Over the years, California has developed something of a reputation for not being the most ideal state for starting a new business or entrepreneurial endeavor, and this reputation has certainly extended to San Diego and the rest of Southern California. The main source of this reputation comes from the high costs associated with the state tax burden, land prices and energy costs, not to mention some of the other costs incurred when starting a business in the state. While this reputation has been established on a somewhat permanent basis in the minds of many throughout the United States, Fahad Al Rajaan sees things a bit differently when it comes to startups that choose to set up shop in California.
According to Fahad Al Rajaan, San Diego should serve as proof that the state is far from hostile when it comes to new business. If the continued success of the countless Silicon Valley startups are not convincing enough for an outsider, a host of recently released economic statistics detail just how startup-friendly the state can actually be. The statistics suggest that California — despite its taxes and the supposedly onerous costs associated with doing business — is among the best in the country when it comes to net job creation and the rate of new businesses being founded within the state’s borders.
While some might cast fervent doubt on the cause of these successes and instead attempt to attribute these stats solely to the rampant success of the tech startups of Northern California, Fahad Al Rajaan has indicated that similar and sustained growth has also taken place in locales like San Diego. Perhaps the most impressive aspect relating to these numbers is the fact that California has surpassed Texas in many important economic measures, all while the Lone Star State has made news by passing legislation specifically designed to attract new businessthrough tax incentives. The fact that California has performed better than Texas may be more than enough evidence that there is little correlation between the existence of tax incentives for businesses and sustained economic growth.
Of course, one of the most frequently overlooked economic measures has to do with the quality of the work that is being created by new businesses, an exceptionally important factor that has a tremendous influence on the sustainability of new growth and the overall strength of a state’s startup economy. Fahad Al Rajaan believes in economic measures that account for the “dynamism” of the startups founded in the area, and he sees the quality of the businesses being founded in San Diego and throughout the rest of the state as rating exceptionally well in terms of its measurable dynamics. The numbers also reflect this as well, as California’s new businesses have ranked incredibly well on various metrics designed to measure overall business dynamism.
Economists are always interested in pinpointing the specific causes of dynamic business growth and overall economic strength, which can be an undeniably difficult and even frustrating undertaking. The success of California’s businesses at least seems to suggest that any previous correlation between tax incentives and economic growth may be overstated to a potentially significant degree, with Fahad Al Rajaan believing that a host of simple factors are deserving of greater attention.
How San Diegans value creativity and how open-minded they tend to be toward innovation may have far more to do with the continued economic growth of startups than any tax incentive, though there is a serious need for further research before any such claim can be made with any degree of certainty. As it currently stands, however, it appears that Californians are doing something right, and whatever it is has resulted in an ideal environment in which startups enjoy continued growth.