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Location California: Taking Charge of Energy, Manufacturing, Higher Education, and Entrepreneurship

California charts its destiny by acting like its own nation.

Apr/May 08
When it comes to vitality and innovation, size has its benefits. The state of California is at or near the top of a wide range of economic and demographic statistics, so dominant that it is in many ways more than just a state. Its size, along with an inventive, can-do attitude on the part of its people and its leaders, set a tone of problem-solving and forward-thinking.

"The governor refers to California as a nation-state because of the sheer geographic size, the population, the seventh-largest economy in the world," says Brian McGowan, deputy secretary for economic development and commerce. "We really are like a country, made up of lots of regions" - each with its own economic makeup, cost structures and competitive advantages.

Acting On Its Own

The past few years have provided a number of examples of how the ability to act as a "nation-state" has put California in charge of its own destiny, and put it in a position to lead the way for others. Consider the state's infrastructure initiative. Fixing infrastructure has been at the forefront of national public discussion since the interstate highway bridge collapse in Minnesota last year, but the state was already making big infrastructure plans before that. "We're not waiting for the federal government to do it for us," says McGowan.

About $20 billion is to be spent on transportation infrastructure, upgrading public infrastructure and reducing congestion. Projects that impact the movement of goods are to be addressed as well, says McGowan, followed by affordable-housing projects. "We're taking the challenge head-on and will continue to be a global leader," he says.

For another example, consider how the state approached the sometimes controversial issue of stem cell research. For several years, the nation has debated the merits and ethics of expanding medical research in areas where stem cell-linked advances might be possible. Other countries, meanwhile, have moved ahead with their research programs. California decided to act more like a country than a state.

Voters in 2004 passed a $3 billion R&D initiative aimed at making California a global leader in stem cell research. The approval paved the way for creation of the California Institute for Regenerative Medicine, or CIRM, which is charged with distributing the funds. Through February, CIRM had approved 156 research grants totaling almost $260 million, making it the world's largest source of funding for human embryonic stem cell research. In May, CIRM's Major Facilities Grants program expects to approve another $262 million in funding for projects likely to generate nearly a half-billion dollars in matching funding commitments.

The stem cell initiative seems to be having its intended effect - allowing California to chart its own course much like an independent country would. "The research facilities established by the CIRM Major Facility Grants will provide a safe haven from federal government restrictions for stem cell scientists to conduct research," predicts Alan Trounson, president of the CIRM. "That will lead to therapies and cures for millions of patients who suffer from chronic disease and injury."

CIRM also has provided grants to M.D. and Ph.D. scientists, hoping to persuade them to base their work in California. "A key objective of these grants is to build a strong, statewide foundation of extraordinary young scientists and clinicians whose faculty commitment is to stem cell research," says Robert Klein, chairperson of the governing board of the CIRM. "This is an opportunity to build the intellectual infrastructure that will carry this critical new field of research forward in California's leading universities, medical schools, and research institutes."

Stem cell research is just one area of medical R&D fueling California's life sciences sector. McGowan points out that just about everybody wants a piece of this lucrative pie, but California is fortunate to have three distinct regions that are busy with life sciences activity: the areas surrounding San Francisco, San Diego, and Los Angeles/Orange County.

Take climate change as another example. California has long been at the forefront when it comes to putting lower-emitting vehicles on the roads. Now, the state is busy meeting and signing climate-protecting agreements with international representatives from such places as Mexico, South America, the United Kingdom, and Canada, as well as other U.S. states. "We recognize it as something that needs to be done and something we can't wait to do," says McGowan. One recent example is the memorandum of understanding signed by Governor Arnold Schwarzenegger and Mexican President Felipe Calderón, vowing cooperation in environmental protection, conservation of natural resources, and the fight against climate change.

Another example is the recently announced solar installation project on ProLogis rooftops in Fontana. It will be the largest such installation in the country, able to power 162,000 typical California homes with green energy. As Schwarzenegger noted in making the announcement in March, "If commercial buildings statewide partnered with utilities to put this solar technology on their rooftops, it would set off a huge wave of renewable energy growth." That's the strategy behind the state's "Million Solar Roofs Plan" unveiled in 2006, an incentive program aimed at encouraging placement of solar panels on at least a million rooftops, which would create some 3,000 megawatts of green energy and cut greenhouse gases by 3 million tons, which would be like taking a million cars off the road.

Still another recent example is the state's response to economic troubles in housing and credit. State leaders have met directly with lending-industry representatives to come up with ways to mitigate the ill effects of the subprime crisis on California neighborhoods and citizens. "There are some innovative approaches," says McGowan.

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