October 20, 2012

Economists say it costs too much for Bay Area to have an economy

More complaints that living where it’s Special isn’t all rainbows and unicorns:

Bay Area’s business climate is less friendly to startups than other parts of California, says study

By George Avalos, Contra Costa Times
Posted:   10/18/2012 10:43:17 AM PDT, Updated:   10/19/2012 08:10:22 AM PDT

121019-jobstudy-downgraphRelatively expensive housing, coupled with the high cost of living and doing business in the Bay Area, has made the nine-county region less hospitable to new companies than other big urban centers in California, according to a study released Thursday that urges improvements in what it describes as this area’s burdensome regulatory climate.

“You have to ease the regulations that people face when they want to launch a new venture,” said Jon Haveman, chief economist with the Bay Area Council’s Economic Institute, which produced the report. “If somebody is trying to start a small business and spend a small fortune on a new home, they will probably start that business elsewhere.”

The Bay Area lags major rivals such as Los Angeles and San Diego in jobs created by startup companies, the study determined.

The strengths of the region are reflected in household income and other factors, the report stated. The region has increasingly specialized in high-value industries such as professional, scientific and technical services, along with information services and products.

121019-jobstudy-boromirSo what the Institute is complaining about is it’s difficult to start cheap-ass startups where it’s expensive?  That isn’t a bug, that’s a feature.  If it’s expensive to live here, it should be expensive to work here. Besides, if you need money for a lower-capital startup, you should sell one of your vacation homes, or write put options for what’s under all the couch cushions at your furniture factory.

The article waits until graf 7 to admit there’s no problem with the Bay Area job market after all. Actual quote from report: “The Bay Area economy is one of the most productive and prosperous in the country.”  Sounds awful. Then again, engineers are being bought and sold like excess office furniture by a Bain Capital-funded startup, which decided staying in business was too much trouble.  The buyer?  Apple.

We swear we are not making any of this up.  Let us know of your ease or difficulty in starting a business in the Real Bay Area (summary: 90% say it’s Special here even though it’s expensive. So?)  Or read the full 68 page report yourself, and comment on it before falling asleep.  Or discuss anything you wish in this Weekend Open Thread.


Comments (2) -- Posted by: madhaus @ 5:09 am

2 Responses to “Economists say it costs too much for Bay Area to have an economy”

  1. Mole Man Says:

    This reminds me of Sebastien Paquet’s series on How Social Movements Happen:
    … The long-running homogenizing effect of culture means that everyone now carries the same assumptions about the external world that were instrumental to the efficient success of the system in its early days.

    The problem that hits the system now is that conditions have changed in such a way that those assumptions are no longer warranted. …

    then the process continues
    … The emergence phase (#4) saw the free radicals made themselves known. In the hollowing out phase, a new category of people, which we will call the aesthetes, begin jumping ship.

    These people are the seekers of quality. They gave the system a chance, but early on in its decline, usually without anybody else telling them, they recognized that something was amiss. They have a good nose for staleness, and they can’t bear the stink. …

    So what is next, or perhaps more to the point, where to next? The Central Valley has low regulation, cheap housing, and is poorly defended, but the air is bad and it is full of meth heads and bridgeless trolls. LA is a mess, but the weather and tacos are good. Perhaps it is time for Santa Rosa to convert to RBA? Austin and Las Vegas are right out, and Boston is gross and mean, so cross all those out. Maybe some kind of crisis would give the RBA etch-a-sketch a good shake similar to what happened at the turn of the millennium? Or perhaps nothing ever really changes? Keep Calm and Code.

  2. james Says:

    You gotta pay to play if you wanna stay in the RBA.

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