“Tech companies in San Francisco and San Mateo counties lost 700 jobs from January to February and tech employment has dropped by 3,200 jobs since hitting a peak last August,” the New York Times observed, citing chief San Francisco economist Ted Egan. “Venture capital has peaked and has been going down steadily since 2015,” said Egan. “A lot of the employment in our tech sector is in companies that are not profitable. If they can’t secure new venture funding, some of them run out of cash. If we see a real downturn in the tech sector we could be in a situation where the U.S. economy is doing better than San Francisco’s.”

For months, Bay Area businesses and investors have had to adjust to unfamiliar economic terrain. “The drop continues a year-long slowdown of the economic machine that powers Silicon Valley’s tech sector, leaving some startups resorting to layoffs and other cost-cutting measures to make ends meet,” the San Jose Mercury News reported. “But analysts say they’d better get used to it — investment activity isn’t going to return to the highs the industry saw in 2014 and 2015 any time soon. Instead, they say, the lower numbers represent a new, more sustainable normal as investors become more selective.”

High stakes

The Valley’s outsized importance to California’s economic fortunes has shifted expectations for tech nationwide. “Nationwide, the number of angel and seed stage funding rounds — which generally mark a company’s first fundraising efforts — dropped 62 percent in the first quarter of 2017 compared with the first quarter of last year,” the Mercury News noted. “Though startups closed fewer funding deals, the amount of money investors spent actually ticked up in the first quarter of this year compared to the quarter before — largely thanks to Airbnb raising $1 billion this year, and Instacart and online personal finance company SoFi each raising more than $400 million. Smaller, early-stage startups suffered most in the slowdown.”

But larger, established tech firms have encountered new problems, too — including fierce challenges in potentially huge markets, like the one for driverless cars, that are now crowded with heavyweight competitors. “Google’s lawsuit alleging that Uber straight-up stole its autonomous vehicle technology won’t go before a jury until October, but Uber already finds itself on dangerous ground,” according to a Wired report on the conflict. Last week, the magazine observed, “the judge presiding over the civil case said he might just grant Google’s request for a preliminary injunction, which could force Uber to rein in or even stop testing its robocar technology testing until the case is resolved.”

Pumping the brakes

Prognosticators have altered their outlook accordingly. “Extrapolating from Q1, the full year 2017 is on track to hit the lowest level in terms of dollars since 2012, and in terms of deals since 2011,” Business Insider noted. “But it’s not for a lack of money. In 2016, VC funds raised $41 billion, the best year in a decade. In Q1 2017, they raised another $7.9 billion.”

According to some analysts, the combination of big war chests for funds and more modest pathways for founders was likely to translate into slower but more sustainable growth. Eric Buatois, veteran venture capitalist at Benhamou Global Ventures, told Marketplace that while a crash was unlikely, a cooling-off period would probably help avoid a hard landing. “Like most people in Silicon Valley, Buatois doesn’t use the words ‘tech bubble’ or ‘bust’ when describing the recent tech economy. Instead, he describes it as ‘frothy,'” according to the program. “‘Froth’ is the Silicon Valley term for when startups are valued at much more than they’re worth. Unlike a bubble, froth doesn’t pop — it subsides. Buatois thinks that could be a good thing for Silicon Valley.”

Mr. Issa goes (back) to Washington

Good morning. Happy Tuesday. The Associated Press projected winners in two of the last and most high-profile races in the state: Rep. Darrell Issa, R-Vista, and Josh Newman, a Democrat who was elected to the state Senate.

Issa was sent back to Washington for his ninth term after squeaking through what was easily the toughest race of his career. He been a constant thorn in the side of the Obama administration in recent years as chair of the House Oversight and Government Reform Committee — a position he recently rotated out of — and had just a 2,348-vote lead as of Monday afternoon. 

Newman’s name is likely not too familiar to most readers, having no prior political career. But his victory over Republican Assemblywoman Ling Ling Chang officially gives Democrats a two-thirds supermajority in the Legislature. In other words, free rein.

Here’s more on what the supermajority means — and doesn’t mean. 

In other news:

• “The presidential campaign focused some attention on the long-simmering debate over policing and the appropriate uses of force, but as is typical with national campaigns, the nuances got lost amid ideologically charged soundbites such as ‘law and order’ and ‘Black Lives Matter.’ Some advocates for police reform worry about what a new Trump administration will mean for these discussions given the president-elect’s expectedly different approach toward the matter than President Obama’s Department of Justice. But others argue the election will send reform back to where it really belongs: at the local level.” CalWatchdog has more. 

• “Critics of Wells Fargo’s scandal are raising questions about why the California Public Employees’ Retirement System — which for three decades has demanded that corporations it invests in must operate under a clear ethical code — didn’t question illicit banking practices by the San Francisco-based banking giant that were first revealed in 2013 and which resulted in huge federal sanctions in September.” CalWatchdog has more. 

• “Silicon Valley entrepreneur Steve Spinner hopes the end is near for one of Washington’s most abhorred rituals: the daily rounds of fundraising calls by elected officials trying to fill the coffers for their next campaign. He thinks it can happen with an algorithm that improves targeting, and reduces time candidates spend casting around for cash.” Politico has more. 

• The Sacramento Bee explains “How California became a blue state.”

Legislature:

• Gone till December. 

Gov. Brown:

• No public events announced. 

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @BinduMedia

Democratic supermajority in Legislature

Good morning. Happy Tuesday, also known informally around the CalWatchdog newsroom as “Almost Thanksgiving.” We have a bit of breaking news this morning: Democrats appear to have achieved a supermajority in the state Legislature.

The linchpin is one Southern California Senate district, where Republican Assemblywoman Ling Ling Chang had held a narrow lead over Democrat Josh Newman in the race to replace the former Senate Minority Leader Bob Huff, who is termed out. 

But Chang’s lead dwindled daily. On Monday it was less than 200 votes. This morning she trails Newman by more than 800 votes.

We wrote about the importance of this race yesterday. 

In other news:

• Pension costs: “There’s bad news coming down the pike for California municipalities following several days of board meetings for the nation’s largest state-based pension fund. Although no action has been taken, it’s clear the California Public Employees’ Retirement System, or CalPERS, might again lower its expected rate of returns on investments. That means cities and other member agencies would have to pay more to make up the shortfall.” CalWatchdog has more. 

• Calexit: “Supporters of a plan for California to secede from the union took their first formal step Monday morning, submitting a proposed ballot measure to the state attorney general’s office in the hopes of a statewide vote as soon as 2018.” The Los Angeles Times has more. 

• More Calexit: Most “Calexit” advocates do not note how legally difficult the process of secession is. In 2006, the late Justice Antonin Scalia wrote: “I cannot imagine that such a question could ever reach the Supreme Court. To begin with, the answer is clear. If there was any constitutional issue resolved by the Civil War, it is that there is no right to secede.” CalWatchdog has more. 

• Trouble in Silicon Valley: “When it comes to working with the Trump administration, Silicon Valley finds itself in a bit of a bind: It needs to mend fences with an incoming president it derided, without stirring up liberal employees and netizens,” writes The San Jose Mercury News. 

Legislature:

• Gone till December.

Gov. Brown:

• In Modesto for the memorial service of Stanislaus County Sheriff’s Department Deputy Dennis Wallace. 11 a.m., CrossPoint Community Church, 1301 12th st.

Tips: matt@calwatchdog.com

Follow us: @calwatchdog @mflemingterp

New follower: @MahmoudAbuAish

Despite a broad trend toward increasing skepticism and opposition around capital punishment, California’s ballot initiative ending the practice faces a steep climb heading into November. 

The Institute for Social Research at Sacramento State University, through the CALSPEAKS public-opinion project, found that respondents “opposed Proposition 62, which would end the death penalty in the state, 45-37. All other propositions in the poll had comfortable support,” KPBS noted — a dual anomaly, given Californians’ history of generally sinking ballot measures instead of voting them through. 

The numbers cut against a persistent U.S. trend in public opinion away from the death penalty. “A Pew Research poll published late last month revealed that only 49 percent of Americans now favor executing murderers, a seven-point decline from March 2015,” the Marshall Project observed. “Those poll numbers may reflect growing public concern about botched executions, the high costs of operating death rows, and the suspicion that states may have executed innocent people.”

A unique decision

California was not the only state to prompt a referendum on the practice. “Meanwhile, voters in Nebraska will be asked whether they want to reinstate the death penalty and Oklahoma residents will decide whether to make it harder to abolish it,” according to the Associated Press. Last year, the Nebraska Legislature scrapped capital punishment, raising questions about whether voters would have done the same; Oklahomans saw a freeze in executions after two consecutive errors.

“The votes for the three states come amid an evolution for capital punishment in the U.S. Executions have mostly been in decline since the turn of the century and last year reached their lowest level in 25 years, with 28 prisoners killed. Capital punishment has been either legislatively or judicially repealed in eight states since 2000,” the wire noted, citing Robert Dunham, executive director of the Death Penalty Information Center.

But dueling measures made it onto California’s ballot this year, driving financial backing from rival groups. Silicon Valley has shaped up to be the champion of the ban, while law enforcement organizations have lined up against it. “Stanford Prof. McKeown tops the list of donors to Proposition 62, followed by Netflix CEO Reed Hastings, Mr. Graham, and Laurene Powell Jobs, widow of the former Apple Inc. CEO.,” the Christian Science Monitor reported. “Their support, totaling $4.2 million, puts them in opposition with Proposition 66, another ballot initiative that seeks to speed up the death penalty system. The latter is supported by many police associations, prosecutors and sheriffs, and has contributions totaling $4.3 million.”

Mobilizing former inmates 

Support for Prop. 62 has focused around the kind of flaws apparent in Oklahoma, rather than the more abstractly principled objection to capital punishment that has traditionally driven political activism. “In the nearly 40 years since California revived the death penalty, executioners at San Quentin have put 13 convicted murderers to death,” the Los Angeles Times editorialized. “But were they all truly the ‘worst of the worst’ of the state’s killers? Were they all even killers? There’s a strong argument to be made that at least one of the executed inmates, Thomas Thompson of Laguna Beach, may, in fact, not have been guilty of murder.”

California has also attracted outside opponents to capital punishment. Juan Melendez, an ex-death row inmate, visited the Thomas Jefferson School of Law in San Diego to level a far broader kind of criticism than Prop. 62’s supporters have typically offered. “People need to know that it is racist,” he said, according to U-T San Diego. “People need to know that it costs too much. People need to know it does not deter crime. People need to know that it’s cruel and unnecessary. We have alternatives!” In Los Angeles, meanwhile, other former inmates pressed the issue with a religious audience. “Death row exonerees Nate Fields and Sabrina Butler joined a diverse group of faith leaders to talk about the importance of ending California’s death penalty during an interfaith breakfast hosted at Holman United Methodist Church,” the L.A. Sentinel reported.

Despite a major shift in its construction strategy, newly anticipated budget overruns hit California’s beleaguered high-speed rail project, as citizens and lawmakers mounted fresh challenges to the scheme.

“California High-Speed Rail Authority employees are warning of possible cost overruns on the first segment of the bullet train, not long after construction began,” according to the Associated Press. “Finance officials told rail board members Tuesday that the project could need another $150 million for the first 29-mile segment near Fresno. In all, that could push contingency costs $260 million higher than the board already has approved for the entire first section.”

The news marked another frustration and potential embarrassment for rail officials, who had recently upended their years-long plan to begin construction in Southern California. Belatedly discovering that tunneling the train’s way into and out of Los Angeles could grind progress to a virtual halt, they quickly pivoted to a plan that would start laying the train’s path in and around Silicon Valley.

Shifting gears

“The Caltrain commute line between Gilroy and San Francisco is poised to get an early infusion of cash to help pay for its $1.7 billion conversion to electric power,” the San Francisco Chronicle noted. “That conversion is essential for high-speed rail. Plus, the South Bay, Peninsula and San Francisco constitute a huge potential market for bullet trains. A promise of early Bay Area service could build political support for the overall system and attract private investment that is badly needed to build out the $68 billion rail line.”

Yet state officials announced that the Silicon Valley starting point would enable them to connect travelers with the Central Valley for less than the original $68 billion. “In an updated draft plan for the rail line that will whisk passengers from Los Angeles to San Francisco in under three hours by 2029, the California High-Speed Rail Authority revised downward the cost of the entire line, to $64.1 billion from nearly $68 billion,” Reuters observed. The new budget anticipates nearly $3 billion “in additional funding from the federal government,” with San Jose linking up to Kern County “by 2025.”

Legal challenges

Even the altered scheme has returned the rail authority to familiar territory: court. On the heels of “more than a dozen” lawsuits, the Los Angeles Times reported, officials found themselves once again under legal attack: “The California bullet train project violates state law because it is not financially viable, will operate slower than promised and has compromised its design by using existing shared tracks in the Bay Area, attorneys for Kings County and two Central Valley farmers argued. The lawsuit asserts that the state’s plans for the Los Angeles to San Francisco high-speed rail link violate restrictions placed on the project under the $9-billion bond act that voters approved in 2008.”

“The suit asks to halt funding for construction and land acquisition, allowing spending only to develop an alternative plan. A ruling is supposed to be issued within 90 days. Judge Michael Kenny had asked the attorneys to focus on five technical questions revolving around the state’s compliance with the bond act.”

The lawsuit echoed doubts raised recently by Assemblyman David Hadley, R-South Bay. Hadley “told local radio station KFI 640 AM that the new route potentially goes against a provision in the high-speed rail legislation that says the train must first connect to Los Angeles,” according to Reason. “He stated the language was added to ensure Southern Californians didn’t foot the bill for a train that could very well end up becoming a regional transportation project. Hadley is introducing legislation next week that would take a portion of funds away from the high-speed rail project based on the new plans to build north,” the magazine added.

The new Economic Freedom of North America report evaluating the 92 states and provinces in the U.S., Canada and Mexico for how many obstacles they place on businesses says only one American state — New York — has more such obstacles than California.

The report, assembled by scholars at the Fraser Institute in Toronto, examines the 50 American states, 32 Mexican provinces and 10 provinces/state governments in Canada and compares their differences in government spending, taxes, labor market freedom, legal systems/property rights, sound money, the ability to trade internationally, tax rates, credit market regulation, and business regulations.

New Hampshire, South Dakota, Texas, Florida and Tennessee get the highest marks of any American states. After New York and California, Alaska, Hawaii and New Mexico round out the bottom five.

That means all four of America’s mega-states are in the top five or bottom five, and that the Fraser report is likely to prompt familiar arguments about whether California’s business-unfriendliness is oversold, or whether the higher economic freedoms of Texas haven’t yielded more dividends because talented people value quality of life — i.e., living in California.

Business Insider has upbeat take on California

Last year, in response to CEO magazine ranking states on their hostility to business, Business Insider issued a ranking that evaluated the health of the economies of each of the 50 states. This provides a metric by which one can judge the argument that California’s regulatory climate is or isn’t too onerous.

The CEO survey last year ranked California as the most hostile in the nation for the tenth straight year.

But Business Insider, while acknowledging the CEO critique, had a different evaluation after examining “recent change in housing prices, nonfarm payroll job growth, unemployment rate, GDP per capita, average weekly wage, and state government surplus and deficit.”

It ranked California as having the fourth best economy in the nation, a ranking that might surprise even the strongest defenders of Gov. Jerry Brown’s record, given that many inland counties remain with recession levels of unemployment and underemployment, and given the size of the state’s unfunded retirement benefit liabilities.

But a closer look at the methodology suggests that California benefits greatly from the enormous wealth being generated in the Silicon Valley, a huge plus factor with few parallels in other states. GDP per capita is definitely on an uptick, even if the wages for most Californians are stagnant.

A 2014 Los Angeles Times analysis also provides context on why by one measure, the Golden State seems to be thriving, but not by others.

The fastest job creation has come in low-wage sectors, in which pay has declined. At the high end of the salary scale, a different dynamic has taken hold: rising pay and improving employment after rounds of consolidation.

Most distressing, middle-wage workers are losing out on both counts.

“People talk about it like an hourglass,” said Tracey Grose, vice president of the Bay Area Council Economic Institute. “There are fewer opportunities for people in the middle.”

At fault was a drafting error in a key piece of legislation designed to bring uniformity and predictability to the state’s pot regulatory structure, with the possible legalization of the drug around the electoral corner. “California’s new medical marijuana laws were supposed to provide more structure and clarity for the state’s loosely regulated, billion-dollar industry, but in the past few weeks, dozens of municipalities have ignored that intention by moving quickly to ban delivery and other activities codified by the legislation,” the San Francisco Chronicle noted.

Moving too quickly at the tail end of Sacramento’s fall session, lawmakers passed a law “that imposed a deadline of March 1 for local governments to adopt land-use regulations for marijuana cultivation,” as the Sacramento Business Journal noted. “Under the law as adopted, those governments that miss the deadline would turn that authority over to the state.”

Domino effect

That triggered a rush to codify cities’ own regulations. In an abundance of caution, although the League of California Cities became aware that lawmakers decided they goofed, it “is advising cities without regulations already in place to quickly pass complete bans on cultivation to assert their authority over the state,” according to the Los Angeles Times. “Cities would retain the latitude to soften cultivation rules later,” the paper noted, adding that in San Diego, city officials are contemplating a moratorium rather than an outright ban.

In response to the unwelcome surprise, legislators have switched into high gear to reverse the trend. “The law’s authors are now scrambling to pass Assembly Bill 21, a bill that would eliminate the deadline and give local governments more time,” the Journal reported. Co-author Assemblyman Rob Bonta, D-Alameda, said municipal governments won’t face any pressure to slap on a ban by the first of March.

Gov. Brown promptly threw his weight behind the effort as well. “The governor supports allowing local municipalities a reasonable amount of time to come up with regulations that work for their communities,” Deborah Hoffman, his deputy press secretary, explained via email, according to the Journal.

A unified front

At the same time, the march toward marijuana legalization has advanced apace. “California’s legislative analyst and finance director estimate that legalizing marijuana for recreational use could net as much as $1 billion in new tax revenue for the state and local governments,” the Associated Press reported. “Finance Director Michael Cohen and Legislative Analyst Mac Taylor produced the estimate based on the provisions of the leading pot legalization initiative proposed for the November ballot.”

That effort, backed by Silicon Valley heavyweight Sean Parker, has managed to sideline the state’s other major initiative. ReformCA has yet to officially endorse the Adult Use of Marijuana Act, which Parker and Lt. Gov. Gavin Newsom have supported. “But last month a majority of its board members voted to suspend the ReformCA initiative,” as the LA Weekly observed; “the suspension of ReformCA’s own effort means, essentially, there is one initiative that appears to have the cash and organization to make it to the ballot in 2016.”

Fresh embarrassment

California recently suffered a new setback at the intersection of law enforcement and marijuana regulation. “Dozens of drug cases in Yuba and Sutter counties may be irreparably tainted and facing dismissal after a narcotics strike team officer and two associates were arrested on charges of transporting 247 pounds of marijuana to Pennsylvania,” the Sacramento Bee reported, referring to officers based in California. Sacramento attorney George Mull told the Bee, “Heath’s arrest stokes long-held suspicions in the cannabis community about rogue cops stealing pot in ‘smash and grab’ raids on growers. ‘Perhaps some law enforcement officers are seizing cannabis not because they see it as a violation of law but to seize a valuable crop for their own benefit,’ Mull said.”

On the work front, the year finished out with weaker, but not alarming, numbers. “California employers added just 5,500 jobs in November, according to federal data — a significant slowdown from more robust monthly gains earlier in the year,” the Los Angeles Times reported. “But the state unemployment rate continued its five-year-long decline, dropping to 5.7 percent in November, the lowest in eight years.” By way of comparison, the nationwide unemployment rate has been hovering around 5 percent.

For a broader view of the economy, analysts looked to other factors. A string of reports reinforced the significance of Silicon Valley to the state’s health, although “red tape, high taxes and a burdensome cost of living” continued to dog Californians statewide, according to the San Jose Mercury News. “In one report, prepared by Beacon Economics for nonprofit group Next 10, a comprehensive look at California’s business climate determined that the Golden State is considerably more hospitable to business than suggested by conventional wisdom that sometimes elevates less costly states such as Texas,” the paper noted. “Another study, the Milken Institute’s annual Best-Peforming Cities Index, found that the San Jose metro area, which includes most of Santa Clara County, is the top performer for 2015.”

Two Californias

The analyses helped paint the picture of a state increasingly divided between a relatively prosperous coast and a more struggling interior. “By about 2 to 1, Californians believe the state is split between haves and have-nots, with slightly more people putting themselves in the latter category,” according to a survey reported by the Times and conducted by the Public Policy Institute of California. “Just fewer than half of Californians believe that the state will experience good economic times in the next year, but 41 percent say the economy will suffer tough times.”

Even cities just a few hours’ drive from Silicon Valley have limped toward recovery in the wake of the Great Recession. “Stockton, Fresno and Modesto were among the country’s 10 weakest performing metro regions in 2009, according to a Brookings Institution study, and in parts of the Inland Empire, 1 out of 75 homes was in some state of foreclosure — the fourth-highest count in the nation,” as the San Francisco Chronicle reported. “While the Bay Area was by no means spared from the recession, the impacts weren’t as stark. All counties in the region recorded lower employment losses than Los Angeles, San Bernardino and Riverside counties. A third of the counties in the Bay Area fared better than San Diego and Orange counties.”

Doubling down

Critics have warned that undue reliance on the seaboard, and on Silicon Valley in particular, would have risky distorting effects on policymakers’ views and deeds. Setting aside Silicon Valley and the Bay Area, for instance, “the Golden State’s employment growth between 2009 and 2014 and real gross domestic product per capita between 2009 and 2013 each drop about 2 percentage points,” as the Hoover Institution’s Carson Bruno observed. “This is a 55 percent reduction in economic growth and a 25 percent cut in employment growth for California without this one region.”

Thanks to the region’s dominance, the Golden State’s budgeting has become increasingly captive to its tax base. “California’s budget is currently in a strong position because of a surge in tax collections, specifically personal income tax collections,” Bruno added. “Without the Silicon Valley-Bay Area, average assessed taxes per capita would have dropped $249 per year since the Great Recession ended or the equivalent of approximately $7.9 billion per year. That is the difference between budget surpluses and budget deficits.”

California’s coastal metropolises have proven especially exposed to the ups and downs of international markets — especially China, where a weakening economy has broken the state’s run of record-setting exports. “California shipments to China in the August-to-October period fell by 11.4 percent, from $4.19 billion last year to $3.71 billion in 2015,” the Sacramento Bee noted. “Shipments declined across the board, from computer equipment to agricultural products.”

“About 33,000 immigrants moved to California from China last year, roughly triple the number who came in 2005,” the Sacramento Bee reported, citing data from the U.S. Census Bureau and the Public Policy Institute of California. “The number of immigrants coming to California from Mexico fell from almost 100,000 in 2005 to just over 30,000 in 2014, a roughly 70 percent decline.”

Long-term shifts in the west coast economy appeared to have influenced the shift, tilting away from so-called “jobs Americans won’t do” to high-tech opportunities that require college or graduate education. “Arrivals from Asia have disproportionately settled in and around Silicon Valley,” the Bee noted, adding that “India, which sent about 29,500 immigrants to California last year, also is poised to overtake Mexico. Some of California’s recent Asian arrivals are college students or long-term workers who eventually may leave the country; others will stay permanently.”

Making money

For that reason, they have remained a target for rhetoric and policy proposals this U.S. election year. But Mexico’s American immigrants have become a political football in a truer sense as well: both teams now wish to have them. In an appearance on WFAA’s Inside Texas Politics, former Mexican president Vicente Fox made the pitch for return migration. “We are building the opportunities in Mexico. We work hard to have jobs for them. We want them back,” he said. “We need them back.” Alluding to the economic rise of China, Fox hinted that Mexico could attract back former U.S. immigrants in much the same way the U.S. draws Chinese newcomers. “At the very end, we have to meet the challenge of the East,” he said. “The East is growing fast. The East is getting powerful.”

A central contribution of this paper is to document employment opportunities created in entirely new industries – that appeared for the first time between 2000 and 2010 – associated with the arrival of new technologies.

 

These data are used to examine the determinants of new industry creation, showing that new industries are more likely to emerge in human capital abundant places and cities that specialize in industries that demand similar skills.

 

Yet, the magnitude of workers shifting into new industries is strikingly small: in 2010, only 0.5 percent of the U.S. labour force is employed in industries that did not exist in 2000.

 

Crucially, it is found that many new industries of the 2000s stem from the digital revolution, including online auctions, internet news publishers, social networking services and the video and audio streaming industry. Relative to major corporations of the early computer revolution, the companies leading the digital revolution have created few employment opportunities: while IBM and Dell still employed 431,212 and 108,800 workers respectively, Facebook’s headcount reached only 7,185 in 2013.

 

Because digital businesses require only limited capital investment, employment opportunities created by technological change may continue to stagnate as the U.S. economy is becoming increasingly digitized.

Uber an exception to grim picture — for now

But there is a California company that is an exception to the scenario outlined by Berger and Frey. It’s San Francisco-based Uber. Earlier this month, Uber CEO Travis Kalanick used a posting on his company’s web site to trumpet its claim to have created 1 million jobs around the world in 2015.

That trend isn’t necessarily likely to last, however. Uber, Google and other tech firms in California are leading the push to create self-driving cars.

This is from a September report on TechCrunch.

Uber poached around 50 scientists working on self-driving car technology at Carnegie Mellon University’s National Robotics Engineering Center earlier this year. Uber had been partnering with CMU to research building its own autonomous vehicles. But then it pulled from a massive venture funding war chest to hire away a lot of CMU’s talent for its Uber Advanced Technologies Center.

 

Now, Uber appears to be publicly trying to win back the good graces of the academic community by announcing a $5.5 million gift to CMU. The money will support hiring a new robotics faculty chair and three fellowships.

Google was also in the news on this front this month, ripping the California Department of Motor Vehicles for its proposed rules on self-driving cars.