FROM the PC on your desk and the iPhone in your pocket to the bioengineered antibodies that give cancer patients precious extra months of life, the world owes much to a hotbed of innovation a short drive from my office – an hour on the freeway and I’m in the heart of Silicon Valley, after whizzing by , the planet’s premier biotech firm.
Thanks partly to its high-tech companies, an independent California would qualify for membership of the G8. So how come the state is on its knees, crippled by a budget deficit pushing towards $25 billion?
One surprising answer is a surfeit of democracy, which is threatening to kill the goose that laid the Golden State’s golden egg. In California, anyone garnering a few hundred thousand signatures on a petition can get a put to a public vote, which if backed by a majority will then become law, or even amend the state’s constitution. The system is frequently hijacked by special interests and has thrown the state’s priorities seriously out of whack. With so much set in stone by direct public votes, the hands of elected representatives are tied and the state is effectively ungovernable.
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Just one example: in 2004, voters passed , which raised bonds to spend some $3 billion on stem cell science. Many backed the proposition to thumb their noses at George W. Bush, who had restricted federal funding for stem cell research. The new president is now relaxing those restrictions, while California’s finances descend into ruins. The reasonable response would be to shift spending into other areas. But under Proposition 71, that can’t be done.
This is small beer, however, beside the pernicious effects of , passed in 1978. A populist constitutional amendment that capped property taxes, it has created a hole in state finances that gaped wide this year as recession bit into tax revenues. By limiting local school boards’ ability to raise funds from property taxes, it also turned a public education system that once led the nation into one of the .
This is the real tragedy, which may seal the fate of Silicon Valley and the state’s biotech industry. At some point, the failure to invest in education will cause its technological supremacy to slip away. California already relies heavily on immigrant talent to sustain its high-tech workforce, including programmers from India and biologists from China.
In less perilous times, it might be OK to simply watch the global hub of innovation shift from the Bay Area to Bangalore or Beijing. But with the world crying out for clean-energy technologies, the safe bet is to invest in established centres of excellence.
For everyone’s sake, California must grow up and reform its constitution. Its predilection for direct democracy has turned the state into a fiscal basket case. We need propositions to fix the mess created by their predecessors and then to rein in the entire system, allowing elected representatives to do their jobs. Either that, or kiss Silicon Valley goodbye.