Sean Randolph on Economic Development Challenges and Successes of the Silicon Valley Bay Area

Sean Randolph in this interview looks at the economic development of the Bay Area in California, U.S. and discusses how his earlier career in public diplomacy has helped him master the difficult tasks of bringing together and connecting stakeholders across the region.

Sean, as former President & CEO and currently Senior Director of San Francisco / Silicon Valley Bay Area Economic Council, you have witnessed the area’s impressive change and development over the years. To your mind, what does the region stand for today?

I’d say that, unquestionably, the region stands for innovation. It’s certainly not the only innovative place in the world, but the concentration and intensity of innovative activity here is remarkable. Whether you’re talking about scientific research, entrepreneurial activity, angel and venture investment, or out-of-the box creative thinking, the Bay Area is a place where many things happen first. The recognition of that is what draws so many companies and creative individuals to the region.

Has your view of the Bay Area changed since you first got involved?

Yes, my own view of the area has changed as the region has developed. The Bay Area has been an interesting place ever since the wide-open days of the Gold Rush. Even then it attracted people from around the world who were prepared to take big risks. But when I first came to San Francisco in the late 1980s it was not as interesting a place as it is now. It was beautiful, but more parochial and less international. Silicon Valley and the venture industry really got going in the 1970s but hadn’t spread across the region, and the scale of activity around innovation and technology wasn’t what it is today.

Things really took off in the mid-2000s with the digital revolution, when the Bay Area became the world’s center for digital innovation. If you believe that digitization will fundamentally affect virtually every industry, then you have to be where the cutting edge is happening.

That has drawn companies, entrepreneurs and investors at an unprecedented level, making the economic fabric here much richer and deeper, and more global.

To your mind, why does the Bay Area attract the kinds of people and activity that it does?

There are several reasons besides what I just mentioned. Great universities like Stanford, Berkeley, UC San Francisco (one of the country’s top bio-medical research campuses), and UC Davis (one of the country’s top research universities for agricultural technology) attract brilliant people from around the world. And so do the many national and independent laboratories that are located here.

Large successful companies like Google, Facebook, LinkedIn, Tesla and Airbnb do the same. Venture capital makes a difference too: the Bay Area has the largest pool of venture capital in the United States, where in recent years close to 50% of all the venture capital in the US has been invested. This attracts large numbers of entrepreneurs and company founders who are looking for capital that can’t as readily be found elsewhere. But part of the answer is intangible.

Culturally, the Bay Area is a very open, tolerant place that tends to attract free thinkers. It doesn’t matter who you are or where you came from: people just want to know what’s your idea and are prepared to open doors if they think it’s a good one.

What role does your organization play in attracting talent and investors?

The Bay Area Council is the region’s largest business-supported leadership organization. Its work focuses on issues relating to growth, competitiveness and the quality of life for residents in the region and on helping to make the Bay Area the most innovative, sustainable and inclusive place in the world, by addressing public policy issues that impact the vitality and competitiveness of the economy.

Collaboration and leadership are important because despite the region’s economic success we still have many challenges. The high cost of housing and inadequate public transport top the list, but there are others too. These are bedrock issues that have to be addressed, and the Council is active across the region and in our state capital Sacramento, working with public sector partners to address issues where having the right policies will be critical.

The Economic Institute is the Council’s research, analytics and strategy arm, and works closely with external partners to provide accurate information on the economy and help them understand what’s happening. Many of those partners are global, and the platform we provide helps them interpret the Bay Area and Silicon Valley for their governments and corporate headquarters.

Many invest here and bring entrepreneurs here, to set down roots. We’re not in the investment attraction or retention business, but the Bay Area has a uniquely strong story to tell and our information and services help communicate to audiences in California, the U.S. and around the world why it’s important to be here.

We also created and continue to support an organization of the region’s leading scientific research organizations – the Bay Area Science and Innovation Consortium (BASIC) – to provide a distinct platform for collaboration and communication to the region’s science community, which is large and incredibly important to our economy.

The board is composed of the vice-chancellors for research at the leading universities, the heads of the region’s federal labs or their deputies, the residents or directors of many independent laboratories, and corporate CTOs and head scientists. Enabling them to connect to each other and share priorities helps strengthen the region’s research system, and to occasionally influence policy and attract new funding.

Bringing stakeholders together and engaging them is often referred to as among the biggest challenges in place brand management. Do you agree?

Absolutely. The Economic Institute, for example, is overseen by an advisory board composed of leading business executives, the presidents or directors of the major universities, elected officials and the mayors of the region’s largest cities, the heads of regional government agencies, and other civic and research leaders.

All of them are visionary and focused, when they’re working with the Institute, on the region’s economic health and vitality and how to keep it competitive into the future. The fact that we can bring them all together for the kinds of conversations and initiatives that we have helps to focus the region’s leadership – public and private – on priorities.

The analysis we provide then gives them the information and ideas they need to make decisions together. The decision making is the hard part, because obstacles are piling up outside the door. But without having the key stakeholders in the room, our job would be much harder.

Earlier in your career you worked for government agencies at state and national level. How important are public diplomacy skills nowadays for economic development professionals?

I can’t overemphasize how important public diplomacy skills are in this kind of role. There will always be different economic and institutional perspectives, and even with the best goodwill companies, organizations and people usually don’t think alike.

The key for an organization like ours, I think, is to establish an environment of trust. Your partners have to believe that you’re professional, independent, open to ideas, and aren’t carrying water for anyone else. In the end, to get their engagement and support you have to be credible. That requires personal relationships, but also building a track record. It’s the same communicating with the public, which is also a constituency.

Don Dioko in his interview highlighted China’s ambition to position Hong Kong, Macau and Guangdong province as the country’s own Greater Bay Area. What advice would you offer to the Chinese, in terms of regional development and branding lessons learned – pitfalls to avoid?

The subject of a Greater Bay Area in China is an interesting one, since in some ways it’s inspired by the experience of the San Francisco Bay Area. The Chinese are thinking about this and we have a lot of exchanges. It’s hard to have a single template since the two areas are so different in their scale and assets.

But I’d say that efficient transportation is key. So is the ability to move people relatively freely around the region. That, of course, requires political cooperation across legal and jurisdictional boundaries, which is never an easy thing but is absolutely necessary for this kind of idea to succeed. Finally, I’d say that every region of this kind is unique, with unique assets to build on.

The San Francisco Bay offers a model for certain things, but not for everything. And in the end, it’s hard to replicate. So, every region – including China’s Greater Bay Area – needs to look at the assets that make it uniquely competitive and build from there.

What’s next for the Bay Area in terms of development – which trends do you observe?

Though there will always be economic cycles, I see the Bay Area continuing to be the world’s leading innovation hub for the foreseeable future. There will be many centers of innovation, of course, and the Bay Area will continue as a platform that helps connect them.

These external connections are important, since innovation is increasingly global and collaborative. Technology changes fast, accelerating, maturing and eventually becoming a commodity as new technologies come forward. The Bay Area has always succeeded in moving ahead to that next level, creating new industries in the process. As long as we  continue to do that, we should be fine.

Which financing and organizational model would you consider the most suitable for the development and brand management of an economic region like the Bay Area?

That’s a hard question to answer because there’s no centralized brand management agency for the region: it largely manages and sells itself. Organizations like ours work to ensure that it can continue to sell itself. Whether we should have an agency with a more promotion-oriented role is hard to say. We’ve debated it. But if something was to be created to manage and promote the region’s brand, I think it would need a structure that allows for shared public-private leadership, with engagement by key stakeholders and a mutual commitment of resources.

Which would you say is the biggest challenge that economic developers and those in charge of attracting talent and ideas are going to encounter in the next years?

The biggest challenge in the Bay Area is the cost of living, led by the cost of housing. The second challenge is traffic congestion and the growing lack of mobility. In the end they’re two sides of the same coin.

If you want to attract and retain talent they need to be able to afford to live here.

The reasons why the Bay Area is so expensive are complex. Some are purely the result of success: there’s lots of opportunity and a phenomenal quality of life, so people want to be here. Where there’s lots of demand things are expensive. But some of the reasons that housing is so expensive relate to our governance processes, where many oppose new development. Those issues can be resolved but will take time.

Thank you, Sean.

Connect with Sean on LinkedIn or visit his profile.

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