California is making a massive $1.3 billion investment in its trade and logistics infrastructure

California is one of the most highly connected states in the nation — it hosts the California Intelligent Workforce Institute, for example, a nonprofit network of research institutes dedicated to helping companies innovate by…

California is making a massive $1.3 billion investment in its trade and logistics infrastructure

California is one of the most highly connected states in the nation — it hosts the California Intelligent Workforce Institute, for example, a nonprofit network of research institutes dedicated to helping companies innovate by making America competitive in the global economy.

But the state’s manufacturing and distribution infrastructure is not able to keep up. So, to bolster its access to and capacity for job-creating trade and logistics, California is considering a massive $1.3 billion investment in this infrastructure. The funding could be used to build new data centers and warehouses.

Silicon Valley’s Young Invincibles and a coalition of more than 50 trade associations and companies, such as UPS, Macy’s, and Amazon, are leading this effort. The state also is bringing in West Coast business leaders and government officials to advance the plan. Yesterday, my organization, the Manufacturing Institute, announced its support for the investment.

California leads the nation in multiple international sectors, including aerospace, technology, aerospace and defense. Its economy and manufacturing sector are so crucial to the state’s economy and tax base that a robust infrastructure at home is crucial to America’s competitiveness in the global economy.

According to the Council of Foreign Relations, the net rate of per capita output among the 45 most developed economies has fallen from 4.7 percent in 1980 to 1.4 percent in 2015. Meanwhile, those economies have invested $22.5 trillion in infrastructure, during that time. The U.S. is hardly close to catching up.

California’s infrastructure can do better than low levels of investment. As its population and manufacturing infrastructure grow, it will be necessary to better ensure its companies can satisfy export demand. This investment will go a long way toward laying the foundation for a robust manufacturing and logistics infrastructure in California, and serving as an engine for economic growth.

The point is to harness ideas to propel growth, sustain quality jobs and transform jobs into revenue, making investments in strong infrastructure a formula for prosperity in California and the U.S.

California is already putting in place a lot of infrastructure to support its exports. The state’s recently enacted infrastructure bill, called SB1, includes $8.4 billion for airport upgrades, significant investments in modern water infrastructure and investments to improve aging roads and bridges.

A stronger supply-chain infrastructure will open up growth opportunities for manufacturers in California. Because manufacturers are expected to grow their production to handle global demand, projects are needed to improve their supply chains so the goods they make are available globally to be shipped.

This infrastructure will not only help companies locate in California and grow their business, but also provide new opportunities for companies to export and conduct business internationally. As one example, nearly half of the states in the nation have data centers, and California could benefit by hosting these data centers and using these centers as logistics hubs.

A successful strategy for creating trade and logistics infrastructure and training its own workers will strengthen manufacturing and create new jobs at home. As California also makes important investments in innovation, it can keep its economy and manufacturing strong for generations to come.

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