It is by now manifestly clear to anyone who cares about San Francisco’s financial health that we cannot place all our hopes in a thriving tourism industry. Much as we’dlike to keep welcoming the world to its most beautiful city, there are too many risks.
A cruise line could go belly up, hospitality workers leave on a protracted strike — each unforeseen event denying The City’s economy substantial sums of visitor dollars. There are earthquakes to consider, and terrorist attacks.
Since the dot-com collapse a few years ago, the Bay Area has conducted its business in something of an artificial paradise, believing its natural attraction to vacationers and conventioneers would keep it bustling. Never a wise plan, that.
Mayor Gavin Newsom was exactly right when, speaking at this week’s “CitySummit” in Mission Bay, he drew attention to the peril of expecting too much of tourism. As any forward-looking civic leader would, especially one who hopes to be rewarded with higher office, he started mapping an economic strategy, this one less dependent on the fun-seeking families who land daily at SFO.
The mayor revealed he’s keen on resting The City’s hopes on a three-legged economic stool. Those legs? Biotech, digital media and green technology.
No question, these enthusiasms show signs of vitality, even of job growth. But if we’re going to keep centered on the stark realism the mayor’s project requires, let’s understand there’s something perhaps a little too politically correct and faddish about them.
Two decades ago “progressive” politicians, and the academics flattered to advise them, were smitten by something called “industrial policy.” The idea, put into practice in Europe and Japan, was for all-knowing government to target the industries they expected to win the future.
So Europe remains sclerotic and Japan ultimately collapsed, requiring a prime minister who applied free-market economics to revive it. The problem with industrial policy was that it substituted political for economic decision-making.
The calculations involved nothing more rational than a glorified crystal ball. Who but a few geeks tinkering in their garages predicted the cyberspace revolution? And thank goodness the government didn’t sink its resources into it before the bubble burst.
Government invented the Internet, but it took entrepreneurs to figure out its consumer-oriented applications. The Mayor’s Office of Economic & Workforce Development is tasked with training people for politically popular jobs in biotech, digital media and green technology, which may be backward. Will their guesses about the economy’s direction be any more reliable than, say, a typical day trader’s?
Doubtful. Though San Franciscans are among the world’s smartest people, micro-industrial policy attempted here has no better chance of succeeding than national industrial policy did in Europe and Japan. It’s better not to guide entrepreneurs. Just let them do their thing. And prepare to be surprised.