Opinion: California Remains the Mecca for Cutting-Edge Business Investment - Times of San Diego

Opinion: California Remains the Mecca for Cutting-Edge Business Investment - Times of San Diego

timesofsandiego.com

Opinion: California Remains the Mecca for Cutting-Edge Business Investment

Chris Jennewein
~3 minutes
Gavin Newsom and Elon Musk
Gov. Gavin Newsom (left) and Elon Musk outside the building that will be Tesla’s global engineering headquarters. Image from livestream

If you watch Fox News or read the editorials in the Wall Street Journal, you might conclude that California has lost its luster as a global center for technology and innovation.

The conservative narrative is that businesses are flocking to Texas and Florida because there is no state income tax and less regulation. Supposedly running a business is all about being able to pay your workers a bit less and cut a few corners on safety.

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But two developments this month tell a very different story.

On Feb. 10, biotech pioneer Genetech announced a $450 million investment in Oceanside to produce new medicines for rare diseases. Then on Wednesday, Tesla said it would establish its global engineering center in Palo Alto.

Now Tesla did move its headquarters to Austin in 2021, and opened a factory there, but despite the Texas city’s reputation as a tech center, the design and engineering of the company’s world-beating electric vehicles will take place in California.

The key reason is California’s unique cluster of technical talent. As Genetech put it, “Genentech’s Oceanside campus was selected for this new manufacturing facility due to its proximity to world-class biotech talent.”

Supporting this are California’s superlative universities. Consider the latest ranking by U.S. News and World Report. Three of the world’s top 10 universities — Stanford, Berkeley and Caltech — are in the top 10, and three more — UCLA, UC San Francisco and UC San Diego — round out the top 20.

By contrast, Texas’ top school, the University of Texas Austin, ranks 43rd and Florida’s best school, the University of Florida, is 98th (and that’s before populist Gov. Ron DeSantis’ education reforms targeting “liberal elites” begin to bite. )

If you run a mature business, with limited prospects for significant technological improvement, then higher education doesn’t matter so much and it does come down to simple dollars and cents. So moving to low-tax Texas or Florida makes sense.

But if your company is changing the world with a breakthrough in medicine, or an order-of-magnitude leap in technology, then California remains the place to be.

Chis Jennewein is editor and publisher of Times of San Diego.

 

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