Regional Governance Key To Remaining Competitive In A Globalized Economy

The Southern California Association of Governments recently hosted national administrators at a Metropolitan Region’s Forum, addressing regional growth strategies for dealing with transportation congestion and housing affordability. TPR is pleased to present this interview with SCAG Executive Director Mark Pisano to discuss the conference’s findings about the challenges facing major metropolitan areas and the strategies regional governments can employ to meet these challenges.

The Planning Report

Mark, SCAG just hosted twenty regional administrators from the 20 largest regions in the country. The purpose: to compare best practices and notes on regional strategies and challenges. You opened the weekend meeting by giving a report on the status of our region. How would you summarize for our readers the status of our region—the manufacturing capacity, employment, population—the region’s livability challenges?

The fundamental issue that I presented to my colleagues about this region is that over the past two decades we’ve assimilated a large number of immigrants, and at the same time lost a large portion of our manufacturing base. The result is that among the major metropolitan areas, our region has the lowest wage rate and the lowest per capita income.

Another major issue is the capacity of our infrastructure to accommodate the impending growth in the region. Our cities’ general plans will not provide for the forecasted economic and demographic growth, but the strategies that the region is following in growth visioning and coordinating development patterns with transportation will provide for that growth.

Finally, I noted that this region has become the center for handling the goods that are coming in from foreign countries. Our manufacturing jobs have gone abroad and the goods are being produced there, and they’re coming back to this country through this region, and we’re needing to build large amounts of infrastructure.

Did the other regional administrators report trends and findings that were similar to SCAG’s analysis for the L.A. basin?

Some of the other regions—such as Cleveland, Columbus, and Detroit—have been stagnant in their growth for several decades. In most regions, the growth they are seeing is being redistributed within the region into very large parcels and very low densities. But, the population employment growth is not occurring. Therefore, their regional development patterns are becoming rather inefficient. Growing regions are now beginning to experience competition from abroad for service and high tech jobs. The one conclusion that became apparent across all of the regions is that global competition is changing the nature of our regions in the United States.

In June, Metro Investment Report interviewed Larry Welch, a Hewlett-Packard executive in the Sacramento-Roseville area. He indicated that HP was employing 40% fewer people than they had been only a few years earlier, and that every decision post-merger with Compaq was made in light of global competition. As such, he predicted further erosion in the employment base in that area, once a fast-growing new center for HP. Is that L.A.’s future?

A lot of jobs have certainly left our area, many of them moving abroad. However, we have been gaining in other areas, such as logistics, as a result of trade. The increase in logistics jobs in Riverside and San Bernardino has kept this region positive in the last decade, and in the last two or three years, it has kept us from having dramatic job losses. But, what I picked up from many of my colleagues is that the same type of job loss that has occurred here and in Sacramento has also occurred in their regions. Banking and financial institutions are moving back-office operations to India, the Philippines, and Ireland. Because of global competition, these jobs are unlikely to come back. The summary conclusion that we arrived at was that this question of how the US worker will remain competitive and maintain a high quality of life with good wages will become the primary challenge for this century.

What is the present capacity of our country’s regional planning agencies to have an impact on how we, in this next century, grapple with the livability challenges you have described so well?

What became apparent is that in order for us to be competitive in the next century, a number of elements need to exist within our regions. First, we need to coordinate regional growth and development patterns so that we yield a high quality of life. The one variable that stands out above all others is that those regions with a high quality of life are going to be able to continue to both attract and maintain the employment activities in which we have our best chance of remaining competitive. It is becoming apparent that city by city land use activities, while the foundation, cannot create that kind of environment. What I found from my colleagues across the country is, like us, they’re all engaged in land-use growth visioning, growth pattern/transportation, and open space preservation efforts. The governance structures in many of these regions are evolving to enable them to accommodate that.

The second element that is needed is basic infrastructure, which we all agreed we’re grossly deficient. We discussed strategies for building infrastructure in the future. We all concluded we’re going to need intergovernmental support, but we’re also going to need to develop revenue sources that will enable us to build our own infrastructure—either local sales taxes, revenue backed projects, or toll type projects like the Alameda Corridor.

Third, we need to have an integrated structure so that what goes on in the classroom and in our educational and cultural institutions reinforces the development of a labor force that will be truly competitive in all the various dimensions. We need an educational system that is more fluid and integrated to enable us to develop our labor force. Our competitive edge right now is in the universities that seem to do an extremely good job of producing creative and entrepreneurial people. But, is that sufficient for the majority of our population?

The question is, do regional governments have the tools to face these challenges? We concluded that a lot of good experimentation and good development is occurring. But, the real fundamental problem we have in the intergovernmental structure is the federal government deals with the states, and by the time it gets down to the region, we get the lowest common denominator. To be competitive in this century, we need to restructure the intergovernmental systems so that the federal government works directly with the 20 to 30 major metropolitan regions where economic competitiveness has a chance of spawning and developing. The states do not have the focus or the relationship with local government to build these kinds of strategies.

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