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.
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

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