The National Barometer
For better or worse, California's economy can set the country's pace
Bright side. "I'm optimistic," says Bob Damon, West Coast managing director of the executive search firm Spencer Stuart, where revenue from California operations was up 12 percent last quarter. Demand for new hires was particularly strong at consumer goods and life sciences firms. And though tech is still patchy, the outlook for the wireless and semiconductor sectors is upbeat, says Damon, "even telecom, which is finally showing signs of life after being dead for three years."
Most observers believe the state's indomitable spirit will eventually get it back on track. That vitality may stem from what a recent Wells Fargo study calls California's "triple endowment": an entrepreneurial culture, access to capital, and a pool of talent not easily replicated. The potent combination will allow the state to create new jobs in burgeoning areas like biotechnology and nanotechnology. "Nobody else has been able to duplicate Silicon Valley, where people are skilled and risk taking," says Tom Lieser, of the University of California-Los Angeles Anderson Forecast.
"The start-up culture is in our DNA," says Chip Adams, managing director of San Francisco-based venture capital firm Rosewood Capital. "And that hasn't really changed despite the downturn."
A MIGHTY FORCE
If California were a nation, its economy would rank fifth in the world. No wonder it's so influential.
CALIFORNIA UNITED STATES
Population 35.6 mil. 292.3 mil.
GDP (2003, estimated) $1.5 tril. $10.8 tril.
Median family income $48,113 $43,052
Unemployment rate 6.4 pct. 6.1 pct.
Deficit (2004, projected) $8 bil. $480 bil.
Sources: U.S. Census; UCLA Anderson Forecast; California Dept. of Finance; CBO; Bureau of Labor Statistics
With Tom Stein
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