To Live and Prosper in L.A.

Projections: A look 20 years hence sees a thriving economy and good living for all. Some wishful thinking is involved. Series: CALIFORNIA TODAY AND TOMORROW: An economy in transition. Last of two parts. Los Angeles Times (pre-1997 Fulltext) - Los Angeles, Calif. Author: PATRICK LEE Date: Feb 1, 1993 Start Page: 1 Section: Business; PART-D; Financial Desk Text Word Count: 1760 It's early morning on Feb. 1, 2013, and the sun is already up over a relatively smogless, new Southern California. Crowds of executives pour out of Union Station, now a regional transportation hub. Some board electric trams to downtown offices or to the Angel's Flight railway up Bunker Hill. Downtown is just one of 18 multiethnic "urban village cores" that have emerged in the last 20 years, where major businesses have been joined in mixed-use developments with retail, entertainment complexes and high-density housing, linked by light rail. Southern California's economy has changed drastically in the last two decades, driven mainly by growth of the population to 20.5 million, 5 million more than in 1993. Manufacturing-especially defense and aerospace, once a mainstay of the economyhas dwindled. Services, especially in finance and health care, have mushroomed. International trade, high tech, entertainment and tourism-always key industrieshave assumed even greater importance. The changes have created stark contrasts. In thousands of offices, business proceeds briskly, with men and women in dark suits speaking into computer telephones as they tap plastic keyboards. The offices house booming financial and professional services industries and the city, county and state government offices that make Los Angeles the bureaucratic hub of California. But the rise of technical and service industries has disenfranchised a large pool of unskilled workers who have scrambled for other livelihoods. Some have moved into the shadows of the gleaming towers, on downtown's main market street-the Broadway Mercado, which is closed to traffic. It resembles a Middle-Eastern souk, with its tented stalls, push-cart vendors and portable food stands.

The Mercado is an example of the gritty commerce that has sprung up in swap meets and informal alleyway markets throughout Southern California, where business is transacted in a babble of languages: everything from Thai to Somali, with all the permutations of Central American Spanish thrown in. Other hapless residents crowd nonprofit neighborhood feeding centers that have sprung up to deal with the chronically unemployed. The contrast persists throughout the region, where traffic remains heavy despite the advent of subways, trains, car-pool lanes, buses and other traffic management methods. Average freeway speeds remain about 43 m.p.h., about the same as in 1993, despite a 30% increase in traffic. Hollywood Boulevard has undergone a major redevelopment in the last 15 years. The marquee of the restored Chinese Theater advertises this year's big hit: the $170-million remake of "It's a Wonderful Life," directed by Max SpielbergSteven's son-and starring grown-up "Wonder Years" actor Fred Savage. The industry symbolized by Hollywood has similarly grown and transformed itself. Demand for locally produced movies, video and other entertainment products has soared around the world as new currency laws and technology have eased the international distribution of movies, televideo and entertainment software, nicknamed "code." Hollywood studios have forged an uneasy alliance with the software firms of southern Orange County and hardware makers in Asia to produce high-gloss, interactive code programs featuring major stars and directors. Last year's biggest seller was the eighth installment of "The Indiana Jones Chronicles." In Long Beach, a revitalized waterfront lacks the perennial money-losing Queen Mary, which was closed down in 1998, towed out to sea and sent to the bottom as an artificial reef after it deteriorated beyond repair. But tourism in Southern California is bigger than ever. The Walt Disney Co.'s 14-year-old Westcot Center theme park, built around venerable Disneyland in Anaheim, now attracts as many visitors as its aging Orlando, Paris and Tokyo counterparts. A new Disneyland in Sao Paulo, Brazil, opened six years ago, funneling new money back to Burbank. In the port areas of Los Angeles and Long Beach, the surge in trade is evident as massive, hydrogen-powered container ships offload their cargoes. Automated cranes load containers onto flatbed cars of an electricity-powered train sitting on land reclaimed from the harbor in the late 1990s. Total tonnage into the twin ports has soared to nearly three times its 1993 level, a consequence of new trade with Latin America and Asia, as well as Southern California's continuing role as the main conduit for cargo to the rest of the United States. In Torrance, a spotless computer-operated factory shows the new face of the region's manufacturing sector. Workers in blue smocks and white caps fashion controllers for electric cars, which have been required in the state since 1998.

The factory is one of several small- and medium-size shops that managed to survive the wrenching shrinkage of the once-prominent defense and aerospace sector after the breakup of the old East Bloc in the 1990s. Closure of the largest and most inefficient defense contractors left a core of lean companies that now specialize in research and design, engineering, machining and custom assembly. With help from county and state governments, the survivors were able to wean themselves from government contracts and turn their skills to niches in the commercial sector. Other shops have joined into consortia-such as the 10-year-old Los Angeles Regional Aerospace Network-that jointly market the services of members to primary contractors in the United States, Asia and Europe. Now there are signs of a renascent boom in federal contracting as the military services begin to upgrade conventional equipment, built back in the late 1980s, that has aged beyond its normal service life. Along Florence Avenue, where rioters rampaged more than 20 years ago, shops, banks, supermarkets and businesses now thrive. Retraining and education were key components in efforts to revitalize South-Central Los Angeles and other innercity areas. In the late 1990s, state and federal governments increased their support of inner-city schools. Better education-and improved law enforcement techniquesdramatically reduced the influence of gangs in certain neighborhoods. Crime rates fell. New business flowed in, and the area's standard of living rose. On the business front, the area's revival didn't depend entirely on massive industrial projects. One relic of that effort-an electric auto parts plant that was built in 1998-now bears a sign saying the plant is down for a two-week "turnaround," or shutdown, during which maintenance crews service the plant's machinery. The plant is facing hard times because market forces, foreign trade and strict pollution rules have made it uncompetitive-much like plants built in Watts after the 1965 riot. Rather, the small, barely noticed enterprises started by grass-roots groups-led by local clergy, business people and bankers-are the ones that eventually helped retrain local youth and create jobs. One business, a revival theater that shows old-fashioned 35-millimeter films, draws elderly people interested in a reminder of how they once viewed the future. The film: "Blade Runner," set just six years from now. --The previous scenario is the opposite of "Blade Runner"-the 1982 film that depicted a decaying Los Angeles abandoned to the poor, riven with violence and inundated with acid rain. Rather, it is a highly optimistic projection of Southern California's economy, based on best guesses, statistical projections and some wishful thinking.

The scenario runs counter to some expectations that the region will degenerate into a nightmare of high unemployment, inadequate housing and permanent gridlock as the population swells and business flees. But economists and others say that current problems will recede by the time of this scenario and that the natural advantages of the region will reassert themselves: * The region straddles major trade routes. * Southern California has a skilled work force and a lot of technical and design expertise. * It boasts a well-developed research and development and university system. * It will remain a center for new trends and fashion, and the international demand for locally produced entertainment products is already soaring. * The region will continue to be fertile ground for entrepreneurs. Not that there isn't a lot to be worried about. Recession-racked Southern California has a long way to go before it achieves any measure of the success described above. The shrinkage of the region's defense sector, slack housing markets, excess commercial real estate space, impending state budget crises and layoffs because of mergers will continue to bedevil the local economy well into the 1990s. Crime, pollution and traffic remain serious impediments to economic development. By 2010, the population in the six-county region will balloon, mainly because of new births, according to the Southern California Assn. of Governments. That growth could put a strain on the region's housing, employment, transportation and other infrastructure, SCAG says. The population growth might widen the gap between rich and poor, and between the unskilled and the educated, who will easily find a place in the region's hightech economy, some economists say. But by 2010, the current recession will be long over. Clean air and rapid transit goals are scheduled to be reached. The proposed North American Free Trade Act will have been in place for more than a decade, with the resulting shift of jobs or trade markets. Growth will mean there now. That will mean an to 10.1% in California association has backed as 12%. will be 10 million jobs in 2010, compared to 6 million unemployment rate ranging from 5% to 8% in 2010, compared at the end of last year, according to SCAG. The off an earlier projection of unemployment rates as high

Even many of the unskilled will find a living in a thriving underground economy: fixing cars, gardening, doing apparel piecework, selling and buying in swap meets or street markets like those in Santee Alley in the downtown Garment District. Syd Mead, the Hollywood concept designer who worked on "Blade Runner," is partly responsible for perhaps our most negative future vision of Los Angeles. But even he argues it's better to aim high than low, whatever the future holds:

"My own personal feeling is that we should rehearse for as bright a future as we can."

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