Summary:What are the problems facing California today, and how will these problems bear out in the year 2020? Michael Milken asked his four panelists to describe what a specific challenge the state faces, and what it will look like a decade and a half from now. Each tackled an area related his area of expertise: finance, transportation infrastructure, urban design and health care.
Russell Goldsmith of City National Bank, outlined five major factors to consider in the California economy: 1) its sheer size (eighth in the world), 2) growth and globalization, 3) the need for a better business climate, 4) the need for better education with regard to the work force of the future, and 5) the need for more effective public/private partnership.
California is an economy of contradictions, he said, but one that is filled with growth opportunity. The top two venture capital regions in the country are Northern and Southern California, respectively. One full quarter of the Forbes 400 live in the state. But we are hemorrhaging our largest corporate employers. We have one the finest systems of higher education in the country, yet one of the worst primary and secondary school systems. There are approximately 700,000 small- to medium-sized businesses in California, but the costs of operating a business in the state are 20 percent to 25 percent higher than elsewhere, and in turn, businesses of this size have only a 50 percent survival rate. Goldsmith's recommendations were first to protect our most thriving industries — entertainment, the ports and the university system — and next, to demand a fair share of returns on taxes from Washington, to embrace diversity and to reduce regulation.
Ki Suh Park of Gruen Associates stated that in terms of infrastructure, environment, transportation, urban development and land use, our prospects for 2020 are grim indeed. By 2025, he said, the state's population is expected to have increased by approximately 10 million people, above our current 37 million. This will have massive implications for traffic — a problem that only 12 percent of people in the state trust the government to effectively rectify. Park explained this in terms of a reversal in California's historic development paradigm: Early on in the development of Southern California, in particular, as exemplified by railroad baron Henry Huntington, founder of the Red Line, transportation was designed first and foremost as a way to develop residential real estate. Now, however, the reverse is true, and transportation infrastructure has lagged behind the pace of residential development. Since 1975, for example, investment in highways has been flat, and state capital outlay in transportation has declined. Meanwhile, the use of individual transportation (cars) has skyrocketed as market pressures in the form of real estate prices dictate movement further away from the major economic centers of employment.
For lack of any real leadership in this area, Park said, "we are sleepwalking into the future." It is only a matter of time before this perpetual rush-hour bad dream becomes a full-blown commuter nightmare. If the peak oil theorists are correct and we fail to develop alternative fuels in the next four decades, the consequence will be devastating, he warned, and we simply cannot afford to wait for the pendulum to swing and for market forces to deliver some miracle power to maintain a lifestyle based on individual private transportation. Instead, state government must commit to a contingency plan for a possible future that does not depend upon individual automobile usage. Ultimately, this would require yet another reversal of our developmental paradigm and a return to planned building of infrastructure prior to residential development.
Renowned architect Frank Gehry provided an elegant vision of a future Los Angeles, emphasizing the importance of design and aesthetic in a functioning urban environment. Citing such examples as Vienna, Amsterdam and Ljubljana, Slovenia, Gehry explained the historical role of artists and designers in the construction of European urban centers and posed the question, "Would Athens be Athens without the Parthenon?" What if Los Angeles were to be redesigned with these same sensibilities, or even with those of his own Museo Guggenheim Bilbao, for that matter? What if the new Panama Canal expansion could be designed by I.M. Pei?
Moving away from the 19th-century European "downtown-centered" developmental model, Gehry suggested something altogether new for Los Angeles; speaking of his lifelong love affair with the richness and diversity of Wilshire Boulevard, Gehry proposed the development of the world's first linear city along the Wilshire corridor. Utilizing, as Park suggested, the existing transit system — but with the addition of a greenspace down the center of the Boulevard — Wilshire could become the perfect example of business and residential symbiosis, while remaining uniquely Angelino, with its vibrant cultural diversity.
Health care is expected to consume 20 percent of California's budget, but Patrick Soon-Shiong of Abraxis BioScience stated that such cost projections apply only if innovation is not accounted for – and radical innovation is what the state will need. Describing what he characterized the "unmet need" in our current treatment models, Soon-Shiong said it is time to shift treatment trends. At present, he explained, treatment of serious diseases, such as cancer, is limited to trial and error, which is often harmful and ineffective, and leaves the patient faced with the anguish of bewildering choices about further treatment. A new way of doing things is already here, he said; the challenge is to make it available for everyone.
A better approach would gather the latest technologies and the best minds worldwide into a "Bell Labs of health care," using DNA diagnostic tools, regenerative medicine and nanotechnologies. Market forces will lower the costs of high technology, which will in turn eventually lower health care costs. Just the use of an electronic medical-record database and the elimination of paper could potentially finance the project, he said.
By the time each panelist had had his full say, a hopeful vision of California in 2020 had emerged, a California of vertically integrated communities, instead of suburban sprawl, of effective and affordable health care integrated into these communities, of a Gehry-designed urban landscape, of improved education, technological innovation and greater employment, of ever-increasing diversity and a "changing face" – proving that our greatest asset, the people of California, can adapt and lead the way in dealing with what are ultimately global issues.
