NBLC Leading the Way …

NBLC thinks about leadership a lot.  Especially when there seems to be such a need for leadership on all fronts.  Here are some ideas that might help improve all of our leadership capabilities:

  1. Never Whine:  Constant complaining is not a characteristic of leaders. “The habit follows those who lack success and feel powerless to improve things for themselves.  By their very act of whining, people are admitting that they lack the competence, character, communication skills, or commitment to improve things.  Not a good message to send.,” says Dianne Booher (How to act like a leader – Holy Kaw! 2/9/2012).
  2. Make Others Successful:  No one likes self-serving career chasers.  “The people you are leading can make or break you. If you focus on helping make those you’re leading a success, you will be associated with successful people.  It will be a successful expression of your leadership and add longevity to it,” says William Powell, (The Leadership Advisor, 6/28/11).
  3. Finally, ask more questions than you answer: “With the high velocity of change in the world, it is impossible to have answers to all the important questions. Much more important is a deep curiosity about the world and the ability to frame the right questions in profound ways. The world’s toughest problems cannot be solved by you or any one organization. A leader’s role will be to bring the right people together to address the challenging issues you raise. Research demonstrates that the biggest mistakes result from decisions made by people without deep consideration of thoughtful questions,” says John Coleman and Bill George (Five Resolutions for Aspiring Leaders, 12/30/11).

Leaders of today and tomorrow are continuous improvement advocates.  We applaud your efforts!

SMART Train Not Derailed

The petition drive to repeal SMART’s funding has officially failed. The efforts of the anti-SMART folks came up short when after many months of signature collecting they could not reach the needed amount of signatures.  The wisdom of the voters in approving the SMART ballot measure in 2008, and not repealing it now, is a testament to the voters’ commitment to new jobs being created and green transportation alternatives being provided, especially when the freeway will never be widened beyond current plans.

SMART’s new leadership has turned the project in the right direction, providing clear updates to the voters, putting SMART’s house in order and taking advantage of the economic times to get the best deals on construction contracts and bond sales. Since all of these improvements haven’t been able to please the anti-SMART folks, they must have their own political agenda that prizes disruption and delay, refusing to work to improve the project, and offering no other alternatives than trying to kill the project.

Luckily, there is no doubt that there is a train in our future.  This small anti-SMART minority cannot override the majority of the voters in the North Bay.  They have already wasted taxpayer funds and now threaten to continue wasting more taxpayer dollars by pressing for another repeal drive. The voters have spoken but the anti –SMART folks don’t want to listen to the nearly 70% of the voters who support SMART, nor to the voters that refused to sign their misguided petitions.  How many times do the voters have to speak before they get it?

Demographic changes dictate future: 65+ age group will dominate for decades

In “After Seven Billion,” by Neil Howe (1/15/12 New Geography) it is debunked that the 21st century will see the “population bomb” that was predicted by Malthus and Paul Ehrlich.  Turns out the trends that they based their predictions on were temporary and that birthrates are declining.  Birthrates are falling in the U.S. but even more dramatically in Europe, Asia, and the former Soviet Union.  Japan is experiencing “depopulation” as it is now in its fourth year of negative population growth.  Howe says that the global birth dearth is “that the traditional motivations for childbearing are no longer as strong in modernizing societies.  Children used to be an economic asset to their parents, …now children are an avoidable and increasingly expensive liability.”  This zero growth trend will greatly affect the global economy including creating labor shortages, reduced consumer demand, less risk taking and entrepreneurism, and less immigration.  On the bright side, businesses that lead on providing products and services to older consumers who are living longer will prosper, especially if they “understand how tomorrow’s generation of seniors will have different needs, means and preferences than seniors in the past.”  Grasping that the 65+ population “will be the fastest growing demographic group in most countries for decades to come” is critical.  Says Howe, “People who understand how global aging and generational change intersect will do quite well in the world that’s coming, whether they are politicians, inventors of new technology, or creators of culture.”

Running an Experiment on the Economy

Excerpt from “Tectonic Shifts” in Employment – Information technology is reducing the need for certain jobs faster than new ones are being created.

Technology Review published by MIT – January/February 2012

By David Talbot

New research is showing that advances in workplace automation are being deployed at a faster pace than ever, making it more difficult for workers to adapt and wreaking havoc on the middle class: the clerks, accountants, and production-line workers whose tasks can increasingly be mastered by software and robots. “Do I think we will have permanently high unemployment as a consequence of technology? No,” says Peter Diamond, the MIT economist who won a 2010 Nobel Prize for his work on market imperfections, including those that affect employment.

“What’s different now is that the nature of jobs going away has changed. Communication and computer abilities mean that the type of jobs affected have moved up the income distribution.”

More evidence that technology has reduced the number of good jobs can be found in a working paper by David Autor, an economist at MIT, and David Dorn, an economist at the Center for Monetary and Financial Studies in Madrid. They too point to the crucial years of 2000–2005. Job growth happened mainly at the ends of the spectrum: in lower-paying positions, in areas such as personal care, cleaning services, and security, and in higher-end professional positions for technicians, managers, and the like. For laborers, administrative assistants, production workers, and sales representatives, the job market didn’t grow as fast—or even shrank. Subsequent research showed that things got worse after 2007. During the recession, nearly all the nation’s job losses were in those middle categories—the positions easiest to replace, fully or in part, by technology.

Dramatic shifts have happened before. In 1800, 90 percent of Americans were employed in agriculture. The figure was down to 41 percent by 1900 and stands at 2 percent today. People work, instead, in new industries that were unimaginable in the early 19th century. Such a transformation could happen again. Today’s information technologies, even as they may do short-term harm to some kinds of employees, are clearly a boon to entrepreneurs, who now have cheaper and more powerful tools at their disposal than at any other time in history. As jobs are lost, Brynjolfsson says, “we will be running an experiment on the economy to see if entrepreneurs invent new ways to be productive equally quickly.” As examples, he points to eBay and Amazon Marketplace, which together allow hundreds of thousands of people to make their living hawking items to customers around the world.

The problem, he says, is that not enough people are sufficiently educated or technologically savvy to exploit such rapid advances and develop as-yet-unimagined entrepreneurial niches. He and McAfee conclude their book by arguing that the same technologies now making industry far more productive should be applied to updating and improving the educational system. (In one promising example they cite, 58,000 people went online to take an artificial-intelligence class offered by Stanford University.)

Peter Diamond says that one of the most important things the government can do for employment is to take care of basics, like infrastructure and education. “As long as we have so many idle resources, this is the time when it’s advantageous—and socially less expensive—to engage in public investment,” he says. Eventually, he believes, the economy will adapt and things will work out, once again. “Jobs have been changing and moving around—within the country, out of the country—for a very long time,” he says. “There will be other kinds of jobs that still require people.”

Dutra Asphalt Plant Approval Upheld by Court

NBLC is very pleased that the Dutra Asphalt Plant approval has been upheld by Judge Chocteau.  The Judge dismissed all of the opponent’s claims recognizing that the Dutra asphalt plant meets planning and environmental requirements as was detailed by Sonoma County Counsel and Planning staff during the approval process.  This is a vindication for the Sonoma County Board of Supervisors and a well deserved ruling in favor of the Dutra project which leap through hoops to gain the approval. It is a victory for the North Bay as we will now see more jobs created, more infrastructure projects underway, and lower costs to the taxpayers because the asphalt plant is nearby.  Congratulations also go to Les Perry of Perry, Johnson, Anderson, Miller & Moscowitz LLP for representing the Dutras in court and winning the case.

As a neighbor of the Dutra asphalt plant, NBLC welcomes them to the neighborhood!

SMART Completes $191 Million in Bond Financing to Fund Construction

NBLC is pleased that Sonoma Marin Area Rail Transit (SMART) was very successful in selling the bonds needed to fund the train and pathway project.

SMART was able to achieve its bonds sales at very favorable rates, despite efforts to derail the project. The successful sale takes advantage of the historic lows for financing and allows SMART to also reap the rewards of starting construction when rates are very competitive.

“We are very encouraged that SMART was able to do so well in the bond market and save the taxpayers’ money. This sale brings us much closer to getting 900 new construction jobs and injecting almost $200 million into the local economy.

This is the best present the North Bay could have received for the holidays!” said Cynthia Murray, NBLC president and CEO. Murray co-chaired the 2008 ballot measure campaign which led to the voters passing the SMART sales tax.

NBLC commissioned a poll in October of this year to gauge voter support for the SMART project. At the time, Murray said that she hoped that the poll results, which showed strong and enduring support for the SMART project, would cause opponents to cease their attempts. “Selling the bonds at the right time for the right rates is just one more affirmation of SMART carrying out what the voters wanted in 2008 and still want today – passenger trains and multi-purpose pathway in the North Bay.”

Poll Shows Little Voter Appeal to Repeal SMART

Three years after their original vote on Measure Q, the sales tax ballot measure passed in 2008, an overwhelming majority of voters want the SMART project to continue to move forward. Voters show little desire to stop the SMART train project according to a poll commissioned by North Bay Leadership Council (NBLC) The poll, completed in late October, found that voters in Sonoma and Marin County strongly support construction of the project as presently planned from San Rafael to Santa Rosa. Six of 10 voters (58%) opposed the repeal of Measure Q.

Despite a perceived rocky start for SMART due to the recession and management issues, voters have held firm in their commitment to the project for the same reasons they supported Measure Q. “It is clear from the poll results, that given these tough economic times, North Bay voters are clamoring for the 900 jobs SMART will create by year’s end followed by many more jobs in the coming years. Voters seek to reap the twin benefits of stimulating the local economy and getting reduced construction and materials costs,” said Cynthia Murray, president and CEO of NBLC. Murray continued, “Voters also want green transportation alternatives to Highway 101 offered by the train and pathway, and aren’t buying the argument that if SMART goes away that there will be any another alternative.”
Proponents of repealing Measure Q remain approximately the same percentage (32%) as those who did not vote for it in 2008. Then and now, the anti-SMART proponents have failed to undermine voters’ convictions that the SMART project will create much-needed jobs, boost the economy, relieve congestion, and reduce greenhouse gas emissions. The poll confirms that the repeal effort is misguided and cannot succeed.

Said Murray, “We hope that these compelling poll results lead the anti-SMART group to drop its efforts to stop the train. The train opponents have already cost Marin and Sonoma taxpayers millions of dollars bond sale penalties. Now they want to make taxpayers pay even more for an unnecessary, expensive do-over election that voters already decided in 2008,” Murray concluded.

The poll, by Dresner Wickers Barber Sanders, fielded 501 randomly selected, registered voters in the SMART district (Marin and Sonoma Counties) between October 27-30. Given the sample size, the poll results have a margin of error of +/- 4.37% at a .95 confidence level.

The Young Entrepreneurs Who Will Save the California Economy

As set out over the past few years at Fox and Hounds, there are big reasons to be concerned about our employment future in California. We have built vast entitlement systems that are far removed from jobs. The marches of technology and globalization continue to permanently eliminate jobs. Our retail and financial services sectors are undergoing major downsizing, and even sectors like health care that have seen constant employment growth are now stalled.

Now it is true that the history of California employment over the past fifty years suggests a very strong resilience. Technology has eliminated jobs throughout this period, only to create a greater number of new occupations, not even envisioned at times of job loss. Whether this past resilience will continue, though, remains to be seen.

For me, the most encouraging dynamic today for California’s employment future is the entrepreneurism and ambition of the generation of Californians in their twenties and thirties. Far more than my generation of Baby Boomers, this is a generation in California that is market oriented, pragmatic rather than ideological and risk-taking.

I see their entrepreneurism and ambition at every turn, in my professional activities, volunteer activities, and in some ways most of all in my activities with one of our Bay Area universities, California State University East Bay (CSUEB).

Our young entrepreneurs in social media and internet commerce receive the greatest attention, but of course they are in all fields. Here are a few I’m now working with: two entrepreneurs in San Jose who are heading an effort to install solar panels in the rights of way of state highways; two young developers, based in Santa Monica, who are part of a team trying to build a new transit-oriented community in the City of Hercules; a human resources professional building an online job search business; two workers’ comp/payroll service experts building a professional employer organization. What unites all is a willingness to take up big economic issues of alternate energy, transportation, employment not through “policy analysis” or “policy advocacy” but through specific projects and business ventures.

In the nonprofit world, a Silicon Valley start-up veteran concerned with autism is starting a software testing business to employ adults on the autistic spectrum. A job training agency in San Francisco working with ex-offenders has started a security guard business, to help integrate ex-offenders into security guard employment.

Then there is our college population, as represented by our college students at CSUEB. I go to CSUEB once a week, and always come back upbeat about our state’s future. Many of the students at CSUEB come from our state’s working class and struggling lower middle class. They do not take for granted the opportunity in higher education, and are very focused on finding their place in the emerging job world . Though most are looking for steady decent-paying jobs, there is a streak of entrepreneurism. CSUEB, like the other universities in the California State University system, does the heavy lifting in California education, contributing particularly to our workforce of nurses, teachers, educators, IT administrators. In recent years, CSUEB has launched major initiatives to increase training in engineering and technology.

A few miles down the road from CSUEB, former UC Berkeley student leaders from the Baby Boomer generation, Oakland Mayor Jean Quan and her sidekick Dan Siegel last week continued to undermine Oakland businesses as they played out their communitarian fantasies. Who says today’s students don’t represent a better employment future.
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Speaking of entrepreneurship, from our colleagues, Chris Thornberg and Ben Wright of Beacon Economics comes the most recent data on new business incorporations in California.

2011 Number of Incorporations by Month
January  5,227
February  5,760
March  7,648
April  6,817
May  5,998
June  6,710
July  6,885
August  6,187

The most recent numbers on new business formation in California continue a trend that we’ve seen since 2008. Even while the economy has struggled, new businesses have been incorporated in California, at a substantial rate. Incorporations are only a part of the new business growth, but is an important indicator. Below are the most recent numbers from the state Department of Finance on new business incorporations for 2011. They are below the rates of 8,000-9,000 new business incorporations per month in 2007, but still show an active new business growth.

Michael Bernick, Former California Employment Development Department Director and Milken Institute Fellow

Historical Precedents Reason for Hope

A look back in time will provide not only context but hope for a better economy. Comparisons of the Great Recession with the Great Depression often lead to a concern that it took World War II to end that depression. As Christina D. Romer writes in “The Hope That Flows From History,” (New York Times August 11, 2011), “what is going to save us today?”

Romer answers that while the war speeded the recovery, the economy was “improving long before military spending increased. More fundamentally, the wrenching wartime experience provides a message of hope for our troubled economy today: we have the tools to deal with our problems, if only policy makers will use them.”

“Monetary expansion was very effective in the mid-1930s, even though nominal interest rates were near zero, as they are today,” say Romer. She takes heart that the Federal Reserve may be using its available tools more aggressively in the coming months as a lesson learned. Another lesson “is to beware of withdrawing policy support too soon. A switch to contractionary policy before the economy is fully recovered can cause the economy to decline again.” Romer points out that reducing the deficit more sharply in the near term could be a crucial mistake. She says, “The lesson here is that fiscal stimulus can help a depressed economy recover” as demonstrated in depression.

Looking at mismatch of skills and jobs then and now, Romer notes that “because nearly 10 million men of prime working age were drafted into the military, there was a huge skills gap between the jobs that needed to be done on the home front and the remaining workforce. Yet businesses and workers found a way to get the job done. Here the lesson is that demand is crucial – and that jobs don’t go unfilled for long.”

Romer’s last point is about the national debt. She says, “At the end of WWII, the ratio of debt to GDP hit 109% — one and half times as high as it is now. Yet this had no obvious adverse consequences for growth or our ability to borrow.” She calls for a bolder approach more like that taken in WWII to solve our economic malaise today. Romer says, “Unemployment of roughly 9% for 28 months and counting is a national emergency. We must fight it with the same passion and commitment we have brought to military emergencies in our past.”

The Good, the Bad and the Ugly!

Now that the legislative session is over, business is busy sorting out the good, the bad and the ugly.

The Good:  Governor Brown formalized his Office of Business and Economic Development. GO ED was established in April 2010 via executive order but this action ensures that California now has a permanent and highly visible single point of contact for economic development and job creation efforts. Governor Brown also signed into law a bill that, among other things, requires a standard economic impact analysis for major regulations at the beginning of the regulatory process.

The Bad:  Governor Brown vetoed a requirement that the state begin “performance-based budgeting,” forcing each state agency to provide lawmakers its goals, targeted outcomes and performance data. This bill was strongly supported by the business community.

The Ugly:  California’s revenue for September missed the state’s budget projection by $301.6 million, raising the prospect that spending cuts could be triggered early next year, the state controller said. “For better or worse, the potential for revenue shortfalls is precisely why the governor and Legislature included trigger cuts in this year’s state spending plan,” Controller John Chiang said in a statement. “September’s revenues alone do not guarantee that triggers will be pulled. But as the largest revenue month before December, these numbers do not paint a hopeful picture,” Chiang said. Revenue from the start of the current fiscal year in July through September is trailing budget estimates by $705.5 million, Chiang said. (“California’s September revenue misses target,” Reuters, Oct. 10, 2011)