The commercial real estate business is totally based on a simple principle,expansion and contraction. If our business is to survive and thrive we need JOBS. How do we turn the current situation into intelligent action here and now? Long term, we need a job-centric economic theory — and job-centric political leadership — to guide our plans and actions. In the meantime, consider some basic thoughts.
Silicon Valley is a community with a strong tradition of engineering, and engineers are a peculiar breed. They are eager to solve whatever problems they encounter. If profit margins are the problem, they go to work on margins, with exquisite focus. Each company, ruggedly individualistic, does its best to expand efficiently and improve its own profitability. However, our pursuit of our individual businesses, which often involves transferring manufacturing and a great deal of engineering out of the country, has hindered our ability to bring innovations to scale at home. Without scaling, we don’t just lose jobs — we lose our hold on new technologies. Losing the ability to scale will ultimately damage our capacity to innovate.
We got to our current state as a consequence by taking actions focused on companies’ next milestones. That is of course great, if you are focusing on short term numbers, yet short sighted. We fail of course to look at the longer view and a better strategy. An example: Five years ago, if you were a partner in a VC firm your responsibility was to make sure that all the start ups that were funded had a “China strategy,” meaning a plan to move what jobs they could to China. What about a U.S strategy? VCs should have a partner in charge of every start ups “U.S. strategy.” Companies in general should make it a priority to keep the engineering and manufacturing and jobs here.
The first task is to rebuild our industrial commons. We should develop a system of financial incentives: Levy an extra tax on the product of offshore labor. (If the result is a trade war, treat it like other wars — fight to win, China does.) Keep that money separate. Deposit it in something called the Job Bank of the U.S. and make these sums available to companies that will scale their American operations. Such a system would be a daily reminder that while pursuing our company goals, all of us in business have a responsibility to maintain the industrial base on which we depend and the society whose adaptability — and stability — we may have taken for granted.
Choice Is Simple.
Job creation, technical innovation ,industrial base, financial incentives, job-centric plans and actions. Yet the imperative for change is real and the choice is simple. If we want to remain a leading economy, if we want to compete with the world, if commercial real estate has any chance of not only surviving but thriving we need change on our own, or change will continue to be forced upon us. What are your thoughts and suggestions about how we in commercial real estate are effected and what do you think we need to do?