California receives a majority of U.S. venture capital (VC).  Always
has, hopefully always will.  Our state produces brilliant creative
minds and ideas because of its University power and its sheer size of
35 million people.  This unique outcome alone does not however equate,
by default, to the meaningful job growth necessary for our many workers
whom are unemployed and under-employed (a term becoming all too common
for the folks forced to take any job they can find).

We must leverage our built-in VC advantage to ensure that emerging
green and other products are actually produced here.  California’s
wealth will be multiplied once VC cash gets beyond the investment board
room offices and into the bank accounts of our very own hard working,
middle class families.

Recently the LA Times wrote a piece about VC growth in California and the notion
that it does, and will, open the floodgates to new green jobs.  Often
the state’s VC numbers are used to support bold California-only
mandates and policies, without regard for the state’s competitive
disadvantage.   Now the impressive amount of VC investment is being used to justify opposition to Proposition 23 — the
ballot initiative to suspend AB 32 until our economy is in better shape
and unemployment numbers are reduced.

I offer eight recent independent examples and statistics that refute
the notion that VC and seminal green projects automatically produce the
type of job growth this state needs for its economic recovery. 

  1. Silicon Valley-based Solexant solar systems raised $41.5 million
    in VC but uses a $25 million loan and Oregon tax credits to build
    200-employee manufacturing facility in Oregon.  Daily Finance article
  2. California-based Fisker automotive purchases manufacturing
    facility in Delaware to produce it’s $90k and $40k plug-in hybrids.
    (Why didn’t these guys get the same deal Tesla got?) Wired article
  3. Orange County-based Amonix has big list of VC
    investors but purchases 214,000 square foot facility in Nevada for 300
    workers to manufacture its solar power systems.  Las Vegas Review-Journal article
  4. Oceanside-based biotech firm International Stem Cell Corp. using
    VC in India to site facilities over there. SD Business Journal article
  5. Richmond-based Vetrazzo recycled glass countertop manufacturer
    receives $2 million in VC, but only if they move production where they
    can compete. SF Business Times article
  6. California movie mogul Kevin Costner has spent the past 15 years
    developing an oil-cleaning centrifuge machine.  It’s being made in
    Carson City, Nevada. article
  7. California’s overall portion of U.S. new and expanded
    manufacturing facilities was 1.3% over last five years, while close to
    half of the country’s venture capital continues to funnel to the
    state.  chart
  8. Lastly, a reminder of some other companies that went with more
    competitive manufacturing locations that were mentioned in our "Why not California" series.

VC might have translated into regional job growth in times long
past, but now the world is too mobile, too competitive, too global. 
California must find a way to compete so we can leverage our VC
dollars, creative minds and ideas into broad wealth for all working
families.