Much to be thankful for

In a time marked by uncertainty and exaggeration, we need to take a hard look at our good fortune. We may actually like what we see.

In case you have not noticed, the daggers are out again. California in general, and Southern California in particular, always loom large in the national imagination. Writers and pundits simply will not leave well enough alone. Now that the national economic downturn has firmly taken hold, the superlatives are once again being hurled at California. Unable, this time, to single the State out - the way they did in the early 1990's-they bring us along for the ride. After all, this is the home of the Apocalypse.

The language used to describe us is often simplistic and predictable (a "freak show of a state" in the words of Bill Keller, writing in the New York Times this past Saturday). Between the vanished hopes of the dot coms in San Francisco and the supposed "ennui" of Hollywood, columnists and correspondents can rarely resist the pleasure of indulging in overblown metaphors and literary excess.

In a long piece where he asks rhetorically if anyone should care that California is supposedly in the doldrums, Keller says that the economy here "stinks." Now, it is comforting to note that in this we join the rest of the nation, where, if you have not noticed, things aren't hunky dory. But Keller is truly confounded by the fact that a majority of Californians think that the state is "moving in the right direction". Surely this cannot be sustainable, given the very real economic problems we face: a serious deficit, thousands of jobs lost in the aftermath of the dot bomb, a non-performing Pacific Rim and a formula-driven film industry that is supposedly devoid of creative ideas.

I forgive the thousands of Kellers around the country for their folly. I am sincere in my magnanimity. You see, they could not possibly know the extent of the devastation we faced in the early 1990's, particularly in Southern California. Well, they were aware of the events, but instead of understanding their peril and promise, they chose, predictably of course, to describe them in apocalyptic terms at the time. However, the fact that the experience of the early 90's has given way to an economic diversity - even robustness - cannot be allowed to stand in the way of breathless hyperbole.

Relative to that economic meltdown, why shouldn't Californians feel fortunate? Along the way, we've indulged some pretty crazy things, which we have all recognized and understood - the mania around Internet companies, the excesses of our stock-induced euphoria, the unsustainable business models we embraced, the list goes on. But this state, and this region in particular, are no strangers to reinvention. From the ashes of the dot com bubble will rise the continuing viability of the Web, which Californians did more to define than any other group of entrepreneurs anywhere. We are already witness to increased interest in "Web services" companies (formerly known as ASP's) to drive economic value within corporations, large and small, across networks and enterprises. Also, it seems clear that wireless adoption in the U.S. will not be led by consumers (as is the case in Europe, Korea or Japan) but will be marked by the need for efficiency in business. So, the plethora of failed wireless companies in California offering products and services to consumers has given way to a recognition of the importance of wireless solutions in manufacturing, inside corporations, again, across enterprises. In entertainment, a significant development is the migration of gaming companies to Southern California, seeking to drive product extensions for the filmed entertainment industry, and to capitalize on the reservoir of production and programming talent already creating digital product for that industry here. Watch for the continued evolution of digital media products and services; a whole industry stands ready to develop in its wake.

Of course, the importance of security to the fortunes of businesses and consumers alike has been discussed at some length, here in LA VOX and elsewhere. Southern California is central to this new set of activities, both because of the value-added remnants of the historic defense industry, and because of the innovation from smaller companies who emerged from that industry in the last round of downsizing.

And so far as future opportunities are concerned, nanotechnology is a regional strength that cannot be underestimated (but should not be hyped). While the science is years away from revolutionary relevance, incremental opportunities exist which many companies in California will exploit - in nanostructured materials, in biopharmaceuticals and bioengineering. Ultimately, gains will be made in circuitry and in devices, and it is more likely than not that these will happen in California, many in Southern California.

No state in the country embodies Joseph Schumpeter's economic theory of "creative destruction" more than California, and no region has more claim to experience with that theory than Southern California. Meanwhile, our thoughts and prayers are really with New York, which is facing economic meltdown. What remains of the Web in the City are some ghosts in the area once known as Silicon Alley, and their counterparts in the wireless realm. The big event of September 11 has seen the evaporation of thousands of jobs, a continuing threat to revenues for the State and the City, a perceived and pervasive fear that is already causing the migration of companies to the hinterlands, and the prospect of a deficit that dwarfs California's. Would it not be unseemly to write off New York the way they have written off California time and time again (remember TIME magazine's exhortation to the last person leaving California to "turn the lights out?"). It is entirely understandable that in the midst of their suffering, pundits based in the "capital of the world" will want to have others share in their misfortune, if only to make them feel better. My advice to them, however, is: go back to your own knitting, you have one hell of a quilt to make.

Meanwhile, despite some serious problems, including a State deficit, a bill of reckoning on the energy issue, a capacity to cannibalize our own on such issues as LAX, and an education system that leaves much to be desired, we in Southern California have much to be grateful for, in this season of clamor. Happy Thanksgiving!