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Insights on Challenges to Californiaís Global Competitiveness

California faces a number of significant and complex challenges as it prepares to compete globally over the next 10 years. Time Structures, Inc., President Dr. Gus Koehler, identified some of these challenges, particularly those involving workforce training, in a February 5, 2013 presentation to the California Legislatureís Assembly Committee on Jobs, Economic Development and the Economy.

Dr. Koehler described how a local economic problem faced by a legislatorís constituents could be caused by critical changes already underway in the global economic system. Policy options were identified that legislators could take that would do minimal harm, have only a low short-term risk but would move constituents in a favorable economic direction within a policy makerís reelection time line.

Dr. Koehler explained how complex multiple global interactions are likely to continue to produce unexpected and unpredictable local economic storms both in California and around the globe. For example, last yearís flooding in Thailand crippled its hard drive manufacturing capacity, slowing Californiaís computer manufacturing industry. The destruction of Japanís Fukijima reactor derailed Japanese car manufacturing which hurt US Japanese car sales and parts availability. Climate change will continue to produce similar, unpredictable interruptions. Thought will have to be given to how to make supply chains more resilient without increasing costs. Bringing key parts manufacturers back to California is one approach.

Californiaís GDP per-capita growth is slowing at the end of a century-long period of productivity improvements including the introduction of electricity, better transportation, and a higher level of educational attainment. Exacerbated by the Great Recession, increasing income inequality in California over the past decade reduced retail purchases making it harder to recover or to sustain continued economic growth. At the same time, developing countries are taking advantage of the very productivity improvements that California benefited from as well as new ones including the application of information technology to supply chain management. Global developments like this are producing a new global middle class with accompanying large retail markets. The result is to shift growth in world markets to India, China and other countries and away from Europe and the US. These new markets are predicted to expand faster than the trained global workforce that is needed to produce desired products. Efforts to produce or attract a trained workforce will be a major competitive driver in these countries and in California.

Presentations such as this have been made to, among others, the California Community Colleges, Chancellorís Office, California Workforce Investment Boards, California Redevelopment Associationís Board of Directors, California Student Financial Aid Commission, California Council on Science and Technology, California Association for Economic Development, and the various local economic development organizations. To make arrangements to have this presentation given to your group or to have one created to meet your particular needs contact:

Gus Koehler, Ph.D., President
Time Structures, Inc.
916-564-8683 or Gus@TimeStructures.com

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