The Bay Area Council Economic Institute recently released a report entitled, “Europe and the Bay Area: Investing in Each Other,” which detailed the history of the economic connections between the two dynamic regions and the current state of affairs, including an assertion that trade between the two is strong and growing, despite the global recession and Europe’s slow recovery. Cross investment between the Bay Area and Europe is greater than with any other global region, the report says. As professional and creative networks increase within the context of these two intimately connected regions, a post-national innovation system has emerged which defies the boundaries of national or regional borders. After explaining the historical context for which Europe and the Bay Area have developed deep traditions of trade, the report outlines how Europe has become the Bay Area’s most significant global innovation partner, especially for R&D operations that have spurred innumerable breakthroughs in technology. Given this background, the report concludes with several policy proposals to further strengthen these economic ties.
The four policy proposals that the report expounds upon are: (1) negotiation and passage of the Trans-Atlantic Trade and Investment Partnership (TTIP); (2) immigration reform that enables European and other entrepreneurs from overseas to more easily start companies and stay in the U.S.; (3) regulatory streamlining to help entrepreneurs and investors from overseas more easily navigate California’s complex regulatory environment; and (4) better support for bi-national start-ups through deeper support in Europe and new U.S.-European models for start-up finance.
The report summarizes key issues related to the negotiations of the TTIP, including the complexities around agricultural markets and protections, intellectual property, banking rules, and the film industry, among other issues. They cite a study by the Atlantic Council which finds that a successful TTIP would support more than 740,000 new U.S. jobs, including an estimated 75,000 jobs in California. Additionally, successful implementation of a TTIP would increase California exports to the EU by 26%. The top sectors by export increase would be motor vehicles ($3.3 billion), chemicals ($3.2 billion), and metals and metal products ($1.3 billion). Business services, financial services, and certain manufacturing would lead for job growth.
In terms of immigration policy, the report highlights two particular areas of concern: caps on visas for high-skilled workers and the lack of a visa category geared specifically to start-ups. Various visa types and their limitations are explained in the report, mostly citing time limits as the main detractor for individuals to successfully establish new companies in the U.S.
The lack of coordination between federal, state, and local regulations causes higher costs for companies to conduct business, the report argues. Labor, commercial, environmental and other regulations come into play, and companies do not have a single point of entry or one-stop process for regulatory review and approval. Coordinating these various regulations could encourage more investment and innovation, and can be done at the state level through the Governor’s Office of Business and Economic Development (GoBiz), the report suggests.
Finally, the report describes how an emerging bi-national model of fostering entrepreneurial links can further spur economic development. The more initial entrepreneurial training and support that can be done in Europe will help European start-ups survive once they are situated in the Bay Area’s richly networked environment. Also, young companies in both Europe and the U.S. could be partnered at an early stage to encourage more access to cross investment.
For the full report, please visit: http://www.bayareaeconomy.org/media/files/pdf/BACEI%20BA-EU%20report4.14.2014.pdf
Tags: economy