It isn't raining rain to me, It's raining daffodils 

(April Rain by Robert Loveman)

Daffodils are abloom in the North Bay.  What else is blooming?  Maybe if we look for promising signs we will find more than we expect.

GDP Up:  According to the Federal Reserve of San Francisco's Janet Yellin, "Real gross domestic product, or GDP, the broadest measure of a country's total output, has turned around impressively. It rose at a robust 5.7 percent annual rate in the fourth quarter of 2009. That's a very welcome change from the huge declines we saw during the recession. In fact, it's the best gain in GDP we've seen in six years. If we were able to sustain growth like this, we would experience a vibrant V-shaped upswing like those that occurred following past severe recessions.

Job Losses Slowed:  The pace of job losses has slowed dramatically and some indicators, such as gains in temporary jobs, suggest that we may be close to a turnaround in the labor market. The unemployment rate dropped from 10 percent to 9.7 percent in January. Since the stimulus bill was passed, the number of jobs lost in the US has decreased significantly-from 741,000 jobs lost last year to 21,000 jobs lost during the same month, according to Speaker Nancy Pelosi. Asked about California's high 12.6 percent unemployment rate, Pelosi noted that the state has its own significant budget challenges, but is getting relief from the recovery act totaling nearly $90 billion that has either been distributed or allocated.

Marin's 8 percent unemployment rate is still the lowest in the state.

Productivity Up:  The economy produced roughly the same quantity of goods and services with 4 percent fewer workers, which translates into a 4 percent increase in output per worker. That's a huge rate of productivity growth, well above estimates of the long-term trend in productivity gains that stem from such factors as improved technology.

Dollar Up:  The dollar leapt to nine-month highs on Friday after the US Federal Reserve took a big step towards unwinding its massive economic stimulus program.

Federal Reserve's Confidence Up:  In a sign of the Fed's increasing confidence in the strength of the US economic recovery, the discount rate was raised by a quarter of a percentage point to 0.75 per cent - above the benchmark Fed funds rate.

Health Indicators Up:  Sonoma County residents were determined to be the most happy and healthy in the state and ranked fifth overall in the nation. According to the Gallup-Healthways Well-Being Index, Sonoma County residents rated themselves highly in healthy behavior and work satisfaction. 

In Marin County, a study by the University of Wisconsin's Population Health Institute and the Robert Wood Johnson Foundation that ranked the health of every county in the nation, found Marin to have the best overall health of any county.  Marin outperformed the state average in healthy behaviors such as not smoking and exercise.

Sutter Medical Heart and Vascular Center in Santa Rosa has been ranked in the top 10 percent of hospitals nationwide for cardiac surgery, according to HealthGrades, an independent health care rating organization.  The hospital is also the only one in the North Bay to receive the distinction of being ranked among the top five hospitals in California.  HealthGrades gave Sutter a five-star rating for valve replacement surgery and for the treatment of heart failure.

Home Builders More Bullish:  Housing Pricing Rising in the Bay Area:  Los Angeles, Phoenix, San Diego and San Francisco have seen price increases for at least six consecutive months. The big one is that Dallas, Denver, San Diego and San Francisco have entered positive territory, something not seen in at least two years. Although this data does show that home prices are more stable than a year ago, it's not a sign of broad-based recovery.

Drought Over:  Marin Municipal Water District's reservoirs are 92% full.  Lake Mendocino and Lake Sonoma are over 100% full, ending the drought that the North Bay has been experiencing in recent years. 

New Jobs:  BioMarin had a ribbon cutting on its new $60 million manufacturing facility in Bel Marin Keys, a move that doubles its manufacturing capacity, according to CEO Jean-Jacques Bienaime. The company will be hiring 40 to 50 people to staff the new facility, upping its head count from its current 730, he said. This company is the bright light in the North Bay, adding employees throughout the Great Recession.  Not only are they making drugs that save lives, they are now the economic engine that will save Novato. 

Reinforcing BioMarin's success is report released by the California Healthcare Institute (CHI) and PricewaterhouseCoopers LLP (PwC) that shows the biomedical industry is one of the most recession-resilient sectors in California's hard-hit economy and a critical driver of innovation, job growth and revenue that will help lead the state to economic recovery. 

Key findings of the survey are:

• Over the past year, nearly two-thirds (64%) of California biomedical companies either maintained or expanded their workforce, while other parts of California's economy saw steep declines and the highest unemployment levels in three-quarters of a century.
• Over the next two years, 81% of biomedical companies expect to maintain or increase their workforce in California.

• Two-thirds of biomedical companies also expect to increase their out-of-state manufacturing workforce over the next two years.  More than half (58%) anticipate expanding their research and development workforce outside of California.

Survey respondents rated how key issues will impact future growth:

• Asked about the impact of issues on the industry's ability to keep biomedical research, innovation and investment in California, respondents ranked the following as extremely important: corporate taxation (72%), tax incentives for innovation (69%) and workforce preparedness (62%).
• Asked about the greatest threats to the industry's growth in the next five years, respondents rated the following as extremely important: price controls/government intervention (88%), a risk-averse US Food and Drug Administration (84%), intellectual property protections (56%) and access to capital (52%). 

Currently, California is home to the largest concentration of biomedical companies in the world.  California's biomedical industry directly employs 274,000 people, representing one in six of the 1.6 million biomedical jobs in the United States, according to PwC's analysis of Bureau of Labor statistics and company-specific filings with the Securities and Exchange Commission.  The industry supports more than 750,000 direct and indirect jobs statewide and is the second largest sector of California's high-tech workforce.

Innovation Up:  The Sonoma Mountain Business Cluster was named by the state Business, Transportation and Housing Agency as one of six Innovation Hubs in California to spur new the creation of new jobs. The cluster currently houses 17 companies focused on innovation, and clean and green tech. Collaboration was key to winning the designation, which will eventually lead to state and federal funds.

Public and private collaborators include Sonoma State University, the cities and chambers of commerce of Santa Rosa and Rohnert Park, the North Bay Angels investment group, the Marin Economic Forum, the Sonoma County Economic Development Board and the Small Business Development Center at the Santa Rosa Junior College.

The purpose of the iHub program is to promote regional collaboration and commercialization of technology to stimulate job growth. The cluster will act as a regional center to collect information and support innovative tech companies. Michael Newell said, "This takes the issue outside political boundaries and broadens its reach. Regional hubs are attractive targets for both investment and businesses looking to relocate. The BTH will be forwarding inquiries to us from out-of-state companies, and what better place to launch a California branch than the North Bay? It has everything."

Business Confidence Up:  The Sonoma County Economic Development Board latest Business Performance Index for Sonoma County showed a positive increase from the summer rating.  This is the first positive estimate of local business confidence since fall 2007.  The index for the winter months increased 9.6 percent from summer 2009 to 5.63.  The report stated, "More than seven out of 10 surveyed executives reported expectations that the holiday retail season for local businesses was improved or unchanged from a year ago."

Energy Independence Up:  Sonoma County Energy Independence Program (SCEIP) was awarded $2,537,000 in State Energy Program funds from the California Energy Commission. The grant will help pay for home energy audits and enhanced water conservation efforts as well as leverage additional funds.

The Sonoma County Regional Climate Protection Authority received $1,195,000 as a partner in a regional residential State Energy Program proposal led by the Association of Bay Area Governments (ABAG), through their Retrofit Bay Area program. The money will support energy-efficiency home retrofits for the new Countywide Retrofit/Renewables Program, set to launch in April. It will partner with existing providers and programs to complete retrofits.

Retrofit Bay Area is expected to create 1,739 jobs, retrofit 15,000 single-family and 2,000 multi-family homes, and reduce annual purchased energy consumption by $6.7 million.  This program is expected to have a total economic impact of more than $170 million.

New Contracts:  Zap, the electric car distributor, has won a contract to build an experimental battery-powered mail van for the U.S. Postal Service according to The Press Democrat . It's one of five U.S. companies chosen to submit a prototype, which could lead to mass conversion of gasoline-powered mail vans to electricity. Mail vans are ideally suited for plug-in power, Zap founder Gary Starr said, "This is the perfect application for electric cars." Zap could add hundreds of workers if the Postal Service chooses it to convert large numbers of vans, Zap CEO Steve Schneider said. The company has 40 employees at its Santa Rosa headquarters and about 50 at other locations.

Representation in the President's Administration Up:  Dr. Eduardo M. Ochoa Provost and Vice President for Academic Affairs at Sonoma State University, has been selected by the White House as a nominee for the position of Assistant Secretary for Postsecondary Education (OPE).  "Dr. Ochoa has been a tremendous asset as in regard to policy making and administration. His dedication to higher education and his academic administrative talents have earned well-deserved recognition by President Obama and the White House," says Ruben Armiñana, President of Sonoma State University.

As Provost and Vice President for Academic Affairs, Dr. Ochoa is responsible for all the University's academic programs, University strategic planning, its overall diversity initiative, and Sonoma's role in the CSU Graduation Initiative which aims to raise system-wide graduation rates. As a member of the CSU Academic Council, Dr. Ochoa contributes to the CSU's academic administration and plays a significant role in system strategic planning and academic technology initiatives. "Dr. Ochoa has made significant academic contributions to the CSU, and his experience and background will be a valuable asset to the Department of Education and their work on higher education," says Charles Reed, Chancellor of the California State University system.

The Office of Postsecondary Education (OPE) formulates federal postsecondary education policy and administers more than 40 programs that address critical national needs in support of its mission to increase access to quality postsecondary education. Notable among these programs are the Fund for the Improvement of Post-Secondary Education (FIPSE), the TRIO programs such as Upward Bound and McNair Scholarships, and many other programs that support institutional development and undergraduate education, international education, and teacher and student development.

From the Bing Blog, We Learn Why Bad News Leads

In the January 6, 2010, post on the Bing Blog, Stanley Bing of Fortune Magazine's Blog, he explains why the media seems hell bent to wipe the smiles off of our faces when we get some good news.  Bing says that there are four "hairy issues" we need to solve:  Unemployment, Regulation, Debt and Doubt.  I found his write up on Doubt very compelling:

"Doubt: Yesterday there were very good economic numbers coming out of a variety of sectors. It doesn't matter what they were. By the time you read this there will be other numbers.

What's interesting is that with every positive number comes a bunch of miserable, sackcloth and ashes dudes to rain on our parade. The newspapers are staffed by people in a business that believes it is dying. They are very depressed. They want everybody to be. The Internet is made up of aggregators who pass along that dyspeptic vision and add a little of their own underpaid misanthropy.

They all listen very carefully to the security analysts whose job it is to enable the dreams and fumes that fuel the investment business. Many of those make money betting against things. There are always inclined to believe the sky is falling. Actually, it usually is. But only during certain times in human history do people listen to those who constantly talk about it.

I'll tell you a little something. The business that I'm in has been considered a leading economic indicator for 50 years. Three years ago, the bottom started to fall out. It was pretty scary, I can tell you. This was almost 18 months before the worst of the recession hit. Today, the business is growing, in some places in the double digits, other places more slowly, but quite definitely. Pacing is up.

This speaks to a recovery in both the national and local economies that drive what we do. Virtually every article that I have read in the last two years was wrong about anything I know a little bit about. I can't tell if they were wrong about the stuff I don't know about, but perhaps you have some idea about that in your own area of the econo-sphere. So why do we listen to these people?"

Pension Reform Can't Wait

As the State of California moves quickly towards insolvency, the need to reform the state and local governments' pension plans becomes urgent.  These massive unfunded liabilities for public pensions and retiree health care are pushing these governmental agencies deeper in debt.  According to a brief written by Joe Nation, director of the Stanford University graduate student practicum in public policy, initial data shows "there is potentially an enormous, and I think, insurmountable shortfall for the pension system over the next 30 years... we're in the hole far deeper than we thought." How deep?  Conservative estimates are $237 billion - and perhaps double that amount.

David Crane, special advisor to Gov. Schwarzenegger for jobs and economic growth agrees, "Most of the money that pays for pensions comes from investment earnings, but if those earnings are overestimated, as our pension funds have done for decades, then you are left with a huge deficit."  To meet the investment yields that CalPERS assumes, the stock market would have to double every 10 years.

The Governor states the problem succinctly, "No single issue threatens the fiscal health of this state more than our exploding pension obligations.  Over the last 10 years, our pension costs have gone up by 2,000 percent from $150 million per year to $3 billion a year (for state government workers).  That means hundreds of billions in unfunded liabilities and it means the $3 billion we are spending nor will go up to $10 or $12 billion."

According to CalWatchDog, "Since 1999-00, the number of state employees has grown from 296,076 to 356,435.  During the same period, total state government spending, including federal funds, nearly doubled from $122 billion to $222 billion.  Meanwhile, the number of public employees in California collecting $100,000-plus pensions has skyrocketed from about 2,500 in 2004 to 15,000 now."

No matter how bad the state is financially, by law, the state cannot declare bankruptcy.  That is not true for the counties and cities.  David Crane says, "Local governments are going to face incredibly draconian choices -- shutting down parks and not hiring policemen." The talk of bankruptcy is being heard in cities and counties throughout the state.

In response to the pension crisis, the California Foundation for Fiscal Responsibility is gathering signatures on two initiatives that would require non-public safety employees to work until their Social Security age for full benefits and end pension abuses.  Foundation president Marcia Fritz says, "CalPERS chief actuary, the state treasurer and the governor are all saying Mayday, Mayday - We have to make changes or the pension system will not be sustained."

BEYOND GREENWASH:  Realizing Profitability through Authentic Sustainable Business Practices

by Edward Quevedo, JD, Palidin Law Group

On March 19, Ed Quevedo will speak to the Marin Business Environment Alliance, a new partnership of North Bay Leadership Council, Marin Conservation League and Dominican University's Institute of Leadership Studies.  His discussion of "Beyond Greenwash" promises to be topical and informative.  The following is an opinion piece written by Mr. Quevedo for the Marin Independent Journal. Details of the event follow after the article.

In 1972, the United Nations and the Club of Rome convened the Stockholm Conference (see http://www.unep.org/) to explore the emerging data that showed environmental degradation inevitably followed significant economic development in the developed world as well as in emerging economies.  That Conference coined the phrase Sustainable Development.  Fifteen years later, UNEP published the Bruntdland Commission Report, Our Common Future, which put substance and policy to the emerging discipline of Sustainable Development.

Now, fully 38 years later, the term "sustainable" and "green" have become common parlance, and virtually every business, product, city and consultant you can name is keen to convince you that they are and have always been green.  These "green claims" are now ubiquitous, from Green Buildings to Green Tech to Green Products.  We are awash (pardon the pun!) in green claims from businesses, cities, and other organizations.  And, as so often accompanies such "trends," the terms Green and Sustainable have begun to lose their meaning in this storm of green marketing.

It is becoming impossible to distinguish the authenticity or validity of these green claims by businesses.  But there are clear techniques to separate what I call the "Liars" from the "Sages." 

First, what is the vintage of their claims?  If the company, organization, or product has been involved in a consistent effort to measurably portray their "greening" or sustainability performance over a protracted period of time (e.g., the work of InterfaceFLOR, Patagonia, etc.), there is a greater likelihood that there is substance to their green claims. In this context, sustainability begins to approach our ideas of product quality, including a mandate for building products and working with processes that cause the least harm to the environment.

A company that evaluates the raw materials it uses, invests in innovative technologies, rigorously polices its waste generation, and uses a portion of its sales to support groups working to meaningfully educate the public on sustainability issues, more likely than not backs their green claims with substance.  Short of these kinds of substantive supporting steps, green claims are likely hollow.

Second, do the green claims go beyond carbon reduction and environmental issues?  Sustainable Development is grounded not on environmental or ecological issues, but on balanced decision-making.  The fundamental duty of the entrepreneur and the manager is to use all resources at their disposal with maximum effectiveness, responsibility, and efficiency.  This applies to the so-called "triple bottom line" of human capital (the work of people, the realm of ideas and innovation, etc.), natural capital (use of water, pulp, metals, and other materials extracted from nature), and financial capital. 

Green claims, to be substantive and legitimate, must not only relate to environmental responsibility, but must also acknowledge these broader corporate citizenship obligations of large corporations, medium sized companies, and small businesses to conduct their operations to as to benefit society in general first, as a predicate to bringing profit to their investors.

Third, another problem with green claims is the fact that most self-promotion based on the triple bottom line simply misses the point. Properly operated, business enterprises have a public duty to not only minimize the harm they cause to Nature and people, but to provide net benefits to their stakeholders, shareholders, and others affected by their operations. 

I refer to this, as does William McDonough, as the Triple Top Line.  Companies making green claims that acknowledge their obligations to return more to Society and Nature than they take, and prove it by providing measures of Triple Top Line "profits," deserve our support and investment at true innovators and responsible businesses.  And the data is clear that such firms reliably outperform their competitors financially (see, e.g., the ranking by HIP Investor at http://www.hipinvestor.com/).

In the end, we need some new grammar.  As I have said, Sustainable Development is rooted in notions of minimizing the harm we do today so as to provide the possibility that future generations can thrive.  Today, I would strongly argue that Sustainable Development is just, well, so yesterday. 

In our law practice at Paladin Law Group^® LLP, and in the MBA Program in Sustainable Enterprise at Dominican University (the Green MBA^®),  we focus our attention and the transformation of executives, enterprises, and ultimately the world of business on Regenerative Enterprise.  Simply stated, the Regenerative Enterprise makes decisions, manufactures products, provides services, constructs buildings, and undertakes all of its dealings only after developing clear means to ensure that these activities will, over the medium and long term, enhance the financial, social, and ecological well-being of all communities of interest they affect.

This is the future course of business.  And there are billions of dollars of profit, and immeasurable positive reputational benefits and competitive advantage, to be unlocked by this Regenerative Enterprise value proposition.

Marin Business-Environment Alliance Breakfast

Friday, March 19, 7:30 a.m.-9:00 a.m.

Creekside Room, DOMINICAN UNIVERSITY (Magnolia and Palm, San Rafael)

It is now common knowledge that sustainable business practices make good business sense, but how can we distinguish those that claim to be green and sustainable from those that truly are?  Both business people and environmentally-conscious consumers will benefit from Ed Quevedo's extensive experience working with businesses at all levels in separating sustainable intent from authentic and cost-effective results

Ed Quevedo, JD, is Senior Counsel and Chair of the Sustainability Practice Group at Paladin Law Group and serves on the faculty of the Dominican University School of Business & Leadership MBA Program in Sustainable Enterprise (the Green MBA®). He is also the Faculty Chair of the Executive MBA Certificate Program in Sustainable Enterprise within the Green MBA® Program. During his legal career, Mr. Quevedo has argued cases before the California Supreme Court, the International Board of Arbitrators in The Hague, and the  European Court of Justice. An engaging and dynamic speaker, Mr. Quevedo has lectured on environmental management, applied ethics, sustainable development, corporate responsibility, and sustainable business practices at various universities, including the Haas Business School at the University of California, Berkeley; Tulane University; Lund University (Sweden) and the Graduate School of Business at Stanford University.

Tickets are $25 and include full breakfast.

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For more information, contact NBLC at info@northbayleadership.org or 707.283.0028

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Members in the News

Infineon Raceway and NASCAR donated 30 trees through NASCAR's Green Clean Air program, which is to neutralize 100 percent of carbon emissions produced by racecars competing in track events to Petaluma Junior High School.  Infineon's President and general manager, Steve Page, said, "This is a terrific new initiative from NASCAR and we're delighted to participate.  We look forward to watching the trees grow and becoming part of the campus environment."

Kaiser Permanente has been honored in Fast Company's annual Most Innovative Companies issue as the fifth Most Innovative Health Care Company in the world for its pioneering electronic health record that is the world's largest civilian electronic health record, and for its health care innovation center that develops the future of health care.  "This recognition is emblematic of a culture and spirit at Kaiser Permanente that enables the transformation of health care," said Kaiser's CIO Philip Fasano.

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