Despite a public sector whose vitality had been compromised by Proposition 13, California on the whole outpaced the rest of the nation and many countries in economic growth, job-creation, and per capita income from 1980 to 2000. This was true despite a severe recession in the first half of the 1990s. By the early 2000s, California’s trillion-dollar gross product, that is, the value of the goods and services it produced yearly, placed the state 6th among the world’s nations. In 2001 Los Angeles County’s $352 billion economy ranked 16th in the world, ahead of Russia’s.
This spectacular economic growth can be attributed to many factors. The diversification of California’s economy was a major strength: its agricultural production continued to lead the nation, earning $14 billion in 1986; manufacturing thrived, especially as Japanese firms
Established assembly plants in the state; banking remained robust in San Francisco and Los Angeles; construction, particularly commercial, showed no abatement; tourism garnered $75 billion annually by 2000; and California dominated the world’s film and television markets. To these engines of economic growth must be added two others of even greater consequence: the state’s further integration into the bustling Pacific Rim economy, and the spectacular high-technology enterprises in Silicon Valley and elsewhere along or near California’s coastline.
The state’s turbo-charged business activity from the 1980s to the early twenty-first century had much more to do with California’s connections to the Pacific world than with its ties to America’s interior and Atlantic regions. While much of Europe in the 1980s was emerging from the stresses and military spending of the Cold War, the nations of East Asia had been industrializing. Its international security assumed largely by the United States, Japan parlayed its people’s vaunted work ethic and corporate culture into making it the richest country in Pacific Asia. South Korea, Taiwan, and Hong Kong, similarly, grew their economies, while China stood on the cusp of becoming the trade and banking giant of Pacific Asia. All of these powers outpaced Europe’s leading nations in generating wealth. This was the transpacific business environment of which California - America’s most Asian state in terms of population - was a part. This huge oceanic region, the new hub of the global economy, remains the most dynamic commercial zone in the world.
Maritime commerce has been at the heart of California’s involvement in the $3 trillion Pacific Rim trading economy. “By 1980 two-thirds of California’s exports went to Asian destinations,” noted historian Bruce Cumings, “and American trade with Asia eclipsed that with Europe.” The state’s business transactions with Pacific Rim countries in 1985 amounted to $65 billion and most of America’s commerce with those nations passed through California’s ports. In 2004 California’s exports to those countries were valued at $110 billion. “Our future is with the Pacific Basin,” remarked the head of the California Office of International Trade. “We’re right in the middle of it. If the Basin prospers, we prosper.” Since 1999 Mexico has become America’s leading trading partner, due largely to the United States entry into the North American Free Trade Agreement that established a continent-wide tariff-free zone. In the early 2000s, 40 percent of the United States waterborne imports came through the linked Pacific ports of Los Angeles-Long Beach, the nation’s largest, busiest harbor complex. Oakland held strong in fourth place. Seventy percent of America’s Asian trade flows through these ports. The state has been helped in tracking these statistics and providing information to businesses by its institutions of higher education. For example, the University of San Francisco’s Center for the Pacific Rim and UC San Diego’s Graduate School of International Relations and Pacific Studies have supplied focused information required by Pacific Basin investors and traders. Pomona College’s Pacific Basin Institute brings together the region’s business leaders, academicians, and government officials.
Regarding labor, waterfront employment as dockworkers and even clerkships went almost entirely to males until a 1983 U. S District Court decision required that the International Longshore and Warehouse Union “adopt the long range goal of employing women as marine clerks. . . at the Port [of Los Angeles] in sufficient numbers to eliminate the continuing effects of any possible past discrimination.” To implement his decision, the
Figure 13.4 California's major export markets and the nature of the goods sold are shown in this graph. Source: Cal Facts (Sacramento, CA: Legislative Analyst's Office, 2000), p. 6.
Presiding judge set hiring quotas for women. As gender bias in hiring declined, the Port of Los Angeles provided 203,000 jobs in a nearby five-county area in fiscal year 1991-2. Port pilots, who navigate container ships and oil tankers through the harbor, were among the highest-paid employees, receiving $150,000 to $300,000 a year in the early 2000s.
Equally important in fueling California’s extraordinary economic growth beginning in the 1980s was the bonanza of technological innovation issuing from Silicon Valley. Far removed from the more traditional business culture associated with America’s Atlantic seaboard, casually clad young computer geniuses on the Pacific Coast blazed their own trails across the frontier of information technologies. A good share of these prodigies was affiliated with Stanford University, situated in the heart of Silicon Valley. Located slightly south of San Francisco Bay, the valley has been the epicenter for the computer-related high-technology industries that have shaped the way business and communications have functioned worldwide. In the early 1990s a subset of the 900,000 Asian Pacific Islanders living in the Bay Area included tens of thousands of Taiwanese engineers and other computer specialists who owned homes in Taiwan and Silicon Valley. They commuted by plane back and forth across the Pacific, and the decor of their homes in both places reflected what authority Shenglin Chang calls “transcultural lifestyles,” meaning the residences and even identities of the Pacific-crossers were a mix of Taiwanese and Californian culture. Highly educated Asian-born women continue to comprise a good number of these ambitious transpacific professionals.
Numerous firms sprouted in Silicon Valley’s fertile intellectual environment. Steven Jobs, a college dropout and student of Buddhism, and Stephen Wozniak, a UC Berkeley engineering graduate, co-founded Apple Computers. Robert Noyce, co-inventor of the silicon microchip, led Fairchild Semiconductor and then Intel. Internet search companies such as
Yahoo, Excite, Lycos, Infoseek, and Netscape sprang up, the handiwork of young computer entrepreneurs. The giant-to-be of them all, Google, was co-founded in 1998 by two Stanford graduate students, Larry Page and Sergey Brin. Tens of billions of dollars in profits attested to the success of these firms, which created hundreds of Silicon Valley millionaires in the 1980s and 1990s.
UC Berkeley’s dean of the School of Information, AnnaLee Saxenian, calls the engineering-related professionals who founded and managed these enterprises the “new Argonauts.” Like the gold-seekers of 1849, they have been drawn to California’s universities and unsurpassed high-technology sector. “They are the best and brightest from places like India and China. . . . They have been marinated in Silicon Valley and learn how the start-up culture works here.” She says they either return to their Asian or Asian Pacific countries of origin and start their own companies, or remain active in the economies of their homeland and California. Intel’s CEO Paul Otellini, while an American, fits the “new Argonaut” profile in every other way. With an MBA from UC Berkeley, he oversaw the 1996 expansion of his microprocessing corporation into China, where he employed 3,500 workers, and later into Vietnam.
High earnings and career opportunities in Silicon Valley, however, did not go as readily to women as men. Carly Fiorina’s 1999 rise to president and CEO of Hewlett-Packard, the oldest and most revered Silicon Valley firm, came only after many other talented women, like her, had demonstrated that running a complex business was not solely within the province of males. Historian Glenna Matthews notes: “In 1970, women held 4 percent of professional jobs in the Valley and 0.5 percent of the managerial ones; in 1980, the figures were 17 percent and 14 percent, respectively.” By the 1990s a number of women had risen to the upper echelons of management in valley corporations.
Inspired by the Silicon Valley phenomenon, the Southland witnessed a proliferation of computer, electronics, and related businesses. Kingston Technologies, founded by Chinese immigrants to Los Angeles, showed sales approaching $1 billion in 1994. Its workforce numbered 300 employees. That same year some 1,200 Chinese-owned computer firms were operating in southern California. By 1997 Orange County’s Irvine Spectrum High Technology Park was home to offices of Western Digital, AT&T, Mazda Motors, Toshiba, and other firms.
In the late twentieth century California emerged as the world’s biotechnology leader. The new enterprise, located mainly along or near the Pacific Coast, served as a drive-wheel of the state’s nation-sized economy. By 2000 nearly 40 percent of America’s research and manufacturing in biotechnology was done in California, where the industry’s yearly earnings ranged between $6 and $10 billion. The Bay Area, the Los Angeles Basin, Orange County, and San Diego drew on close university connections to develop pharmaceuticals and related medical technologies that would advance health care. UC San Francisco set the pace by building a 43-acre biomedical research complex. In the Southland, Amgen, Inc., the world’s largest biotech company, operated out of Thousand Oaks, offering genetically engineered treatments for cancer, kidney disease, and osteoporosis while financially underwriting biotechnology research in some of the state’s universities. In 2000 Amgen’s sales reached $3 billion. UC San Diego, working with the nearby Salk Institute, became a leader in biotech research, as did UC Irvine’s Paul Mirage School of Business, which has served
As an incubator of numerous entrepreneurial biomedical enterprises. In 1997 Claremont’s Keck Institute of Applied Life Sciences was founded to provide graduate education for those pursuing biotechnology careers. UCLA, UC Santa Barbara, Caltech, and USC, similarly, engaged in research and teaching related to biotechnology.
Those employed in the biotechnology field exemplified what Claremont Graduate University management authority Peter F. Drucker called “knowledge workers.” They comprised the vanguard of highly educated employees of the new information-based economy that was eclipsing the traditional heavy manufacturing one. By late 1997 about 210,000 such professionals were employed in California’s booming biotechnology businesses. Their average salaries amounted to $50,000 a year. By then California had clearly become a Pacific Eldorado for scientists, entrepreneurs, venture capitalists, and others in the high-technology workforce.
Pacific Profile: Jerry Yang, Co-founder and CEO, Yahoo! Inc.
“New Argonaut” Jerry Yang (1968- ) was born in Taipei, Taiwan. His career trajectory in Silicon Valley’s computer industry dazzled onlookers before trailing off a bit. In 2009 Forbes magazine listed his wealth at $1.25 billion, ranking him 317th among the 400 richest Americans. His story embodies the California Dream of a Pacific-crosser of modest means, prodigious talent, and soaring ambition making a fortune and carving a niche in history.
Yang’s family emigrated from Taiwan to San Jose, California, in 1978, when Jerry was 10 years old. His father having died, Yang’s family consisted of his mother, his younger brother, and himself. Though his mother taught English, Yang claims that the only word in that language that he and his brother knew upon arriving in the United States was “shoe.” “We got made fun of a lot at first. I didn’t even know who the faces were on the paper money,” he remembered. “But when we had a math quiz in school I’d always blow everyone else away. And by our third year, my brother and I had gone from remedial English to advanced-placement English.” Yang graduated as valedictorian of his Piedmont High School class, where he had served as student body president. He was accepted at UC Berkeley, Stanford, and Caltech, and chose Stanford because it was closer to home and didn’t require him to pick a major in his first year of studies. There, he earned bachelor’s and master’s degrees in engineering while making financial ends meet by working part-time in the university library.
That useful employment taught him about how information was catalogued and organized using the Dewey Decimal System.
Yang was enrolled in a Ph. D. program in engineering at Stanford when he and fellow graduate student, David Filo, decided to start their own Internet search company in 1994-5. Taking an extended leave of absence, they launched Yahoo! Inc. “We started to make money almost from day one. . . . Our audience metrics never slowed down,” Yang recalled in 2005. By then Yahoo! was America’s leading search engine, and capitalized at nearly $48 billion. Filo ran the technical side of operations; Yang, as CEO, managed nearly everything else until several members of the board of directors complained about revenues not growing fast enough, which led to him stepping down and serving as a director himself. He remains the public face of Yahoo, while charting its course in “voice recognition” and other commercially viable innovations.
Yang married a Stanford engineering student of Japanese descent, Akiko Yamazaki. In addition to contributing millions of dollars to their alma mater, the two have been financial patrons of San Francisco’s Asian Art Museum, UC Berkeley’s East Asian Library, and the San Francisco Ballet.
Jerry Yang’s story remains unfinished. As a computer entrepreneur and philanthropist, his already noteworthy Pacific profile is still in the making.
World History
