Regional Leadership Conference

October 10, 2005

Remarks of Gov. Christine Gregoire
Regional Leadership Conference As Prepared
Oct. 10, 2005

Thank you for inviting me to join your outstanding line up of speakers. Thank you to the Chamber and the Prosperity Partnership for sponsoring this event. I especially want to thank Tayloe Washburn and Maud Daudon [da-don] for co-chairing this year�s Leadership Conference. You�ve done a terrific job of building an agenda that provides for much needed discussion of our new economic future and, more importantly, move us forward.

The conference subject this year [�Competing in a Flat World: How the Puget Sound Can Succeed in an Integrated Global Economy�] couldn�t be more timely. We are the most trade dependent state in the nation, with one in three jobs dependent on trade. It�s critical that we find our role in this new world now, or we�ll quickly fall behind.

But, the title of this conference is to a certain extent incomplete. Because, as Richard Florida writes in the current Atlantic Monthly, the world is also spiky.

Florida observes that the bulk of innovation is happening in cities that attract a critical mass of talented, creative people, or �peaks,� as he calls them. This causes their economies to develop at a much faster pace than more spread out, rural areas, or �valleys.�

He says that while the world may look flat to some, it�s mostly because the economic and social distance between the �peaks� have become smaller. Not because the prosperity of the flat world is being distributed equally.

Our challenge in the coming years is to bring the economic growth and potential of Thomas Friedman�s flat world to Richard Florida�s languishing valleys. And to make sure the fruits of our innovation-driven economy touch all parts of our region.

To me, that is the role of government. To help facilitate innovation, transfer ideas to products, create a world-class education system, make smart investments, and make sure our prosperity touches all of us, not just a few.

I support each of your conference outcomes: a jointly developed international trade message; funding freight mobility and transportation fixes; education reform; mentoring and assistance for our small and mid-size companies; and a regional strategy for building our relationships with other countries.

These outcomes are very much in alignment with my agenda as governor. And I can tell you I�ve had the opportunity to see the flat world firsthand, and we�re changing the role of government to make sure Washington state is competitive in the global economy.

Washington is almost like it�s own small nation in this new world economy. And we are uniquely suited to succeed in it.

We are innovative, we have the human capitol, the research institutions and the natural resources to take full advantage of the opportunities global trade presents. I believe the role of government is to support and encourage creativity, innovation, new products, a world-class education system and smart investing.

It will take the shared vision you have outlined. Government can�t do it alone. Business can�t do this alone. But government can work in partnership with our business, agricultural and educational communities to build our new economic engines.

Our first job together is to build the right infrastructure. As you have so rightly identified, we need to make up for long-ignoring some major transportation problems. We need to make our roads and highways safe and provide for better movement of goods and services.

Last session, our legislature took a bold step, one that was not politically popular, in supporting gas tax funding to help meet our transportation needs. It�s a safety issue, as well as an economic issue. And it�s a quality of life issue, with too many of us stuck in traffic too much of our time.

Both the viaduct and the 520 bridge are at risk. I�ve been told by our transportation engineers that if the Nisqually earthquake had lasted just 15 seconds longer, the viaduct would have gone down. It carries 100,000 people a day. These roads and bridges are our levees. We need to learn the tragic lesson that New Orleans taught us about what happens if we don�t do what we know we need to do.

Two weeks ago, the vice governor in Hyogo, Japan shared with me their experiences from the 1995 earthquake that devastated the city of Kobe. One telling lesson is that 10 years later they still have not recovered economically.

Throughout my trade missions in Asia and Europe I heard consistently from business leaders about transportation. If they are going to do business with us, they want to know that their goods and their people can get where they need to be. They can�t afford to have traffic hamper their operations.

Your second outcome calls for more freight mobility, which is also a priority of mine. Our ports are major economic engines, and key partners in our shared vision on trade.
One of the best ways to build on our vibrant trade economy is to improve the shipment of goods and services here in our region. Washington is the door to Asia, with 93% of Seattle�s total container volume moving between Seattle and Asia.

According to a 2003 Economic Impact study by the Port of Seattle, it found just under 200,000 jobs that owe their creation to the Port. Along with $12 billion in goods that passed through its terminals. And that meant $626 million in tax revenue for state and local governments.

Now, the Port of Seattle and the Port of Tacoma have come together to kick off our Ports Initiative. To seek a shared 20 year vision for keeping our competitive advantage on trade. Products arrive at our ports that are going to destinations across the country.
Instead of competing with each other, we must compete with California and British Columbia if we want Washington State to remain the preeminent door to Asia.

Transportation infrastructure is very high on the list for our potential partners from overseas. But there is another need I heard even more about repeatedly in my meetings in Europe and Asia: education. We need a world-class education system.

Judging by the third outcome organizers have identified for this conference - education reform - I�ll bet this comes as no surprise to most of you.

Companies want to know that we have a well-trained, educated, modern workforce. And they also want good schools for their children and their employees children.
Businesses want flexibility in their workers - people with skills that can adapt to new technology every few years. That�s what is now required to meet the new competitive challenges in the global marketplace.

And when we evaluate the educational system in our own state, we shouldn�t compare it to other states. To do so, we are comparing ourselves to a mediocre educational system.

To survive, we need to go toe to toe with Japan, Germany, Ireland, the top schools in India. Or any number of countries that invest more and get better results from their schools than us.

That is why last legislative session I asked for an education budget, despite tough economic times. The best economic investment our state can make is in an educated workforce, and that�s what I made sure our budget accomplished.

We invested in Pre-K education, because we need to ensure every child is ready to learn when they start kindergarten.

The budget provides an additional $138 million to reduce class sizes in the next biennium. It also provides $139 million for cost-of-living increases to teachers and other public-school staff. We will also direct $25 million in new funding into high schools to help struggling students meet tough new graduation requirements.

And we�ve had a �no vacancy� sign up at our colleges and universities for too long. I fought for a budget that included enough enrollments to cover the projected need over the next two years. I want to thank the Legislature for sending me a budget with funding for more than 7,900 new enrollments, which more than covers that projection.

But we also need to re-evaluate our education system. We need to take up the challenge of Bill Gates and create an educational system for tomorrow�s workforce- not yesterday�s. We can�t get there with piecemeal fixes. Which is why, I have launched an 18-month, comprehensive study of our entire education system, from top to bottom, called �Washington Learns.� I care so much about this initiative, I am personally chairing the work of the committee.

The Washington Learns effort is an initiative to break down the barriers between stages of education: pre-K, K-12, higher education. We need to see the education process as a seamless whole. And while we need to address shortages of key degrees, we can't assume that a few changes here and there will address the need for an education strategy that meets the global challenge. We need to look at the entire cycle of education.

Your fourth outcome, to create and help companies grow is going to take more than traditional support and incentives. There is tremendous potential for our small and mid-sized companies in the global economy. State government can help open the doors to entirely new industries to help our cities, small towns and rural communities build new economic foundations.

Looking at emerging industries, we have tremendous opportunity in alternative energy, the life sciences, and new agricultural markets.

Low energy cost is no longer an asset for us in Washington State. We need greater energy independence. I�m excited about our potential in this area. We�re pioneering new alternative energy technologies. Because of our unique mix of resources, our state is built to lead the world in bio-fuels. We have the vibrant agricultural, industrial, research bases and shipping capacity that bio-fuel companies need to grow.

We�re helping our farmers develop a second cash crop by investing in anaerobic digesters that turn waste from livestock into usable products such as fertilizer and even electricity. Today�s agricultural waste is tomorrows cash crop.

With wind power, I recently signed a permit authorizing the construction of a new wind power �farm� in Kittitas County. With 100 to 150 wind turbine generators producing more than 300 megawatts of electricity that Puget Sound Energy purchased - enough to power as many as 100,000 homes. All with zero emissions!

And with solar power, last legislative session I signed two pieces of legislation to spur innovation and growth of solar energy businesses in Washington. One to attract solar power suppliers, and one to encourage its use among businesses. And yesterday I met with a top supplier of solar panels from Norway looking to expand their existing operations in Moses Lake.

State government can also play a vital role in helping our agricultural community support a new vision for its products. We are known worldwide for producing some of the highest quality, safest agricultural products. And because of our efforts, demand for them is increasing.

Our agricultural future lies in high quality products, not quantity. And to support this new vision, we must make investments in agriculture research and development. Again drawing on our two research institutions to pioneer new varieties of apples, the development of disease resistant crops, less environmentally harmful pest controls, and better watering methodologies.

We�ve also taken steps to lead in the quickly growing life sciences, which depend on our agriculture, and our schools. Our higher education institutions, particularly our research institutions, are major economic engines in our state with much potential.

But we have not made the kind of research investments we need to lay a foundation for the future. With the legislature�s help, we created the Life Sciences Discovery Fund, which could be worth as much as $1 billion over the next 10-15 years. This fund will keep Washington at the forefront of the highly competitive world of life sciences research.

This investment, bought us our ticket of admission to a market with limitless possibilities.

Now, we must rally our regional assets around a new vision. My vision for the life sciences is about predictive and preventive medicine. It is about wellness through agriculture.

With our two research institutions, the Fred Hutchison Cancer Research Center, the Gates Foundation, Nobel laureates and much more - we have �the right stuff� to succeed in life sciences. But we need to turn research into products and services.

One commonality that links the industries we�ve discussed so far � alternative energy, agriculture, the life sciences, � is they are mainly small and mid-sized businesses. And I believe your fifth outcome speaks broadly for our need for community, and collaboration. In Washington, we�re doing that between our state and small and mid-size business.


I�ve been around the world knocking on doors and drumming up millions of dollars of business for Washington State companies by selling our companies.

On my trade mission to Europe in June, I saw Washington State products and services influencing the global economy on a grand scale, like Boeing planes at the Paris Air Show. And in quieter, but no less significant ways, such as cutting edge biotech research from the Puget Sound being courted in Germany. In France, they wanted our wine. In England, they couldn�t get enough of our cherries.

European travel writers and tour operators told us about the attraction of the Pacific Northwest to European travelers. And underscored the importance of that 11.6 billion dollar tourism industry to our state's economic vitality. Now, I'm pursuing a four-state regional tourism marketing cooperative with my counterparts in neighboring states. To capitalize on our competitive advantages in tourism, and the emerging eco-tourism market.

And on my trade mission to Asia, we flew in on a Boeing plane, drove past a skyscraper owned by Microsoft, and arrived at a hotel to enjoy a Starbucks coffee.

We focused on promoting small and mid-sized businesses because in both China and Japan a Governor can open the door for companies that otherwise would have a hard time breaking into Asian markets. Relationships matter.

Delegates on the mission reported over $6.4 million in initial sales, with $24 million in potential future sales. It�s because of our longstanding relationships, kept through both good and bad times, that we made this happen.

I have also made a commitment to regional economic development and cooperation. Governor Kulongoski of Oregon and I are developing an economic development plan for Southwest Washington and Multnomah County, Oregon. And the four Northwest states are developing a joint tourism strategy.

Tomorrow I will meet with Premier Campbell to discuss how Washington and British Colombia can work together on important issues including trade, tourism, transportation and education.

The 2010 Olympic Games are a great opportunity for us to work together. In Washington we have the Governor�s 2010 Olympic Games Task Force Co-chaired by Congressman Rick Larson and former Congressman and State Transportation Secretary Sid Morrison. Our primary mission is to ensure the success of the 2010 games.

And while this conference has been hard at work putting together a shared strategy for our region to succeed, I�ve headed a similar effort in Washington State.

On September 7, I launched my Global Competitiveness Council in Washington State. Because I firmly believe that we can�t continue to compare ourselves only to other states and regions. But instead we must evaluate our global landscape to determine what to do to create a truly globally competitive region. For both today and tomorrow�s business models.

And I have the right people at the helm. I asked Judy Runstad, a partner at the law firm Foster Pepper, and Alan Mulally, chief executive of Boeing�s commercial-airplane division, have agreed to serve as co-chairs.

First, the State of Washington will be recognized throughout the world as a place for business to thrive, a hub of distribution for products and services, a source of world-class products and services, and an ideal tourist destination.

Second, the State of Washington will be positioned as the most progressive, globally competitive state in the US, committed to a world-class educated and trained workforce.

Third, the State of Washington will have a comprehensive and effective international trade strategy to include relevant state agencies, local and regional government and non-governmental organizations, business, labor and educational institutions.

The Council�s task is challenging, but not impossible. I�m confident they�ll provide the compass our state needs to chart our unique course in the global economy.

Thank you for having me here today.

Like Louis Pasteur said, and Friedman quoted in his book, �Fortune favors the prepared mind.�

This conference will help our region to meet these challenges head-on. And come up with creative and viable solutions that find our unique niche in the global economy. That meet the challenges outlined in Thomas Friedman�s Flat World. And close the prosperity gaps of Florida�s Spiky World.

I�ve told you the constructive things government in Washington State is doing. We�re going to remain strong. We�re going to fix what�s wrong and build on what�s right.

Now, we have to apply the same problem-solving mentality we see in this room today back in our businesses and governments. And put all this talk into action. Let�s get to work!

Thank you.