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10.10.07

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Photograph by Carlie Statsky
Man with A Plan: Jeremy Neuner thinks Santa Cruz's proximity to Silicon Valley, coupled with its history of creativity and enviable location, will make it a magnet in the next phase of the information economy.

Jeremy Neuner on the Record

Santa Cruz's new economic development manager talks about the clean tech revolution, wooing industry and making his new hometown "young and rich."

Interview by Traci Hukill


In July, Santa Cruz hired its first economic development manager. Jeremy Neuner, a graduate of Harvard's Kennedy School of Government, would like to see Santa Cruz become a center of clean technology and design. We caught up on Oct. 5, the day after the third meeting of Santa Cruz Next, an informal networking group for youngish professionals. There, Neuner and Silicon Valley Leadership Group CEO Carl Guardino had spoken of Santa Cruz's economic past and future.

Last night at the Santa Cruz Next event, I enjoyed your brief economic history of Santa Cruz and was wondering if you could give it to readers again.
Sure. Most of our history we were a working town, right? Blue-collar jobs, fishing, lumber, lime processing, leather tanning, but because of the demographics and the fact that we were a blue-collar town we were sort of old and poor. Fast forward to the 1960s, 1970s, the university moves to town, we become a hotbed of liberal activism, surfing culture's in full swing, surfing and protesting are great pastimes but no one's getting rich doing 'em, and we go from being a town that's old and poor to a town that's young and poor.

Fast-forward to the 1980s, 1990s and today, some of those young people grow up, they make good, they make some money: we become a bedroom community for Silicon Valley and export talent over the hill and import wealth back, housing prices start to skyrocket and Santa Cruz increasingly becomes a place where only the wealthy can live so we are now a town that's old and rich and what we want to do with our economic development strategy is turn this into a town that's young and rich. Ushering in the next phase of Santa Cruz economic history.

Briefly, how do we do that?
Very briefly, we catalyze those elements that are already here. So we've got entrepreneurial talent. We've got creativity and innovation. We've got intellectual property. We've got space in a physical place for the entrepreneurial talent to take root. And most importantly, we've got the money here in town, it's out there, to help to fund these projects and move them and actually create great companies.

The other side of this, and we're always doing marketing to try to recruit and attract business, so it's a little chicken and the egg thing—we're using these initiatives in and of themselves to grow business here; we're also using that as an incentive for businesses to relocate. So they say: Why should we relocate here? Well, look at everything we've got here. We've got a university, we've got an entrepreneurial community, we've got a design center, that can help match with your design and R&D work that you're going to be bringing in. So it's two-pronged, a little chicken and egg in terms of which comes first, but we hope to kind of grow them together.

So, for example, working on a recruitment right now of a small R&D division of a German company—I won't say which one—that likes what's happening in the area of research that they're doing, there's some work going on at UC-Santa Cruz, there's a company here in town that uses their products, and so there's a link there. And you know what? They really like Santa Cruz. They like the beach, they like the mountains. They don't want to live and work in Sunnyvale. They want to live and work here. So those are sort of the three things that are attracting that company here, and if we can show them what we've got going on, then maybe we can build some momentum.

Is part of the plan a clean-tech or green-tech component?
Yes, couple reasons for that. Number one, that's the next wave of growth, particularly as the venture capitalists figure out where the opportunities are. That's very much the next wave. The second part is that, as I mentioned last night, we do have some renewed leadership here in town surrounding the idea of green tech. When the mayor, one of the county supervisors who represents this part of the county and the chancellor of UC-Santa Cruz all get together and they sign a climate action pact, which happened last week, and part of that pact is we agree to work together to identify ways that we can attract investment that will invest in solutions to climate change—and to me these are products and services, right?

These are not feel-good proclamations. This is solar, this is biodiesel, this is software programs that help people commute better and cut down on their commuter trips. All these things do two things: Number one, they provide jobs, they provide business services and they also, oh by the way, help reduce greenhouse gases. The big reason everybody's excited about green tech is it's an opportunity to make money, to grow businesses, and oh, by the way, save the world as well. It's the first time, maybe ever, where the opportunity to do well and to do good are as closely aligned as they are now.

Is that a choice right now, a philosophy, a way of creating a better world—or is it pragmatic?
Well, as I said, I think it's the first time when pragmatism and philosophy are so closely matched. So I don't think we have a choice. This is happening in the regional and national and the international economy, right? The biggest statistic I can point to is the amount of venture capital money that's getting thrown around: $3.5 billion is gonna be invested in 2008, including green technologies. That's nationwide, with probably close to half of that happening right here in California. So if the venture capitalists are throwing their money behind it, it's a really good bet there's something there. So this is not a choice, this is the next wave of the economy.

You heard Carl Guardino last night say we want to turn Silicon Valley into Solar Valley. Silicon Valley built up wealth based on microprocessor engineering and all that stuff. Well, now we want to use solar and clean tech more broadly to rebrand Silicon Valley. This is happening. Now the fact that we can easily marry that with a philosophy—and it's not even a philosophy anymore; this is no longer pie-in-the-sky stuff. I think people pretty much realize that we've got to do something. And what I think is great about Santa Cruz is we're so far ahead on the philosophy piece. What's still a little bit out there for other parts of America, we firmly believe this and have for a long time. We used to be those crazy radical hippies when it came to saving the world, and it turns out we were right. We were a couple of decades ahead of our time. So that's why I think there's an opportunity for us to stand out in that regard. We're already in the game.

There hasn't been one of you here before, right?
Correct. My position is brand new in the city. When I started here in July, that's the first time we ever had an economic development manager.

What is it about this moment?
Well, I'll sort of tell you the history of why they decided they needed someone in the job. Couple of years ago, I think it was in September 2005, a gentleman by the way of Cliff Warren was a high-tech CEO here in town, former CEO and chair of Raytech. He's no longer in that business, now does independent consulting, and was hired by the city to come up with a strategy for attracting high-tech companies to Santa Cruz. He was hired by my boss, the redevelopment director [Ciel Cirillo]. And why was he hired then? I think because we realized we needed to get something going economic development-wise in the city. The climate was right. Texas Instruments was gone by then, all the manufacturing on the Westside, everything was gone, and we needed to get something going. So they asked him to come up with some recommendations. So the design center and the business incubator on the Westside, revitalization—all were ideas that came out of his report. And then there was nobody really permanently on staff in the city to really turn these ideas into reality. So they realized we'd better hire somebody toward making these ideas happen.

The business incubator idea—would that be focused on clean tech or any kind of tech?
Business incubators work best when they do have a focus. And they don't need a focus, they can have a couple of focuses, but we very much would like it to be clean tech. Another potential focus would be digital media, gaming. And then some of the biosciences, life sciences. We can have a couple, three-pronged focus depending on how big we want to make this. But those are three possible prongs. And one of the things about an incubator is you have a chance to cross-pollinate. So you have three startups working in clean tech, they can share ideas.

How did you go about studying up on Santa Cruz?
Well, a lot of the big picture ideas I sort of inherited. So I was not totally making this up. However, I was very lucky when I moved to town. We moved here for my wife's job, so I was a "trailing" spouse. And I was very lucky to have met a women, her name's Mary Lou Goeke, she's the executive director of Santa Cruz County United Way, and a good friend of mine from graduate school used to be on the Watsonville City Council, so he knew Mary Lou from his job on the council and put me in touch with her. And she said to me, we met for coffee when I first got to town and she said, I would really like to help you work here in town and not export you over the hill. Anything I can do to keep talent like you in town. So she set me up with a lot of networking conversations with people. In those networking conversations, I probably had a dozen of them, I actually met my boss in one of those conversations, the acting chancellor I met, and when I said in my speech that all the pieces are firmly in place, I began to get that sense, even before I took this job, that what was happening in Santa Cruz, that we were sort of on the cusp of something, that we were sort of turning the corner a little bit. That was the hunch I got, that we were ready to do something a little different, be something a little different in terms of our economy. Not a radical change, but a course correction in a new direction.

So there's that piece. And I started getting involved even before I got the job, with Santa Cruz Next, and meeting some more young people. And there really is a lot of energy and a lot of enthusiasm around this. And then I got the job and it came together.

So it was a combination of the playbook I inherited from Cliff and these lay-of-the-land conversations that I was lucky enough to have in my first six months here, all combined basically to the speech I gave last night.

What were your degrees in?
I have a bachelor's degree in literature from Georgetown and I have a master's degree from the Kennedy School at Harvard, it's a master's of public administration, with a focus on business and government policy.

So this is exactly what you went to school to do.
This is exactly what I went to school to do. I did it in Washington, D.C., on the federal level, trying to get business and government to work better together. I worked for a strategy consulting company. And one of my big clients was FEMA, post-Katrina, which was a very interesting client to have. One of the things we were working on there was getting FEMA to work more closely with business. Particularly, one of the things with FEMA was they couldn't get disaster supplies—simple stuff: water, food, that sort of thing. So we said, you know, there are a bunch of big companies out there—FedEx, UPS, Wal-Mart, Target, Home Depot—that do supply-chain better than anybody else in the world, right? In terms of getting stuff where it needs to go. So rather than run your own disaster business, why don't you partner with these guys? They would love it; a lot of great exposure—Wal-Mart comes to the rescue at Hurricane X—a lot of win-wins there. So brokering those kinds of relationships is what we were working on. But what I found very frustrating, and why I'm very excited to no longer have that job, is the government would say, We love it! Brilliant! Revolutionary! Here's why we can't do it. Because of the bureaucracy and the money and the politics—so here we are, and Wal-Mart, they were chomping at the bit to do this. They thought it was going to be great.

So when I came to Santa Cruz and I had the chance to broker the same kinds of relationships but do it in a town where I thought I could actually get something done was very appealing to me. So I'm much more excited about doing things here where I can get something done.

Economic development as government enterprise, what's the history of that? Has that been going on all along and we just didn't notice it?
As a position in government, it's a relatively new idea, last handful of decades maybe, so it's a pretty new idea. And you see, just as a sidebar, I met a woman yesterday who had pulled an advertisement out of an airline magazine and it was all about how Kentucky is a good place to do business. So the Kentucky State Economic Development Board or whatever had taken out this advertisement. What I like to tell people about economic development is economic developers don't create jobs. Businesses create jobs. Economic developers hopefully create climate, catalyze, strategize, so that businesses are more likely and able to create jobs.

So that's sort of how I see my role: bringing the right mix of people and circumstances together so that business can do what business does: create jobs, create wealth and create great services. If I can help business do that, then I can do my job.

One thing that occurred to me last night while I was listening to you and Carl Guardino talk is—I don't know if you saw this report. It was by the California Budget Project. They did this report called "Generation of Widening Inequality." They reported on the wealth gap in California and specifically what they did, and they tracked job growth across the spectrum and saw that job growth was clustered at the top and at the bottom. And for sure that appeared to be the case in Santa Cruz. And then, in my talking to executive director Jean Ross, she said some really interesting things: We don't have those jobs in the middle, she says. It's like taking the middle rung out of the ladder, and you can't jump up the ladder, you need to move up step by step. So without those middle jobs, which—I think she's talking about the manufacturing types of jobs, the stuff that's not farm work and it's not—
It's not minimum-wage labor and it's not super-high-paid, just good, normal, middle-class jobs—

So I wanted to ask you where those kinds of jobs fit in here.
Those are exactly the kinds of jobs we create. We export our middle class over the hill every day, to a large extent. Most of the people we're exporting over the hill, they have bachelor's degrees, a lot of them have master's degrees, they're in high-tech jobs, they're also in professional services jobs, half of them make over $100,000 a year—and half of them make less. And that's kind of the—bachelor's degree, professional folks, making pretty decent but not ridiculously fantastic money—those are the people who are going over the hill every day because that's where the jobs are. So the middle class is here in Santa Cruz, what we're trying to do is create the jobs, the economy that are here.

I guess I'm thinking a lot of those over-the-hill jobs fall into the category of "clustered at the high end."
Do they?

Well, that's what I'm guessing.
So is it that kind of blur between blue- and white-collar jobs?

Yeah, sort of working class—not just "barely scraping by," and not "I'm making $80,000"—more like, "I'm making $35,000." It's perfect that I can't even come up with what those jobs are.
So part of what will happen here is that as we create good-paying high-tech kind of jobs, then you do get more people living here. And we need people who are teachers, firefighters, nurses, kind of the infrastructure of the town will need to be commensurately bumped up as well.

I think your hard-core manufacturing jobs, those have already left Santa Cruz, they've basically left California in general and either gone on to cheaper markets in the United States, or more likely, places like Mexico, and even Mexico's getting expensive now with China as cheap as it is. So your mid- to late-20th-century manufacturing jobs, I just don't think we're going to get those. What we're going to get instead are the kind of design jobs and those will have maybe steps along the way that start out as a technician.

I see what you're saying. It's a tough nut to crack for lots of different reasons. I think we're going to be bringing those jobs to Santa Cruz.

I guess it's the $64,000 question. Is it just $64,000? That's not much.
We need to inflation-adjust that. It was $64,000, I think, in the '60s when the show first showed up, so if we inflation-adjust that we can make it the $250,000 question.

Another question for you. Where does Navy helicopter pilot fit in?
Great question. I'm glad you asked that. I went to school, went to Georgetown on the Navy ROTC scholarship and I owed them some time afterwards and I wanted to fly and I was able to fly and it was a ton of fun. Here's what I learned and what I think is directly applicable to my job. I learned to take a group of people, some resources and a plan and accomplish a mission. Get a job done. And I think the way I learned that, against stereotypes, you very rarely order anybody to do anything in the service, contrary to popular opinion. And as an aircraft commander, me and my crew are five people, each guy, or gal, because we had coed squadrons, had his or her job to do regardless of rank or position or seniority. So my job as aircraft commander was to take inputs from everybody, regardless of rank, about how the mission was going. So take a team, take resources—in this case a helicopter—and how to plan, develop and accomplish the mission. I heard some sort of disparate aphorisms about Santa Cruz when I first showed up. One of the first was, In Santa Cruz, process is our product. So: we don't ever do anything here, we like to talk about it. I find that very unsatisfying. I like to get team, resources, plan, get the job done. So I hope that's something I bring, more than anything else to this job, a sense that we've got to do something. We can talk about things and it's part of figuring out what the mission is. At the end of the day, we've got to get the job done.

And helicopter pilot, as opposed to fighter pilot, helicopter pilot really is a team effort. I was search and rescue. So I was flying the bus, right? When you're hovering over a guy in the water, you give control of the mission to the young enlisted crew chief who's basically telling you how to get over the survivor and when to drop the hook. That guy's running the show, right? I may be the big fancy aircraft commander, right? But it's not my show anymore. It's that guy's show. And understanding when you're working with a team of people when it's your show and when I need to be taking direction from you even though I'm the guy who's taking responsibility for the mission's success.

So I learned teamwork very well. And none of this, none of what I was talking about last night, is going to happen is going to work unless we have some teamwork.

Last question: what's your sign?
My sign. OK, my birthday's Oct. 26—

OK, you've got to figure this out, you live here now.
I know my sign, I know my sign. I'm a Scorpio, I think it turns over on the 22nd, so that's a little cuspish? Maybe off the cusp of Libra? Now it's up to you to tell me what that means. Or not you, but somebody.

Yeah, I don't really know. I hear they like big families.
I have two kids.

OK, one last question, really. I thought it was great that last night in your speech you were saying, It turns out "we" were right. You've moved fairly quickly into the "we" frame of mind when it comes to Santa Cruz. So what's my question: Are you feeling like part of this town? Are you grooving on it?
Yes. One thing is I was really lucky to be embraced the way I was embraced. Mary Lou really did a lot to plug me in. And again the Santa Cruz Next piece. I met [Vice Mayor] Ryan [Coonerty]—he did a booksigning and I happened to meet him at that and we chatted, and right off the bat, he's going to be the mayor here in a few months, and we found out we had a lot of things in common.

And the other part of it is this is an easy place to want to become a "we" with. Particularly because my wife and I were really looking for a change. We're a two-career family, with two kids, and we didn't see the possibility of making all that fit in balance in a megalopolis like Washington, D.C. So we came here, we were really looking for a little more relaxed but still interesting place to be. It's just one of those things, you know, where you hit it off with somebody, you can't figure out why? So it's just been a very easy place to want to be a part of. So we're here, we're not moving anytime soon, we've got kids who are not quite school age, my little boy's in preschool, my little girl's starting soon, and it's just a great community. And it's mostly got to do with the people. And you just look around, it's—we go out to West Cliff on Saturday morning and it's just—what a place, what a place. So the combination of people and the background make this a fantastic place to be. And the economic development that's such a huge attractor, a huge attractor to me for building and attracting business because it's such a great place. It can't be the whole thing but it's a huge factor.


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