If you want to grow your company quickly, California has a message for you: Give us a try.
While some in the site selection consulting community may find it counter-intuitive to think of California as a place where companies go to “get rich quick,” the evidence suggests otherwise.
Inc. magazine released its annual list of the 5,000 fastest growing companies in America, and once again California held the top spot for most companies on the list, at 670.
“First and foremost, California is home to dreamers with an idea and the passion to make it a reality,” said Jesse Torres, the California state small business advocate. “Combine that entrepreneurial spirit with top-notch research institutions, a talented workforce and a community of innovators, and you have the secret sauce for success.”
Companies eligible for the Inc. list had revenues of at least $100,000 in 2013 and had grown to at least $2 million in revenues in 2016.
“First and foremost, California is home to dreamers with an idea and the passion to make it a reality.”
“While these are all examples of California success stories, our office is here to help all businesses, regardless of size and geography, expand in California,” said Sid Voorakkara, external affairs deputy director for the Governor’s Office of Business and Economic Development. “From the California Competes Tax Credit to navigating federal, state and local resources, to supporting a company’s global market presence, GO-Biz has helped companies in California achieve their goals.”
During this current fiscal year, GO-Biz has allocated more than $200 million in California Competes Tax Credits to qualifying companies. Since 2014, GO-Biz has awarded $555.3 million to 775 companies that are projected to create 77,178 new jobs and make $14.5 billion in new investments.
One of the largest California Competes Tax Credit awards in recent years went to Palo Alto-based Tesla Motors Inc., the Elon Musk–founded and run firm that has made and sold about a quarter-million all-electric cars from its base factory in Northern California.
GO-Biz approved $15 million in tax credits to Tesla on June 4, 2015. In return, the revolutionary automaker agreed to add 4,426 new jobs by 2019 and make an additional $2.389 billion in capital investments in California by the same tax year.
Those jobs must pay a minimum average annual salary of $35,000 and a cumulative average annual salary of $55,000 for the company to continue to qualify for the tax credits.
Since that announcement was made over two years ago, Tesla has expanded even more, acquiring its sister company SolarCity for $2 billion and announcing a drastic expansion of Tesla’s service network.
Meanwhile, Musk’s Hawthorne-based SpaceX is nearing a deal on an expansion site near the Port of Los Angeles, and an unnamed SpaceX startup is in discussions to relocate to Torrance and ramp up to 200 employees within three years.
The worldwide expansion of the Tesla car company will include 100 new service centers (on top of the 150 already in existence), 350 new mobile service vans and 1,400 additional service workers. Tesla currently earns about $467 million a year in revenue from servicing its electric cars, but that number could go substantially higher with a significant expansion of services.
As Tesla gears up to launch its highly anticipated Model 3, demand is expected to increase for Tesla’s vehicles and its services.
Getting more electric vehicles on the road is a big part of California’s goal to have 1.5 million zero-emission vehicles (ZEVs) deployed throughout the state by 2025. California already has 29 hydrogen fueling centers around the state, with more set to come online soon.
“ZEV success depends on a robust fueling infrastructure throughout California and beyond,” said a recent release from GO-Biz. “The majority of PEV (plug-in electric vehicle) charging begins at home, followed by work and public stations. FCEVs (fuel cell electric vehicles) are almost always charged at public hydrogen fueling stations. Both models offer unique advantages when compared to conventional gasoline or diesel fueling, and GO-Biz strives to play to the strengths of each technology.”
Renewable energy and electric cars, however, are not the sole focus of GO-Biz’s attraction and recruitment efforts. Foreign direct investment is also a large part of the state’s long-term economic development strategy.
That’s why the state recently hosted its first-ever California Investment Summit to attract Chinese FDI. The summit was held in June at the Leland Stanford Mansion in Sacramento and featured 14 business groups from around Northern and Central California. The goal was to pitch specific locations in California to Chinese investors focused on clean tech, water innovation, sustainable development, zero-emission vehicles and more.
“Chinese investors are looking to California for new opportunities and GO-Biz is actively working to connect them with regional business leaders that want to attract new sustainable development projects to their areas,” said Awinash Bawle, GO-Biz deputy director for international affairs and business development. “This summit is a continuation of the governor’s efforts in China and further proof that California is a world leader in the cultivation of clean technology projects that help address climate change, decarbonize our economy and accelerate the move toward a zero-emission vehicle future.”
Between 2000 and 2016, California secured 415 investment deals valued at $25.5 billion from mainland China investors, much of which went into renewable energy and other sustainability ventures, notes Jason Law, GO-Biz special advisor for foreign investment and affairs.
“Attracting inbound international investment is a key driver of California’s economic growth and success,” he adds, noting that “631,500 workers in California are employed as a result of global investment.”