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Can we learn anything from California?

Monday, May 22, 2017 - Posted by Rich Miller

* Fritz Kaegi writes in Crain’s about how Illinois could learn from California, particularly since Gov. Rauner often invokes Silicon Valley as a model for jump-starting this state

•​ Healthy universities are crucial. Stanford University Dean Fred Terman is acknowledged as the father of Silicon Valley. He brought in research funds, gathered leading academic talent, and encouraged professors to engage in business. In Illinois, the last two years of unreliable state university funding have driven out professors and applicants. High school counselors advise Illinoisans look elsewhere, driving record application levels in neighboring states. Smaller state universities face a negative spiral of lower applications, higher tuition, and credit downgrades.

• Noncompete clauses in employment contracts hurt talent acquisition and retention. In California, firms cannot limit employees’ freedom to work at competitors, giving it a leg up on the states that enforce noncompetition agreements. In Illinois, workers can be forced to the sidelines for years before they can compete with their former employers, reducing mobility and entrepreneurship. Facebook’s Mark Zuckerburg would have never been able to immediately hire Sheryl Sandberg and her team from Google in 2008 if they were based in Illinois. Illinois should extend the path-breaking Illinois Freedom to Work Act sponsored by Senators Patricia Van Pelt and Jacqueline Collins, which banned noncompetes for low-wage workers, to all Illinoisans.

• Business needs to embrace the new. In California, defying large corporations is part of the entrepreneurial ethic. We need more of that here. Too many are wary of stepping on the toes of grandees, whose deference has not been earned. All but two of the top 50 publicly traded Illinois companies, as measured by market capitalization, were founded more than 25 years ago (well done, salvage part vendor LKQ and trailer park operator Equity LifeStyle!). Only 13 of the 100 members of the Civic Committee of the Commercial Club are founders of their respective companies, and 11 of these are financial companies. Meanwhile, Google, Facebook, Netflix, Salesforce and Tesla—all less than 20 years old—are now worth more than all Illinois public companies combined. Instead of getting policy ideas from executives who climbed the corporate ladder at companies created by others long ago, maybe we should listen to different people?

California has plenty of problems and we have many homegrown strengths. But we can learn from the example of its governor, Brown, who never badmouthed his own state even when fiscal times were tough and led his state to fiscal stability and entrepreneurial growth.

* Not only does Gov. Rauner often badmouth his own state, he at times seems to be cheerleading the exit from Illinois…


Not mentioned, of course, is that Indiana also has local income taxes.

…Adding… From comments…

Not mentioned, of course, is that Bruce Rauner supports taxing those home repairs.

Not mentioned, of course, is that Bruce Rauner’s cuts to higher education mean it will cost you more to attend college in Illinois.

Not mentioned, of course, is that you might use the $2,500 to pay off debt, but the state’s debt is more than $130 billion and climbing faster under Bruce Rauner.

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