What is California's competitive position?

California lost jobs due to productivity improvements just like other nations around the world. The core of California's ability to sustain and expand its competitive manufacturing advantage in the future is the use of new materials, applied through advanced manufacturing techniques to produce innovative products that are moved across global electronic and surface logistics, just-in-time, to closely tied customers anywhere in the world. Information technology penetrates and ties together every element of this process. An innovative, highly trained workforce working with advanced manufacturing and the new materials technologies invents and applies the proprietary knowledge that generates a firm's competitive advantage. Increasing productivity in the manufacturing value chain requires streamlining the supply chain by integrating logistics tasks and managing complex supplier relationships among many partners around the globe.

From 1990 through 2002 California's smaller manufacturing firms grew in number and in number of employees, while larger firms declined. These smaller and medium sized firms are California's future and are the ones to benefit most from improved competitive advantage. Ethnic entrepreneurs have been a primary source of high-technology start-ups, and the establishment of new markets, and of supply chains with South East Asia, China, and Mexico. The number of manufacturing firms owned by Latinos and other ethnical minorities - while small now compared to White owned firms - will increase in the future given future demographic projections.