Peter Schwartz Delivers the California State of the Union Speech of the Future

Diversity is the biggest driver of that wealth as we try lots of different ways of filling all those niches that complexity and human innovation are creating. It is why we are evolving so fast, changing so fast, and getting rich so fast in so many different ways. One of the important things that drives this evolutionary process is that, since the Renaissance, we are more and more the masters of our own fate. Before then, we were the victims of circumstance, of the forces of nature, of conquest, of disease. But as political progress, economic progress, social progress and scientific and technological progress have moved forward, we have gained greater and greater mastery over our future. We are less and less the victims of historical circumstance. Now, if you’re a Bosnian or Shiite, that might be a little less true, but for more and more of us in the world, it is true. What we think and do matters more. We make our own future.

The State Treasurer has many tools to help create the foundations of that evolution, to guide that process with foresight, and to help fund the infrastructure that enables our economy. He can guide the investment program of CalPERS, itself a remarkable innovation in government. He has the opportunity to help provide better and cheaper housing and bring ideas like smart growth into that process. He could help fund innovations behind healthcare. And much of this is in the service of creating conditions that develop, retain, and attract talent, the most important source of evolution.

Now, taking the long view does not mean ignoring the present. The Treasurer must be concerned about today, next week, next year, as well as the decades ahead. He has to rise to the obvious challenges in front of us and he has to reach for great aspirations. That is how our state has moved forward. The Treasurer can dream big about how to build the potential for the future.

So let me set out some of those challenges and some of those possible aspirations. I think there are at least three great challenges and they’re familiar to everyone.

The first and most obvious is climate change and environmental quality. The job here is to accelerate the turnover of the capital stock of our society, replacing old inefficient factories, transportation systems, trucks and buses and cars, houses and buildings, and bring to bear more new and efficient technology, much of it developed here in California.

The second great challenge is immigration. We are not going to stop the immigration and we probably don’t want to stop it. So the great challenge for the Treasurer is how to help sustain the engine of job creation that both attracts and supports immigrants as well as to help fund the necessary social services that will be required even as that immigration proceeds.

The third great challenge is global competition. I think it’s obvious to everybody that with the rise of China and India close to two billion people are moving out of poverty and into the middle class -- think about it as two Koreas every decade rising in China alone. They will soon be able to compete in doing everything that we do at least as well as we can and cheaply. So we have to sustain the engine of evolution here in California to develop new and competitive positions that will enable us to succeed in that global economy. We must continue to improve the competitiveness of existing businesses, and the most important asset is, of course, well trained workers at every level, from high-tech entrepreneurs to field hands. So we have to sustain the quality of education as well as social innovation, like affordable healthcare that creates the right conditions for labor mobility and a flexible economy, and thereby enables sustained evolution.

So those are the great challenges: climate change, immigration, and global competition. But it’s about more than solving today’s problems. It’s about aspiring toward a better and greater future and I think the State Treasurer can aspire to more.

We can, for example, reduce the infirmities of aging via biotechnology. I think this will matter to many of us here today. Over the years ahead we are going to be able to reverse many infirmities: better vision, better memory, better hearing, stronger bones, better muscles, and so on. Our old age will be very different than previous generations as a result of the biotechnology now being developed in the laboratories and companies of California. We will age very gracefully. And our children? Our children will see their lives extended beyond decades to centuries. We are seeing the birth of the first generation of young Methuselahs. My 16-year-old son, Ben, will probably live to see the next two, three, and four centuries. That’s what we are beginning here in California.

The second great opportunity is, of course green technologies via nanotechnology—the ability to manipulate matter and energy at an unbelievably small scale. We’re going to see new materials, thin films for solar energy, new bioindustrial processes that reduce the impact of industry on the environment, new kinds of agriculture that improve efficiency and use less water, new kinds of energy and biofuels made from a great variety of sources, and obviously new forms of waste treatment. And of course, since I come from Berkeley, we have even had protests against nanotechnology already. It’s in our tradition. “Ban the Particles.” We have actually regulated nanotechnology in Berkeley, so we’re right out in front as always.

And the third great opportunity is making all of these technologies possible through the frontiers of computing. There’s a lot of fear that the world of computing is over, that Moore’s Law is over. Well, let me tell you, it’s barely begun. We are already seeing the first of the next three waves of computing technology in spintronics, the ability to encode information in the magnetic spin of an electron. What that will mean is that your laptop in three years will have no hard drive. It will weigh a third of what it weighs today and be vastly more powerful. But that’s not all. Then comes nanophotonics with gigabyte networks that are unbelievably fast. And then finally—quantum computing, which is computing at the scale of subatomic particles that comprise matter. These computers will make the computers that we have today seem like slide rules. This wave has barely begun and will solve problems of immense complexity. How do you manage and control DNA and proteins? We may even learn, finally, how to predict earthquakes. And where is all this happening? At Alboton Labs, at IBM, at HP, at UC Santa Barbara, at UCLA, that’s where it’s happening in terms of quantum computing. So again, California is in the forefront.

So we see these great opportunities and aspirations to transform life through science and technology, through the inventions of things like nanotechnology, biotechnology, quantum computing, all of which have their origins here in California.

So you have great opportunities in front of you, Mr. Treasurer. How will we know if you had a successful two terms? Well, you will have fulfilled most of that potential I’ve just described. Californians will be richer, better housed. Hopefully our landscapes will be greener and our air cleaner. It’ll be a less congested state, more secure, populated by people living longer. It will certainly be a more desirable place. And most important, you will have created more potential upon which your successor can build an even better California. We hope for and depend upon your success. Mr. Lockyer, we wish you well.

Peter Schwartz is cofounder and chairman of Global Business Network. An internationally renowned futurist, business strategist, and author, he specializes in scenario planning, working with corporations, governments, and institutions to create alternative perspectives of the future and develop robust strategies for a changing and uncertain world.