Entrepreneurs in California – Establishing Their Own Value
Pam Sornson, JD
‘Getting ahead’ in life typically means ‘to be successful’ or ‘to excel.’ For many people, however, that aspiration is often hampered by a variety of barriers and obstacles, both personal and public. Unfortunately, much of today’s outdated social and political infrastructure contributes to the problem by retaining policies and practices that were designed to prevent some California residents from ‘getting ahead’ in their own lives. California’s government is working at changing that reality. One avenue it is specifically pursuing is improving the opportunity for residents to build their own roads to getting ahead by investing in support and services for current or wanna-be entrepreneurs.
California’s 2023-2024 Budget
Perhaps most notably, Governor Newsom’s proposed 2023-2024 budget optimistically recognizes that the State’s economy has entered the post-pandemic recovery period. The May ’23 revision of the proposed budget notes many significant factors impacting California’s current and future economic outlook:
The State’s prevailing inflation rate, while relatively high at 5/1%, is much lower than the initially projected 7.1% (down from 8.3% in June of last year). Elements contributing to the reduction include the easing of costs for trucking and port congestion, reduced fuel prices, and an increase in the availability of microchips.
The labor market continues, also, to add jobs, although not at the rate seen in early 2022. California’s monthly jobs gain was ~68,000 in that year’s first quarter. In the first quarter of 2023, that number fell to an average of ~32,700.
In its forecast for the future, California believes it will track the country’s economic growth pattern, which is now averaging about .5% for each quarter through Q3 2023. However, confident financial advisors expect the Federal Reserve to ease its inflation-curbing policies by Q4, which would also jump-start a subsequent growth range of 1.5% to 2.0% for California in that quarter and those that follow.
Not insignificantly, the State has recovered all of the jobs lost in early 2020 because of the pandemic. As of March 2023, nearly 2.8 million jobs returned to the economy, five full months before originally projected by previous analysts. That number includes occupations in low-wage ranges, which are now showing ‘robust’ growth. However, the State’s current labor force remains less than it was before COVID hit, with only ~77% of those who left the market in 2020 returning in 2023. The Governor’s office predicts that California’s GDP will regain forward momentum and stabilize at 1.5% to 2.0% through 2026.
The EEMTF and the CalOSBA
Two notable entities are tasked with helping the State and its residents achieve that growth. The California Office of the Small Business Advocate (CalOSBA) and the Entrepreneurship and Economic Mobility Task Force (EEMTF). Together and in conjunction with numerous other state and regional economic entities, these business, industry, and economic experts provide guidance and information for small businesses of all kinds, including entrepreneurs.
The CalOSBA focuses its attention on helping smaller organizations manage the myriad of financial resources, regulations, and programs available through state and federal agencies.
The experts appointed to the EEMTF in 2022 are directed to focus their attention on assisting entrepreneurial enterprises in attaining their full potential by identifying and clearing away obsolete programs and policies that presently bar their way. As an adjunct of the CalOSBA, the EEMTF will attend to three distinct goals, each of which is driven by the State’s mandate to improve the depth and breadth of its economic diversity:
Democratize access to capital – ensure that all those businesses that seek financial assistance can find it, regardless of the ethnic or other background of their ownership.
Diversify the innovation economy – This goal specifically looks to assist visionaries with diverse backgrounds and perspectives in bringing their unique ideas to life.
Drive economic mobility through entrepreneurship – As a pathway to upward mobility (both social and economic), entrepreneurialism offers individuals the opportunity to build the entity of their dreams while improving their station in life.
The EEMTF consists of 34 members from diverse backgrounds and with various histories and educational capacities. Together, they will help California identify and eliminate its internally embedded biases to build a stronger and more inclusive workforce and economy.
California’s Community Colleges
As one of three pillars of California’s higher education system (the other two being the California State Universities and the Universities of California), the California Community College system (CCC) is equally invested in entrepreneurialism as a foundation of its academic pursuits. It has designed its ‘Small Business’ career pathway to support students with great ideas but need more business know-how by providing them with resources and mentors to guide their way. Further, the CCC system has tailored those resources to comport with the eleven economic sectors identified by the CCC Strong Workforce Program:
Advanced Manufacturing
Advanced Transportation & Renewables
Agriculture, Water, & Environmental Technologies
Energy, Construction, & Utilities
Global Trade & Logistics
Health
Information & Communication Technologies and Digital MediaLife Sciences & Biotechnology
Public Safety & Service
Retail, Hospitality, & Tourism, and
Business & Entrepreneurship.
Each sector is led by a Sector Navigator with long-term experience in that particular economic component.
California is 5th highest in the country for entrepreneurial growth.
It’s second overall in entrepreneurial activity.
Small businesses, almost all of which are owned by individuals, comprise 98% of the State’s business community. They:
Provide four of five (82%) private sector jobs
and 75% of its GDP.
As those businesses look for ways to improve their fortunes in the post-pandemic era, many are turning to the CCCs to provide training facilities, educational support, and – most importantly – a well-trained workforce to move them forward. As well, in response to the burgeoning of the ‘self-employed’ career industry, 24 of the State’s 116 CCCs now offer a program focused on ‘Self-Employment Pathways in the Gig Economy.’
All these developments indicate that the whole of California’s economic community – from its governor’s office through its state agencies to its educational and industrial organizations – looks at entrepreneurialism as a fundamental aspect of its current and future economy. With this vast quantity of quality inputs and resources, there’s no reason why the State shouldn’t rise to become top in the nation as the epicenter of industrial and cultural innovation.