In an event best described as a "tough love" view of California, speakers at the 4th annual State of the State Conference lauded the state's many strengths, but warned that problems - if unfixed - threaten its future.

From its high-tech workforce to its entrepreneurial spirit, California remains a global economic powerhouse, many agreed. And with some of the brightest minds in the world here, there was plenty of optimism that the state will overcome the downturn.

"This economic downturn is short term," said Tim Leiweke, President of Anschutz Entertainment Group and the conference's keynote speaker. "We are very bullish on the future. If you believe the glass is half full, and you're passionate about it, you can make things come alive."

Institute Chairman Michael Milken also took the optimistic view in his morning address, but agreed with others that improving California's K-12 education system is crucial to the state's future.

"The American dream is dependent on education," he said. "We must create opportunities for all in the state."

Others were more critical of the state's direction, pointing to such factors as the high cost of doing business in California, the need for more skilled workers and the lack of affordable housing.

Bill Simon, Jr., the Republican candidate for governor, cited the state's budget deficits, the ongoing power concerns and high taxes as problems that are dragging down the economy.

"Here in California, the state of our state is mixed," he said in his address. "It's mixed because there is so much good in California, and yet much that is worrisome."

Throughout the day, as more than 400 business and financial executives, government officials, economists and journalists who attended listened, speakers found solace in California's tremendous assets but concern about its many challenges.