New PRI Survey: Housing, Education, Business Climate Top Reasons Why Highly-Desired Industries Aren’t Moving to California
Survey Gives Insight into Location Decisions of R&D, Clean Tech, Manufacturing Execs
Business executives, including those in clean tech, R&D, manufacturing, and other industries highly-desired by California legislators, say the high costs of housing and real estate, poor quality education system, and expensive costs to do business are among the primary reasons why they are not locating or expanding in the Golden State. These are among the findings of a new survey of business executives recently conducted by the Pacific Research Institute (PRI).
Housing and Real Estate Costs Top Considerations Driving Decision About California
Asked about the factors driving a decision whether to locate in California, 88 percent of the business executives surveyed said the high costs of real estate was a key factor. Among the responses, executives noted that high real estate costs make it more expensive for their companies to move into the state. Lack of housing affordability also complicates their ability to get employees to move to California.
Quality of Education, Ability to Attract Skilled Workforce Key Concerns
Asked about California’s education system, nearly 63 percent of the executives surveyed said that the quality of education in California would be a major factor in their location decisions. Many executives were concerned about whether the state’s education system was producing the highly-skilled workers they are seeking for their companies, while others said they wanted good schools for their employees.
Regulations and Tax Burden Rank High on Executive Concerns
Asked about California’s business climate, 71 percent of the executives surveyed said that the state’s labor laws and regulations would play a factor in their location decisions. Specifically asked what 2 or 3 things California policymakers could do to make the state a more attractive place for their companies, the most common responses from the executives were reducing taxes and bureaucracy, and improving housing affordability and transportation infrastructure.
- Boosting California’s Competitive Edge: When asked about what California could do to boost its competitive edge with other states, many executives said policymakers should address the high costs of living and doing business and invest in education, particularly in science and technology.
- State Tax Reform Desired: On taxes, 58 percent of the executives surveyed said that comprehensive reform of state personal income taxes would positively impact their decision to locate in California as it would make it easier for them to attract a skilled workforce.
- Mixed Views on California Environmental Policy, Cap and Trade, Infrastructure
The business executives surveyed offered mixed views on California environmental policy and infrastructure investments. A majority of those surveyed (56%) said that environmental policies would not affect their decision to locate in California. Nearly 61 percent said that gas taxes, Cap and Trade, and energy costs would affect their location decision. - Environmental Views Vary by Industry: Clean tech and energy companies said current state policies would encourage them to set up shop here, while manufacturers and others said they were negative factors driving up business costs. For some, energy costs did not have a significant impact on their business activity.
- Water and Energy Infrastructure Not a Factor: A majority (52%) said improvements to water infrastructure, and a plurality (46.5%) said improvements to energy infrastructure, would not factor into their California location decisions.
About the Survey
The findings of the PRI survey on California’s business climate were based on telephone interviews with 200 business executives in R&D, IT, manufacturing, clean tech, and energy – industries identified by state legislators this session as highly-desired industries for California.
Executives who were surveyed included firms which had either relocated from California or were considering / had considered locating operations in the state. Among the participants, 19 percent said they were currently considering or have considered establishing a facility in California, and 7 percent said they have closed a California facility in the past 5 years.
Participants were asked their attitudes on California’s business climate and the factors that went into their decisions about locating in California. The interviews were conducted in August and September of 2017. Voter Surveys & Consulting conducted the survey for PRI.
