October 30, 1997 - From the October, 1997 issue

Joint Venture Silicon Valley: Implementing a Regional Vision

In the early eighties, Silicon Valley set the pace internationally for technology-driven economic development. But even after notable declines later in the decade, the 2 million person, four-county region is again proving itself a leader, only now as a model of metropolitan cooperation. Joint Venture: Silicon Valley Network was founded to bring the region’s leaders together to attack their problems as a unified force. Former State Senator and former Santa Clara Supervisor Becky Morgan has been Joint Venture’s President and CEO since 1993. TPR looked to her for insight into Silicon Valley’s success, and what Southern California’s metropolitan movements can learn from Joint Venture. 

“Cities get their revenues from sales taxes, so it behooves them to put in a Costco, a Walmart or an auto mall… Until we change that tax policy, we’re not going to solve our housing problem.”

Will you share with our readers what Silicon Valley Joint Venture Network's vision is? 

Joint Venture: Silicon Valley Network began when the San Jose Chamber of Commerce became concerned in the late '80s and early '90s that businesses were leaving Silicon Valley, or at least expanding elsewhere. They thought they could play a greater role in retaining business, as had happened in Austin, Texas. 

After 18 months of study and production of a book of solutions, Joint Venture was incorporated to bring together business, education, government, and community leaders to identify and act on regional issues. 

What is the need that motivated the organizers to gather to form the network? 

Businesses were leaving the Valley citing three issues: high taxes, onerous regulations and downright unfriendly government. We got into a culture of blame—government was pointing fingers at business and vice versa Joint Venture really was about moving beyond that and saying hey wait a minute, we're all in this together

Are political jurisdictional boundaries a material fact in Joint Venture's existence? How do the Network's collaborators deal with local governments competing fiercely with one another and their respective needs for maximizing sales tax revenues? Does the current State/Local fiscal structure undercut cooperation? 

First you take small steps, get results, and create success stories. We aren't jumping immediately into revenue sharing or other controversial issues; we started out as a neutral convener. For example, when economic development officers from different cities would try to get together to talk about collaboration, it never worked. But when I hired a staff person (who is just fabulous with people and processes) they came to the table. 

Economic development officers now meet every other month. And their attitudes have changed from competing with one another to working for the good of the Valley. The priority is now more to keep companies in the Valley than in any city.

Granted, this is all happening during a period of economic growth. Things might change if we have another early '90s-type downturn. But we have accomplished the first step of getting people to come together. 

What is the enlightened self-interest that propelled the individuals that took leadership in the network to come forward and donate and dedicate their time to do it. There had to be something that brought them together and that keeps them together.

Businesspeople wanted to work with cities to streamline the permitting process to get their products to market sooner. They couldn't wait six months for a permit when they were developing software that might last only three months. It was in cities' self-interest to put in place a process that would bring them more tax revenues. It was really win-win for all parties.

We introduced and sponsored several pieces of legislation. One provided a credit for the sales tax companies spent when purchasing manufacturing equipment. This somewhat reduced immediate revenue to the cities and the State, but companies stayed here, in contrast to the exodus of the late '80s and early '90s. A company putting up a new fabrication facility could save $5 or $6 million, for example. And Intel, which left Silicon Valley to expand in New Mexico could have saved $70 million if that legislation had been in place early on. 

Who is the ''we'' in Silicon Valley? What is the composition of the Network's leadership? 

''We" is a collaborative board made up of business leaders, city council members, associations like American Electronics Association, the San Jose Chamber of Commerce, Labor, and educators. Almost everything we do involves business and government or business and educators. 

My Board is cochaired by the Mayor of San Jose and the CEO of Hewlett-Packard. We try to have cochairs as often as possible. We are bringing together educators and business leaders to create a renaissance in education. We're bringing together health care providers and hospital CEOs to try to create wellness in the workplace. 

You formerly served with distinction in the California State Legislature and now you're in this amorphous position as President of a regional network. Given your prior experience, elaborate on what you believe you bring to your position. And elaborate, if you can, on why it's been so difficult for similar regional efforts to successfully arise? 

It is a joy to be in the community working with a team that believes in cooperation and heading collectively in the same direction. We have been very fortunate to work with elected officials who get beyond personal agendas and think regionally. That doesn't mean, of course, that they don't have their own agendas when they go to the city council meetings. It's just that within the Joint Venture family, they think regionally. 

I don't want to think, however, that Silicon Valley is uniquely capable of this. There are people-elected officials, government employees, businesspeople—in all communities who can be tapped to look beyond simple self-interest. 

Some say Silicon Valley has the advantage of having a regionally conscious newspaper, the San Jose Mercury News. How big a role in the success of JVSV is a partnership with the media, and what lessons have you learned in building a partnership? 

We have fostered a very positive relationship with The Mercury News that wasn't there in the first year-and-a-half. There used to be a great deal of suspicion. The reporters assigned to cover what was happening were often very cynical, very critical and only looking for who's out to promote themselves—the old mindset. 

But with one-on-one conversations with publishers, editors, and writers, we've turned that around. The people we've gotten appointed to the Board has helped, too. I don't mean to sound immodest, but the Mercury News had always been supportive of the job I did as a legislator, so my appointment as President brought some credibility to the organization. 

The Mercury News has now become so active and involved that the publisher will be Cochair of our new Silicon Valley 2010 visioning project. 

Elaborate on the Silicon Valley 2010 project. 

Joint Venture will convene a process leading to a vision of what a sustainable Silicon Valley would look and feel like in 2010. This vision will include measurable goals, not just warm and fuzzy words. 

We want to get some baseline data—on land-use, how well kids are doing in reading, math, and science, and on the new economy. We will then set goals for a sustainable economy, environment, community, and governance. We're going to look to developing relationships with organizations and elected officials to help move toward these goals.


Let's return to the role of government in the promotion of regional collaboration. Some have suggested current tax policies are disincentives for cooperation both within a region and between and among cities and school districts—that the State Constitution, as amended by propositions over the last twenty-five years, fosters competition between and among jurisdictions and undercuts the ability of local governments to set priorities. Is the state legislature part of the problem, and why was so little attention paid to the recommendations of the State Constitution Revision Commission? 

We testified before the Constitution Revision Commission and had high hopes that at least some of what they did would be adopted. I'm frankly very disappointed that the State Legislature, which I had already left, could not have acted. 

In retrospect the Commission probably tried to carve out too much; nobody was prepared to deal with that big a package. A turf battle ensued over what subset of the recommendations would be considered. And no consensus developed, which is very unfortunate. If the recommendations can catalyze future change, however, the Commission will have served a purpose. 

How big a problem is the State Constitution and the current State local fiscal relationship when trying to garner cooperation within a region? 

State tax policy is a major impediment to improving sustainability in California. People complain that we don't have enough housing and that housing is too expensive. A primary reason is not poor city planning and bad zoning decisions—it's tax policy. 

Cities get their revenues from sales taxes, so it behooves them to put in a Costco, a Walmart, or an auto mall. They get very little property tax from new homes, most of these takes go to Sacramento. 

Until we change that tax policy, we're not going to solve our housing problem. 

What keeps citizens at the local level and local leaders from galvanizing around this issue? What has impeded a shared conclusion that the dysfunctional State fiscal structure is a critical problem that needs to be tackled immediately? 

A total lack of information about the problem. When we brought together city government people and businesspeople on our Council on Tax and Fiscal policy, the city people shared what they faced. They explained how tight the reins were and how little flexibility they had to raise funds. The businesspeople were aghast! They had no idea the straight jacket that cities operate in today.

My hope is that we educate more businesspeople—whether through the California Business Roundtable, the chambers of commerce or efforts like Joint Venture—about the problem cities and counties face. That’s where we ought to be putting our money. Being close to where the decisions are being made helps you know whether your money is being spent wisely.

Having just attended a Civic Entrepreneur Conference which brought together regional groups like Joint Venture from around the State, what do you believe the regional efforts have in common? Are you hopeful that there is a budding regional movement out there?

I hasten to say that Joint Venture didn’t go to Washington or Sacramento to solve the problems of Silicon Valley. We went out and worked within our own region to deal with the issues.

This conference is all about saying let’s do it ourselves. As we try to do it ourselves, though, we run up against tax policy and regulation. That means there are some things we can’t do without changes in regulation or the Constitution.

There is a heck of a lot that regions can do by themselves—changing the permitting process or improving schools, for instance—but to change tax policy, we will need Sacramento’s cooperation. It has always bugged me, as somebody who came out of education, that 50% of the voters can pass state bonds that will build schools in Southern California, but if we want to repair our 50-year-old schools in Silicon Valley, two-thirds of the people must vote for the local bond measures. That’s backwards. Things like that need to be changed, and nobody has the guts since Proposition 13. 

What is your take on the impact of Prop. 218 on the capacity of local government to deliver on its infrastructure priorities?

We sided with the cities on 218, thinking about dire consequences that were supposed to ensue if 218 passed. But I have not yet heard about any significant consequences of 218. To my knowledge, none of the cities in Silicon Valley are going to the voters for approval of previously imposed taxes.

At the same time, Prop. 218 and Prop. 13, which were intended to give the people a greater voice, have had the inverse impact. They have taken more power away from local government where people can more directly see what is going on and given it to Sacramento.

What lessons should be derived from the Silicon Valley Network effort to date for megalopolises like Los Angeles.

I have worked very hard to carve out a niche industry for Joint Venture—not to be redundant with the Chamber of Commerce, the Santa Clara Valley Manufacturing Group, or other organizations. It is very important not to be dragged down by other organizations that question the need for a Joint Venture. In fact, many other organizations feel they are stronger as result of Joint Venture’s coming on board and taking a collaborative approach to problem solving. 

One lesson learned is don’t tread needlessly on other people’s toes. We haven’t gotten involved in transportation and air and water quality issues, for instance, because the Manufacturing Group is already working with government on them. It is also important to find a new way of doing things, to bring some new value added to the process and to choose the right people.

One of the messages that comes from this Civic Entrepreneur Conference is that regions do matter maybe even more than states and nations in their competition with one another. One must figure out a way to reinvest in the capacity of that region to compete more effectively. That is going on simultaneously with the frustration at the local level—wanting to break government up into smaller and more neighborhood-oriented units because of frustration with the services from counties and large cities. How do you put these two together? What are the lessons from those two messages? How does one find common ground?

If you carefully choose the people from business and government to work together on the first projects, their success reduces the fear factor in the future. We saw that happen when we worked on permit streamlining in six cities and the County Assessor’s office. That lent courage to the building code administrators in four cities who joined together to create a unified building code. That code is now in place in 27 cities—something unheard of previously.

None of that could have happened without the small successes in individual cities. The word starts to spread. You dream big and plan small.


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