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Kotkin Presentation La Future

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Access a provocative presentation by renowned author and futurist Joel Kotkin about restoring the economic competitiveness of Los Angeles and California. This presentation was made during the 12th ...

Access a provocative presentation by renowned author and futurist Joel Kotkin about restoring the economic competitiveness of Los Angeles and California. This presentation was made during the 12th Annual SoCalBio Conference held on November 4, 2010 at the J W Marriott of L.A. Live. See: http://www.socalbio.org/SoCalBio_2010/Kotkin_Presentation.pdf

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    Kotkin Presentation La Future Kotkin Presentation La Future Presentation Transcript

    • Can Los Angeles be saved? Presentation to the 12th Annual SoCalBio Conference by Joel Kotkin, Distinguished Presidential Fellow in Urban Futures, Chapman University Los Angeles November 4, 2010
    • “Japan is replacing America as the world’s strongest economic power. It is in everyone’s interest that the transition goes smoothly.” - Expert Testimony to Congress, 1986Photo: urbangarden
    • Europe’s Decline as Asia Grows
    • North America hasgood fundamentals• U.S. has healthier long- term demographics than most competitors• U.S. only advanced country with large, growing population• We still have a significant resource, energy, land and water base• But will LA be part of an American resurgence?
    • The Great Recession in California• Too Much Regulation and Taxation driving out productive industry, leaving only the very high and low end• Lack of Balanced Approach that seeks to accommodate economic, social and environmental concerns• California now home to four of the nation’s ten largest concentrations of poor people
    • Is This Southern California’s Future?
    • Or is this?
    • Where Are We Headed? • The big issue nationally and in California is jobs • California: a consistent under-performer • Migration goes to areas that are affordable and have jobs • Can LA be the center of an American Multiracial Superpower • Back to Basics Key to Success
    • Projected Jobs Deficit 22.8 Million 19.8 Million Jobs JobsU.S. Chamber of Commerce, New America Foundation ReporUniversity of Kentucky Study
    • Broader Measure of Unemployment Includes marginally attached, discouraged, and involuntary part time workers Source: Bureau of Labor Statistic New America Foundation Chart
    • 2000 - 2010 Employment Growth in 10 Largest Metropolitan Areas Houston 12.0%Washington, DC 11.2% Dallas 4.2% Miami 1.3% Atlanta -1.0% New York -1.5% Philadelphia -1.9% Boston -4.2% Los Angeles -5.6% Q2 2000-Q2 2010 US Bureau of Labor Statistics Current Employment Statistics Chicago -7.5%
    • High Tech Shifts Growth in Science, Technology, Engineering, and Mathematics Jobs, 2002-2009North Dakota 31% Wyoming 24% Nevada 23% Utah 23% Virginia 20% Alaska 19% Hawaii 18% New Mexico 16% Texas 16% Washington 16% South… 15%
    • Middle Class Job Growth, 2002-2009 Utah 16% Nevada 15% Wyoming 15% Hawaii 14% Texas 14% North Dakota 13% Alaska 12% Arizona 12% New Mexico 12% Washington 12% Idaho 11% Florida 10% Maryland 10% Montana 10% Oklahoma 10% Georgia 9% Colorado 8%District of Columbia 8% New Hampshire 8% South Dakota 8% Virginia 8%
    • 10.0 11.0 12.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 1939 1942 1945 1948 1951 1954 1957 1960 1963 1966 1969 1972 1975California 1978 1981 1984 1987 1990 1993 Share of United States Non-Farm Jobs 1996 1999 2002 2005 2008
    • Californias Share of U.S. Per-capita Personal Income130.0125.0120.0115.0110.0105.0100.0 95.0 90.0 1948 1954 1960 1966 1972 1978 1984 1990 1996 2002 2008
    • thousands of jobs Job Gains/Losses: 1990 to 2000800700600500400300200100 0
    • thousands of jobs Job Gains/Losses: 2000 to 2010400300200100 0-100-200-300-400-500-600
    • Washington D.C.Thousands of U.S. Jobs Lost Philadelphia Los Angeles New York Houston Chicago Atlanta Detroit Boston Dallas150100 50 0 -50-100-150-200-250 U.S. Manufacturing Job Losses Due to Region from 1990 to Now
    • 10.0 12.0 14.0 0.0 2.0 4.0 6.0 8.0 Jan-90 Dec-90 Seasonally Adjusted Nov-91 Jan 1990 to July 2010 Oct-92 Sep-93 Aug-94 Jul-95Los Angeles Jun-96 May-97 Apr-98 Mar-99New York Feb-00 Jan-01 Dec-01 Nov-02Chicago Oct-03 Unemployment Rates Sep-04 Aug-05 Jul-06Boston Jun-07 May-08 Apr-09 Mar-10
    • Percent above the U.S. Jan 2007 to July 2010 Unemployment Rate Gaps Seasonally Adjusted3.02.01.00.0-1.0-2.0-3.0-4.0-5.0 Jan-07 Jan-09 Jan-08 Jan-10 Jul-09 Jul-07 Jul-08 Jul-10 Mar-07 Mar-09 Mar-08 Mar-10 May-07 May-09 May-08 May-10 Nov-08 Nov-09 Nov-07 Sep-09 Sep-07 Sep-08 Los Angeles Washington D.C. Philadelphia Houston
    • Declustering: The New Demography • Nationwide people heading to smaller towns and cities • Shift to opportunity regions • Social trends strongly pro- suburban • US Population growth will increase interest “flyover country”
    • Domestic Migration -46 -63 -81 -92 -97 -99 -120-151 -151 -143 -160 -215 -256 -249 -265 -313 -389 -384 -4341991 1993 1995 1997 1999 2001 2003 2005 2007 2009 Center for Economic Research and Forecasting California - (thousands of persons)
    • Net Domestic Migration Rate Annual Average, 2001-2009 Phoenix 15.9 Riverside 14.2 Atlanta 9.5 Dallas 5.9 Houston 5.0 Seattle 1.4 Minneapolis -0.8 Cincinnati -1.0 Philadelphia -2.1Washington, DC -2.3 San Diego -4.8 Boston -5.8 Miami -5.8 Chicago -6.5 Detroit -9.0 San Francisco -9.2 New York -11.4 Los Angeles -11.7 Praxis Strategy Group analysis of U.S. Census Population Estimates
    • Middle Class Job Growth, 2002-2009 Utah 16% Nevada 15% Wyoming 15% Hawaii 14% Texas 14% North Dakota 13% Alaska 12% Arizona 12% New Mexico 12% Washington 12% Idaho 11% Florida 10% Maryland 10% Montana 10% Oklahoma 10% Georgia 9% Colorado 8%District of Columbia 8% New Hampshire 8% South Dakota 8% Virginia 8%
    • Cost of Tax System on Small Business and Entrepreneurship#1. District of Columbia#2. New Jersey#3. Minnesota#4. California#5. New York#6. Maine#7. Iowa#8. Vermont#9. Oregon#10. MassachusettsSource: Business Tax Index 2010, Small Business and Entrepreneurship Council
    • Where’s the Hope?• Growing role of immigrant entrepreneurship• Pattern of multi-polar job regions can be built on in an intelligent manner• Restoring traditions of infrastructure spending and attention to growth, particularly in industry, trade, science and information
    • Immigration Is Driving American Demography The Foreign-Born Population is at an All Time High Largest 7-Year Immigrant Influx in U.S. HistoryForeign-Born Population (in Millions)Percent of Total PopulationSource: U.S. Census Bureau, 2000 - Center for Immigration Studies, 27 2007
    • The Millennial Generation is the Most Diverse in American History Percent of U.S. Population That Is African American, Hispanic, Asian Pacific Islander, American Indian, and Other; By Age – December 2006  Echo Boomers  Generation X  Baby Boomers  Pre-Baby Boomers Current Population Survey, U.S. Census Bureau, Dec. 2006
    • A Majority of Immigrants Now Reside In The Suburbs U.S. Census Bureau, 2007 American Community Survey
    • California is Home To.... 12% of U.S. 30% of 1990s Population Immigration 34% of Hispanic 40% of Asian Population PopulationSource: Bill Frey, demographer, US Census
    • Ethnic Purchasing Power Continues To Soar Spending Power by Ethnic Groups (in Billions) 1990, 2000, 2008, with 2013 projections $318.1 $590.2 Black $913.1 $1,239.5 $211.9 $489.5Hispanic $951.0 $1,386.2 $116.5 $268.9 Asian $509.1 $752.3 1990 2000 2008 2013 Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (2008)
    • If the U.S. ethnic purchasing power was represented separately, it wouldbe the 6th largest national economy in the world Gross Product Comparisons, 2003 (in Billions) World United States $10,882 rank 1 Japan $4,326 2 Germany $2,401 3 United Kingdom $1,795 4 France $1,748 5 U.S. Ethnic $1,685 (6) Italy $1,466 6 China $1,410 7 Source: World Bank Indicators database, World Bank, September 2004 and Selig Center for Economic Growth, University of Georgia “The Multicultural Economy 2003”
    • Self Employment Rate, 2006 Foreign Born Native Born 10.4% 8.5% 8.3%8.0% 6.9% 5.8% 5.7% 4.8% Total Los Angeles Co Orange Co Riverside
    • Immigrants and the EconomyBetween 1990 and Even in Corporate2005 immigrants America:started one quarter Fourteen of the 2007of all venture- Fortune 100 CEOsbacked companies were immigrantsBrin, Google Yang, Yahoo Grove, Intel Kholsa & Bechtolsheim, Sun Microsystems
    • Shifting Ethnicity of Labor Share of Labor Force by Race/Ethnicity 71.6% 2000 2050 50.1% 23.7% 11.6% 11.4% 13.4% 12.8% 5.3%White non-hispanic Hispanic Black Asian and other U.S. Bureau of Labor Statistics
    • A More Tolerant Population Approve of interracial dating... 95% 45% Ages 18 - 29 Over age 64 Gallup Poll
    • Millennials rival Boomers Population in Millions 81.6 81.0 57.3Millennials (Age 12 - 30) Gen X (Age 31 - 44) Boomers (Age 45 - 64) U.S. Census Population Projections, 2008
    • Millennials Entering Middle Age U.S. Population Age 30-39Millions 47 46 45 44 43 42 41 40 2000 2005 2010 2015 2020 2025 U.S. Census Population Projections, 2008
    • Redefining Sustainability Social EnvironmentalEconomic
    • The Archipelago of Villages:Towards “Smart Sprawl” • Housing near jobs • Emphasis on families • Strong role for village shopping streets and markets • Provision of open space around the village core and housing estates- • Solving the problem of “sprawl” within the Sprawl
    • Southern California: A Vision of a New (Sub)Urban Paradise“Los Angeles will retain the flowers and orchards and lawns, the invigorating free air from the ocean, the bright sunshine and the elbow room. It will not be congested like the older cities, for the transportation lines built in advance of the demands, have made it possible to get far out in the midst of orchards and fields for homemaking.” Editor of the Los Angeles Express in 1905
    • The Key to a Smart Regional Strategy This above all: to thine own self be true William Shakespeare
    • Rethinking the Future: Back to Basics • Regional economies need to produce real wealth or become irrelevant • The key remains creating jobs and strong middle class neighborhoods with high degree of livability • Culture comes after commerce not the other way around
    • Arts and Culture: Cause or Result?• Great Cultural Centers generally rest upon commercial success• Venice, Florence, Amsterdam, London, New York, Los Angeles all became cultural centers after developing an expanding economy and strong middle class• Patrons of arts, not the public, key to development of cultural institutions from Macenas to the Medici, Carnegie and the Rockefellers of the 20th Century to today’s multi- billionaires
    • Beyond elitism: JaneJacobs on the proper role of an urban economy“A metropolitan economy, if it is working well, is constantlytransforming many poor people into middle class people ...greenhorns into competent citizens... Cities don’t lure the middle class, they create it”
    • The Biggest Challenge: The Issue of Class • Growth of poorly educated newcomers and youngsters poses a unique problem, particularly with the end of the property boom • High drop-out rates in high schools can guarantee the rise of an underclass • Economic development needs to focus on upward mobility — not “luring” the middle class, but creating one”
    • Poverty Rates19.018.017.016.015.014.013.012.011.010.0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 United States California
    • Change in percent share of Groups from Change in Income Groups 1999 to 2007 1999 to 200712.010.0 8.0 6.0 4.0 2.0 0.0-2.0-4.0-6.0-8.0 Less than $35,000 $35,000 to $74,999 $75,000 and up California Texas
    • California’s Wealthiest Taxpayers Nearly Doubled Their Share of Adjusted Gross Income Share of Income (Top 1% of Taxpayers) 1993 13.8 % 2007 25.2 %Source: California Budget Project / Franchise Tax Board
    • CA Capital Outlay Share of Total ExpendituresU.S. Census Bureau25.020.015.010.0 5.0 0.0
    • California Back to Basics• In 1960 20 percent of state Budget went to infrastructure• Today roughly 5percent• California schools, roads, ports, water and power once pre- eminent, now fading• Government needs to encourage business, not ignore or harass• Solution: A return to basics oriented government The Good Brown: Pat Brown
    • Education Is a Key Part of the Upward Mobility Engine Median weekly Unemployment rate Education attained earnings in in 2005 2005 (Dollars) (Percent) Some high-school, no diploma 409 7.6 High-school graduate 583 4.7 Some college, no degree 653 4.2 Associate degree 699 3.3 Bachelors degree 937 2.6 Masters degree 1,129 2.1 Professional degree 1,370 1.1 Doctoral degree $1,421 1.6Source: Bureau of Labor Statistics, U.S. Department of Labor
    • America and LA Need A Better Plan forInvesting In People Higher Workforce Education: Training: $22 billion in $3.5 billion in federal funds for federal funds for 50 million jobs 70 million jobs Source: National Skills Coalition
    • Looking Ahead: North America and Southern California in 2050• Employ infrastructure to support a dispersed, flexible workforce• Understand and accommodate middle/working class aspirations• Focus on “greening” suburbs and how people prefer to live• Immigrants are our future --- positive or negative?• We need to get back to basics to revive LA’s entrepreneurial economy
    • JOELKOTKIN.COMA vivid snapshot of America in2050 focusing on the evolution ofthe more intimate units ofAmerican society—families,towns, neighborhoods, industries.It is upon the success or failure ofthese communities that theAmerican future rests.
    • Questions and Comment