California remains a state with more than its share of challenges, from budget deficits to high costs for business, but its huge store of talented workers, world-class universities and risk-taking entrepreneurs will overcome these woes and return the state to global leadership.

That was the consensus of business leaders, government officials and academic experts who spoke at the 5th annual California State of the State Conference.

The conference, attended by more than 500 state leaders in business, government, academia and public policy included a litany of issues that have become well-known to Californians:

  • The state's budget deficit and how to close it
  • High business costs, such as workers' compensation and electricity rates
  • A lack of affordable housing
  • Rising health-care costs
  • The need for better K-12 education

Panelists offered a wide variety of solutions for these issues, from making people more responsible for their health care (and its costs) to ideas on how business can take advantage of Asia's growing wealth.

With the state's economy growing again, panelists emphasized that California's leaders cannot afford to be complacent. They must work hard and aggressively to solve these problems, and to take advantage of the state's many strengths.

It was clear from both the remarks of panelists and polls taken of the audience throughout the day that California can meet these challenges, and that people remain optimistic about the state's future.

Institute Chairman Michael Milken, who gave the luncheon keynote speech, pointed to the fact that California's economy remains one of the largest in the world, and that its job losses, while difficult, have not been as bad as the nation as a whole in the past two years.

He pointed to the growth of such California companies as Intel, Amgen and Cisco and urged the audience not to forget "how far we've come" as a state.