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The year 2007, the last time the Chamber changed executives, 2007 was a significant tipping point in business, politics, communications, and the terms of the social contract nationally and internationally. There were at least three momentous changes that began in 2007 – economic, technological, and political. There is reason to believe that a new chamber executive will be facing a similar “sea change” in 2017. The first and most obvious change beginning in 2007, was the collapse of financial institutions that led to the great recession. Complex, interrelated financial instruments, old assumptions regarding the stability of mortgages and the housing market, and multi-national financial institutions that stretched beyond existing regulatory protections, brought the world to the brink of economic catastrophe. For the first time, the world faced the reality of financial and economic mechanisms, risks, and consequences that both exceeded our ability to foresee and capacity to effectively mitigate. 2007 was also a technological turning point. The pivotal invention of 2007 – the iPhone – made real-time communications truly ubiquitous… and, increasingly, ill-considered and uncensored. It also provided encyclopedic access to information through the internet, ‘Apps’ from maps and financial analysis to games and entertainment, and, perhaps most disruptive of all, an array of social media that changed not only communications, but the nature of relationships, themselves. The iPhone was also the tipping point for “objective” media. It provided instant access and running commentary on our lives including unverified or prioritized “news” curated by our choice of media and friends. The iPhone was also a brightly-lit marker dividing the social process and structures of one generation from the next. The third transformation of 2007 was the beginning of the national political ascent of Barak Obama, a figure who, simultaneous, inspired: 1. a belief that we had undergone a social and political transformation into a post-racial, inclusive society 2. a belief that we were the victims of conspiracy dedicated to the usurpation of rights and liberties History will tell more about what changes really occurred, but, as a culture and a body politic, this is in retrospect an easily identified moment when two distinct and diametrically opposed interpretations of the same experience evolved into widely-held but opposing perceptions of truth and reality. These three forces: 1. the growth of international business and finance that exceeds our ability to foresee or manage risks 2. technologies that redefine our access to knowledge, the processes of human relationships, and the means we use relate to the world 3. social and political “tribalism” that result in diametrically opposed perceptions of reality and “truth” within the body politic have fundamentally change our world. 2017 the Next Tidal Wave of Change? The next Chamber CEO may well look back on 2017 as another watershed year in which the country and the world doubled-down on the evolutionary forces unleashed a decade ago. There are at least three “more likely than not” forces that will have not only international impact, but also local opportunities and risks: > Business Leadership. Since the end of the Second World War, English-speaking countries, led by the U.S. have been the sine qua non of international business and finance policy. But with Britain’s vote to Brexit and Trump threatening trade wars, the world may well be entering a new era in which Anglophone’s leadership in international trade and finance erodes > Climate Change. If climate scientists are correct we may have just past an “irreversible” climate change threshold. Scientific American in a report summarizing findings of the Scripps Institute of Oceanography, “the concentration of carbon dioxide (CO2) in the atmosphere in 2016 has stayed above the 400 ppm throughout the entire year for the first time in human history.” While not yet economically cataclysmic, the impacts of this level of CO2 will have significant impact on commerce, especially agriculture and coastal cities… not unlikely including Santa Cruz County > Loss of Employment Roles. There is a growing body of research suggesting that about half of the existing jobs in the U.S. will disappear over the next few of decades, as the result of artificial intelligence, robotics, and genomics. This is not to suggest that the loss of these job titles will not require the creation of other new skills, roles and jobs – they will. But virtually every task that is repetitive can be replicated today with AI and robotics if the value difference is sufficient. And the cost of these technologies continues to fall dramatically. The economic results of the decade since 2007 has not been particularly kind to us as a county. The World Economic Forum’s Index of Inclusive Growth and Development for 2017 reports in their index of the 30 “advanced” economies that the median income of U.S. workers declined 2.4% between 2008 and 2013; this is perhaps not surprising as it includes the worst of the recession years (although wage levels have just begun to advance in 2015-16. More discouragingly, the median U.S. wage and nonwage compensation was last of these advanced economies. This can be interpreted to mean that the standard of living for the median U.S. worker, lower than in any other advanced economy – a condition that certainly contributed to a widely-unexpected outcome in the presidential election. More importantly for the future, this study finds that the U.S. was 25th of these 30 advanced economies in our investment in the development of economic capacity: things like R&D and public and private infrastructure. Perceptions of Santa Cruz Opportunities Well, that’s rather gloomy news. But things may be better in California. We have not been suffering the large-scale export jobs without offsetting growth in other industries that have been prevalent in the Midwest and South. As a state and a community, we have a list of issues: housing, transportation, water, education, public pension finance are core issues both in Santa Cruz and throughout the state. But these are, with focus, effort, and leadership, solvable issues. We live in a world in which things imagined become actual things. Our capacity to solve problems continues to grow at an accelerating pace. We live in a community that is home hundreds of innovators and entrepreneurs. We have tens of thousands of workers engaged in the world’s most creative economic engine. We live in a paradise that millions of people visit each year. And we generate more revenue from each of our hundreds of thousands of acres of agricultural land than most anywhere in the world. For Santa Cruz this is – or at least ought to be – a great opportunity time. The scope of new technologies that expand economic productivity are within our “wheelhouse.” The big data, robotics, artificial intelligence, agro-ecology, and genomics that are fundamentally changing our economic systems are also focal points of UCSC researchers and local entrepreneurs. It is the nexus of these two trend lines… the chaotic forces that want to tear us apart and the evolutionary forces that create extraordinary opportunity for future well-being that we are about. The Chamber’s Role It is in this slightly schizophrenic context that the Chamber and chambers and business associations everywhere must operate. It seems obvious to us that there is a critical role to be played in every community by those actively engaged in the economic processes of that community: the people who depend upon the community for their income, the people who own and manage its productive assets, the people who support and regulate economic opportunities, and the people who finance economic activity. But business associations must adapt to the changes in the operation and values of economic environment in the same way that every other participant must. The Chambers of old have been gone for decades, but in order to remain relevant we must be constantly adaptive.