December 10, 2014

LOS ANGELES (December 10, 2014) -- In addition to providing outlooks for the nation, California and Los Angeles, the December 2014  UCLA Anderson Forecast engaged  a panel of academics and industry leaders to discuss the critical infrastructure investments that California requires for a prosperous future.

Led by Forecast Director Edward Leamer, the panelists agreed that serious infrastructural problems plague the region. In a dense metropolis, higher demand for multi-unit construction lowers the demand for labor, as individual dwellings require more people to build them. Big companies automate manufacturing, which means fewer jobs are created relative to the size of the enterprise. And everyone concurred that the drought may not end anytime soon: Weather will become more erratic, and storms shorter and less frequent, but much more intense.

In his keynote speech, California State Controller Ron Galperin was upbeat about the possibilities for improved infrastructure as the city's finances become more transparent.  The goal: greater accountability, especially for special funds projects.

There appeared to be great hope across the panel for new technologies that would transfer the power to measure, monitor and make decisions about energy consumption into the hands of individual consumers. In light of California's serious drought, Andy Lipkis, Tree People president, focused attention on water, providing insight on ways to conserve the resource and sharing lessons learned from the 12-year Australian drought.

He pointed to ancient solutions, such as cisterns that capture rainwater, as well as new technologies, including smart thermometers and cistern monitors, as possible means of effective water conservation.   He also stressed the importance of changing consumer behaviors and mindsets about water, citing the Australians' successful use of electronic feedback systems to actively involve consumers in the water conservation effort.

"Giving people quick feedback changed peoples' behaviors and locked it in," said Lipkis. "Everybody [who was affected by the Australian drought] was totally aware of water. They now have a new language."

Bret Lane, the chief operating officer of the Southern California Gas Company, also emphasized the need for consumer awareness, encouraging the implementation of smart meters that provide consumers with information about their gas use, which could lead to more cost-effective usage of the resource, even in the home.

J.R. DeShazo, the Director of the Luskin Center for Innovation, discussed the impact electricity is having on Southern California's economy, thanks in part to the increasing interest in electric-powered vehicles.

"Electricity is becoming a more important part of the Southern California economy as an energy source," DeShazo said.   In addition to becoming an important transportation fuel, it may be used to help ports meet their clean air targets, which could mean that "their electricity consumption is going to double."  

Echoing observations made by other panelists, DeShazo drew attention to the disconnect between consumers and their use of these resources.

"Most of us don't even look at the [gas or water] bill. We just pay it," said DeShazo. "[A possible solution is] getting consumers to think about these services like real economic resources."

Panelists  who spoke about  transportation infrastructure conveyed considerable attention to environmental issues.

Otis L. Cliatt II, president of Pacific Harbor Line, which has won several environmental awards, discussed ways that his company has reduced its emission output by 80%.   Most of their company vehicles are hybrid vehicles.

"We see ourselves as part of the solution to reducing the impact on the environment," added Aurthur T. Leahy, chief executive officer of the Metropolitan Transportation Authority. "We have solar panels on top of our buildings. As more people take transit,  that will reduce the emissions as well."

About UCLA Anderson Forecast

UCLA Anderson Forecast is one of the most widely watched and often-cited economic outlooks for California and the nation and was unique in predicting both the seriousness of the early-1990s downturn in California and the strength of the state's rebound since 1993. More recently, the Forecast was credited as the first major U.S. economic forecasting group to declare the recession of 2001. Visit UCLA Anderson Forecast at http://uclaforecast.com.

About UCLA Anderson School of Management

UCLA Anderson School of Management is among the leading business schools in the world, with faculty members globally renowned for their teaching excellence and research in advancing management thinking. Located in Los Angeles, gateway to the growing economies of Latin America and Asia and a city that personifies innovation in a diverse range of endeavors, UCLA Anderson's MBA, Fully-Employed MBA, Executive MBA, Global Executive MBA for Asia Pacific, Global Executive MBA for the Americas, Master of Financial Engineering, doctoral and executive education programs embody the school's Think In The Next ethos. Annually, some 1,800 students are trained to be global leaders seeking the business models and community solutions of tomorrow. Follow UCLA Anderson on Twitter at http://twitter.com/UCLAAnderson or on Facebook at http://www.facebook.com/uclaanderson.

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