Innovating the Way We Govern California
Lenny Mendonca
Chairman
McKinsey Global Institute
BASIC is a leader in action-oriented support for Bay Area science and technology innovators to share ideas and collaborate on challenges to advance the region and nation’s R&D leadership. I submit that this mission includes many domains spanning the hard and increasingly the social sciences. To that end, tremendous opportunities exist for the Bay Area to demonstrate regional and national leadership in a particular area of innovation that is in need of much help. Namely, innovating the way we govern ourselves. The public sector, as stewards of some of our most important institutions, delivering much of the primary research, education, and basic social service upon which we rely is in deep distress. Innovation in that sector holds some of the greatest promise in terms of community, business and societal growth.
Recently the Bay Area Council Economic Institute released “Recession and Recovery: An Economic Reset”, the seventh in its semi-annual series of Bay Area Economic Profile reports analyzing the Bay Area’s economy.
The report’s release reads: “In the face of the worst economic downturn in decades, many of the perennial challenges that pose a threat to the economic success of the Bay Area have come into stark relief. And yet many of the region’s competitive economic strengths have come through the recession intact.” Among these strengths are high rates of productivity, a high concentration of Fortune 1000 and Fortune Global 500 companies, high per capita GDP, a highly educated workforce, an innovation engine supported by world-leading research laboratories and universities, a large share of national venture capital investment, strength in emerging sectors such as clean tech, and deep global connections, particularly with Asia. All this gives the region a strong foundation for economic recovery.
Still, the study finds that the most immediate threat facing the Bay Area and California (many would argue the country), comes from our broken governance system, which affects the fiscal viability of local governments, and investment in the infrastructure and education base on which the long term success of the region’s economy depends. The failure of California’s governance system to make critical investments, produce budgets that fund critical services and balance revenues and expenditures, and embrace necessary reforms threatens our economic prosperity and puts the region and the state at a competitive disadvantage.
For our economy to avoid the economic shoals, we need to embrace and play to our tradition of out-sized innovation. That means taking the innovation energy we see in the private and social sectors, and applying this to the public sector. This transformation is beginning and could not come too soon. Examples can be found here.
Our future depends on our collective creativity and will to act. Given our regional track record, I am an enthusiastic optimist. To that end I ask: What are your ideas for constructive approaches to “R&D” when it comes to government innovation?