Public-Private Partnership Works in the Bay Area

San Francisco area leaders stimulate trade, high-tech industry, and find uses for bases

SHE says she's a farm girl at heart. She knows the old adage, you can lead a horse to water, but you can't make him drink.

Sunne McPeak, president and chief executive officer of the Bay Area Economic Forum (BAEF), does her best to lead all the horses to water; but she also encourages them to take a few sips together.

Ms. McPeak's job is to nurture economic growth in the San Francisco Bay area.

Her recipe is to encourage all interests, public and private, to honor the "roots of democracy, to utilize the chance to govern ourselves by taking advantage of the energy of the private sector."

The BAEF was formed in 1988 as a public-private partnership by the Association of Bay Area Governments and the Bay Area Council, a business organization.

While other United States cities have developed such partnerships, the BAEF is unique because it focuses on an entire region - the San Francisco Bay Area.

The board of directors of BAEF includes the mayors of San Francisco, San Jose, and Oakland, as well as representatives from the nine counties that make up the Bay Area.

The BAEF has developed task forces to concentrate on several issues central to boosting the region's economy: increasing trade, finding new uses for closed military bases, and further enhancing the link between the region's high-tech industry and the local economy.

"So much of dealing with economic problems is along political jurisdiction lines," says Robert Parry, president of the San Francisco Federal Reserve Bank. So a real key to growing an economy, he says, is to "put all the public and private groups together" at the same table and hash out "solutions that really work."

Mr. Parry, who was behind much of the BAEF's conception, served as as chairman of its board until 1993 and currently remains on the board.

Other board members include top business people - the vice chairman of Chevron, the CEO from Raychem Corp. - the chancellor at the University of California, Berkeley, the secretary of the state's trade and commerce agency, and top officials from unions, the medical community, and banks, among others.

The Bay Area is a tightly integrated economy, Mrs. McPeak says, with its universities feeding the high-tech sectors, a skilled labor market evolving new development and products, and venture-capital firms spurring growth.

The region boasts a highly educated labor force. Of the more than 3 million workers, 25 percent have completed four or more years of college - versus 17 percent nationwide, according to census figures.

Fortune magazine just placed the Bay Area at the top of its list of 10 best cities for business in the US, citing a number of the region's advantages.

"The Bay Area is a knowledge-based economy - like Boston, but larger - with lots of high-tech companies, including computers, biotech, multimedia, many intimately related to the universities here," Mr. Parry says.

But the Bay Area, like the rest of the state, has been in the thick of economic battle the last few years.

California did not come out of the last United States recession until spring 1993, whereas the rest of the country emerged from the downturn two years earlier. The impact of base closings and defense cutbacks is especially challenging.

BAEF puts a focus on studying such challenges needing attention and then getting collective actions moving that will bring "vitality to the area as a whole," McPeak says.

BAEF is working to facilitate various defense-conversion efforts, including cooperating with the Navy to accelerate clean-up of closing bases, looking at new uses for the bases, integrating environmental quality with expected new business activities.

Bringing top "brain-trust" types of business leaders into the process of dealing with top military leaders and with other associated government agencies is part of the process.

Another task force, led by Julius Krevans, chairman of BAEF and Chancellor Emeritus of the University of California, San Francisco, is developing information to further enhance the already abundant links between research institutions and the economy.

A task force chaired by Stanford University President Gerhard Casper is seeking reforms in government regulations and operations to enhance business competitiveness.

McPeak's "public-private partnering" theme is well illustrated by the Baytrade program. Its mission is to create new jobs through expansion of exports from the greater Bay Area, the nation's fifth-largest metro area.

The emphasis of Baytrade is on bringing the energies of the private sector to life, says its director, Paul Oliva, a trade development expert.

Oakland Mayor Elihu Harris got the initial idea behind Baytrade rolling several years ago when he called Mayor Frank Jordan of San Francisco and Mayor Hammer of San Jose and told them that the region needed more exports.

The Port of Oakland is in Mayor Harris's domain, but it depends on healthy economic activity in the whole region. The other two mayors liked the idea of doing something to expand exports . Since they all sit on the board of BAEF, they brought the idea up at one of its meetings.

Baytrade is about 10 months into its assignment to facilitate, in a 24-month period, 320 private trade "actions" - new sales overseas by small- or medium-size companies in the Bay Area.

"We are ahead of schedule," McPeak says.

In one contract, a telecommunications company with no trade experience landed a large contract with the government of China to help bring phones to 1,500 remote villages.

In one element of the deal, the state of California provided a loan guarantee, with funds coming from a private bank. In another deal, a company selling prepackaged salad mixes of fresh produce is sending boxes of their product to Japan. There, consumers will pay big money for fresh products - especially if they have a California cachet.

In both cases, Baytrade helped the companies find needed marketing, credit, and other services. Baytrade is funded by: the US Department of Commerce, counties in the Bay Area, the cities of San Jose, Oakland, and San Francisco, and California's Trade and Commerce Agency, several international trade associations, and a few service providers (such as airports and ports).

"We are a retailer of many, many services" pulled together and focused, Oliva says. "Governments offer many separate wholesale services," he explains, adding that there had been no group to give businesses a quick, comprehensive path to all the complexities of exporting.

Oliva and his group are also working on putting Baytrade's services on the Internet.