holds the potential to rise to the 6th or 7th largest position depending on global currency fluctuations.
- Bioscience is identified as a primary driver of future economic growth, with California leading the world in tech transfer and patents, hosting three of the top seven patent regions globally.
- Six of the world's top 20 bioscience universities are located in California, including eight of the top 20 US graduate schools in the field, positioning the state as a unique hub for 21st-century leadership in health, agriculture, and environmental science.
- Demographic shifts indicate that by the end of the current year, Latinos will surpass people of European descent as California's largest ethnic group, with a 33% growth rate in the Latino population over the last 13 years compared to a near 7% decrease in the European population.
- Scott Minard, CIO of Guggenheim Asset Management, argues that California should leverage its upgraded credit rating (AA2, A+) to issue up to $100 billion in infrastructure bonds to finance a massive expansion of the state's infrastructure.
- Minard projects that a $100 billion infrastructure investment could yield a present value equivalent to $20–30 billion in purchasing power by the time the debt is retired, with the program potentially paying for itself through increased tax revenues.
- Senator Kevin de León noted that California has reduced its structural "wall of debt" from $30 billion in 2011 to an estimated $11 billion, with a projection to eliminate the remaining deficit by 2017 if fiscal discipline is maintained.
- De León highlighted that California's district 22 is the most ethnically diverse district on Earth, containing major concentrations of Korean, Chinese, Filipino, Armenian, and Latin American communities.
- Sharon K. Robinson presented data showing that while women-led firms in California have grown at five times the rate of male-led firms, women access only one-twenty-seventh of the venture capital received by male counterparts despite holding 58% of science degrees.
- Research cited by Robinson indicates that white men are 64% more likely to secure funding than women presenting identical business plans, a disparity that remains even when controlling for variables like physical attractiveness.
- Robinson advocated for SCR 62, a state resolution aimed at increasing women on corporate boards, citing studies from Credit Suisse, McKinsey, and Dow Jones that correlate gender diversity on boards with enhanced corporate performance.
- Troy Carter, manager of Lady Gaga's career and an investor in companies like Uber and Spotify, stated that his firm's portfolio is now 20% founded by women, reflecting a strategic effort to diversify funding for underrepresented entrepreneurs.
- Carter emphasized that regulatory friction often hinders progress, noting that in Los Angeles, infrastructure projects like adding highway lanes are less efficient than disruptive technologies like ride-sharing that provide jobs and improve quality of life.
- Senator de León led the rewrite of California's film and television tax credit legislation, increasing the annual allocation from $200 million to $1.5 billion starting in 2015 to replace a lottery-based system with a transparent, verification-based model.
- The new film incentive legislation was designed with specific quantifiable metrics to verify job creation and economic output, ensuring a measurable return on investment for California taxpayers.
- Minard suggested a long-term strategy to reduce California's marginal tax rates to reverse the exodus of individuals and businesses, citing Toyota's recent relocation as a warning sign of the state's current competitiveness issues.
- Troy Carter warned that California risks following Detroit's trajectory as a once-dominant industry hub if it fails to retain talent, noting that 41% of China's leading entrepreneurs express a desire to live in California but remain deterred by immigration policies.
- Carter pointed to the success of a $50,000 investment in Jim Allison's immunology research as evidence of California's ability to generate life-saving medical breakthroughs that offer high returns in both human health and economic value.
- Minard contrasted California's current planning challenges with the long-term strategic execution of nations like China, which can rapidly deploy capital and infrastructure over 5-to-10-year horizons without the regulatory hurdles faced by US states.
- The panel concluded with a consensus that California must focus on incentivizing investment and expanding the economic pie rather than increasing the state's share of existing revenue, particularly in the bioscience and media technology sectors.