Job Creation Needs Work

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By PATRICIA PALLESCHI

According to the Industry Report Card issued by the Los Angeles Economic Development Council in February, the state of local business was bad in 2008 and is rapidly declining in 2009. The LAEDC also announced that the “Recession Was Here.”

Well, the LAEDC confirmed with data what we all knew.

Putting the ever-growing mound of economic data aside, what does “recession” mean in human terms? It means that there will be fewer jobs.

One difficulty we are facing now is how to build jobs and train people at the same time.

Obviously, creating jobs is different from training people to hold jobs. Not so obvious, creation of jobs needs to precede training. It is my fear that training has gotten attention, without equal attention being given to job creation.

Maintenance and creation of jobs resembles an ecological system. You need a welcoming environment. And, to use Malcolm Gladwell’s term, there is a tipping point at which jobs will be extinguished because the environment is toxic. At some point, if we no longer have jobs, no amount of money spent on “training” will create them.

This fear that we are at a tipping point reminds me of Solomon in the biblical story where he calls for a sword to cut in half a boy whom two different women claim as their son. “Jobs” have been cleaved into two political approaches: The Democrats believe in stimulating the economy via training; the Republicans believe in stimulating the economy via business incentives.

On the one hand, I’m pleased that our government has created more job training programs. But on the other, I am distressed that the welcoming governmental environment so necessary to business growth is not being given the same attention.

The ecology of job creation is very interesting in another way. Industry growth does not often come from entry-level jobs. Much job growth comes from rational business people making rational decisions about where to situate their businesses. And because they are rational, if they are incentivized to bring their ideas elsewhere outside of the L.A. area, they will.

Because of this job ecology, a business based here needs continuous “nourishment” to stay here.


ReelzChannel gone

As a small example, we have lost ReelzChannel to another state. It was offered major incentives to leave. This is a

signature business for Los Angeles and its loss is not only tragic because of the loss of jobs and taxes for our city. It is a symbolic loss symbolizing all the television production going on in Vancouver, British Columbia, and various places in the United States that are more hospitable. It is symbolic of all the biomedical business we have lost to other states. And the technological advances we have ceded to our northern cities.

We should be holding on to our key businesses with all our efforts, holding on by our fingernails if need be. The key businesses that need to be kept in our area: arts/entertainment and media, biotechnology, health services/biomedical, international trade, technology and tourism.

But more is needed. Individuals need other help from our government, too. Let me give you an example.

One entrepreneur, a smart, energetic, passionate person, has a fledgling company able to make a difference in the way industry and universities collaborate to mine academic breakthroughs and bring them to market. This pharmacist, with more than two decades of experience at a major drug company, tells me that she has spent close to a year trying to “crack the code” of how to have public institutions and key decision- makers participate with her to stimulate the creation of science jobs in Los Angeles.

In her words, she has a concrete project, “But it requires some capital, not a ton, to actually get it off the ground ASAP!

“I need help! Access to capital sources, connections, acceleration of the city’s decision to finally commit to do the project and the needed coaching for our team.

“If this is not ‘tangible job creation,’ I don’t know what is!”

This entrepreneur has approached a thicket of Democrats, and she will get help, but it won’t be easy or quick.

As indicated in this example, job growth comes from highly educated people who can incubate ideas. Job creation comes from an Edison discovering the light bulb or a Pasteur finding a miracle drug. Innovators coming from the major universities in our area can generate more jobs, job innovation leads to more job creation. We have those people in our area.

The help that these individuals need from the government is help in navigating through “the system” to start their companies. We are the “city of entrepreneurs.” Let’s keep that label by making it easier for the entrepreneur to enter our system.

And where are the venture capitalists who enjoyed the last 10 years as their “bold choices” yielded big personal benefits and many innovative jobs? Again, according to the LAEDC, the venture capitalists have pots of money, but they seem reluctant to venture from behind their desks.

So, in the spirit of nonpartisanship that should be driving us right now, let’s not cleave the issue of “jobs” so that all jobs are lost. Let’s name a nonpartisan expert and make him or her accountable for both incentivizing signature businesses to stay in the L.A. area and providing the bright folks coming from our educational institutions all they need to incubate businesses. No party affiliations the person should become the czar of jobs.

Los Angeles should be the first city to mandate that every piece of legislation, every economic venture, every proposition be labeled with something that voters can understand clearly. It should be a label that indicates the effect of the legislation on job creation and job training. The czar of jobs should have that responsibility.

If government can mandate that our food be labeled with calories, why can’t they have a label that clearly indicates the jobs lost or created by the decisions on which we vote a label that will enable us to make better choices to end this depr recession?

Being in favor of job creation and maintenance of our signature industries must be nonpartisan.


Patricia Palleschi, Ph.D., is president of an executive-level employment agency in Westwood. She is a former executive at a Fortune 200 company and has taught at the Loyola Marymount University Department of Communication.

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