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Op/ed: It’s time for California to invest in innovation again by letting businesses grow


By Ernie Gutierrez on May 17, 2013

California has been the center of innovation for generations, from the first blue jeans maker to the booming high-tech industry that has evolved from chipmaker Intel Corp. to I-everything Apple Corp.

Think bold companies, creative entrepreneurs and out-of-the-box ideas, and most folks likely envision the Golden State.

One-time fledgling companies established in garages — such as Hewlett-Packard and Google ­— have become household names, hiring hundreds of thousands of employees with global operations.

And some of the best-known business leaders and entrepreneurs – such as filmmaker George Lucas, media executive David Geffen and social media master Mark Zuckerberg – built their companies and fortunes in California.

Quite simply, “innovation” is in our state’s DNA.

But California dreamin’ has become more like a nightmare for many businesses in recent years, with often-increasing red tape and some of the toughest regulations in the country.

Meanwhile, business-friendly states, such as Arizona, Nevada and Texas, are aggressively courting California with head-turning incentives.

Assembly Bill 653, the California Jobs and Innovation Act, is exactly what the state needs to return to its innovation roots.

The bill encourages businesses to invest their capital to develop and improve next-generation technologies while ensuring a well-trained work force. If approved, the bill would boost business, increase job growth and help jump-start the state’s sputtering economy — and provide jobs in California.

The proposal, by Assemblyman V. Manual Perez of Coachella, would encourage investment in innovation by doubling the research and development tax credit from 15 percent to 30 percent, exempt manufacturing equipment from state sales and use taxes, and offer companies a 25 percent work force tax credit for investments in post-secondary schools to develop classes and programs to improve job opportunities for students.

The California Jobs and Innovation Act would also formalize the I-Hub network for counseling and training to assist entrepreneurs in establishing and growing businesses here, using unoccupied or underutilized state properties.

The legislation has gained the support of many corporations and industries, as well as community leaders.

While there are many obstacles to doing business in California, this is one step we as a state can take to reward businesses that are willing to make investments in California — and create jobs. These investments in education and equipment lay the groundwork for our state’s economic future.

The legislation rewards businesses that are making investments in California – and creating jobs. In California, more than 700,000 Hispanic business owners are investing in their businesses.

It’s time for California to take a step forward. As we have seen throughout California’s history, investing in innovation is an investment that always pays off.

• Ernie Gutierrez is chairman of the California Hispanic Chambers of Commerce board of directors and president and CEO of Allied Industries, one of California’s largest Latino-owned businesses.