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8/20/2010
05:00 PM
Bob Evans
Bob Evans
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Global CIO: Schwarzenegger Shocker: California Strangling Entrepreneurs

In his weekly video address, Governor Schwarzenegger explains why it takes 10 times longer to open a business in California than in Texas.

Did you know that California, home to hundreds of tech companies including some of the world's biggest and most-influential, drags out the process for approving the launch of a new business to almost 250 days, while Texas gets entrepreneurs on their way in only 22 days? If not, don't feel bad--the Governator himself didn't have a clue, either, as you'll see in this video.

If it's true that late is better than never, then perhaps we should feel relieved that after being in office for seven years, California Governor Arnold Schwarzenegger has only just now found out that his state's massive and suffocating bureaucracy is functioning as an immovable impediment for entrepreneurs, as pointed out by Ed Morrissey at HotAir.

In his current weekly online address to California citizens, Schwarzenegger tells the story of a businessman who runs a chain of restaurants called "The Salad Bowl" in Texas and Colorado.

According to the governor's story, this businessman decided a year ago that he should expand into California as well, and selected a site in the southern part of the state and set to work preparing to open the first of what he hoped would be numerous restaurants around the nation's most-populous state.

But then the not-so-invisible hand of state bureaucracies stuck a, uh, middle finger into his plans and as Schwarzenegger tells it in this 5-minute video, a swarm of inspectors descended on the would-be restaurant and triggered the interminable flood of restrictions, paperwork, regulations, and the sheer abuse of power.

Schwarzenegger explains that numerous inspectors began visiting the work site--mechanical inspectors, safety inspectors, health inspectors, building inspectors, and more--with none of them having any clue what the others were doing or when they were doing it or why. The governor tells of how the owner followed closely the code outlined by one inspector for the installation of a sink and received that inspector's approval, only to be told by a different inspector that no, the sink was unacceptable in its current location and would have to be moved 6 feet.

Other inspectors put the owner through the run-around in getting rest-room signs of the proper color, while others told him the glass shield in front of the food-preparation area had to be between 26 inches and 30 inches high. So he installed it at 28 inches high, but when the inspector returned he told the owner that the owner had misunderstood and would have to take that glass shield out and replace it with one exactly 30 inches high.

Faced with such mindless nonsense, it's a wonder that even the most-determined entrepreneur can gain approval from such fools in 250 days because it's clear they have no interest in helping him get his business off the ground.

And my point in sharing this sorry story is that big problems always start as little problems. And while we all might see this story and chuckle a bit while also thanking heaven that we're not the ones on that bureaucratic rack, it seems to me that in these perilous economic times, the state that's home to more IT companies and entrepreneurs and innovation than any other state in the union should be setting a national standard for supporting the efforts of businesses of all sizes and shapes.

As I recall from when I was a child about 100 years ago, the U.S. used to dominate the world market for automobiles and steel--and how are those industries faring?

But the Governator tells us not to worry--he says on the video with his biggest smile that he called his office of economic development and asked them to look into the mess the state was making at The Salad Bowl, and that his intercession led to some breakthroughs and voo-wuh-la, the restaurant is now open, some 250 days after its paper chase began.

It apparently took Arnold Schwarzenegger 7 years to learn that his state's bureaucracy is strangling the efforts of entrepreneurs and chasing business and revenue out of the state. Let's just hope it doesn't take California another 7 years to fix the mess its choking regulations have created.

Bob Evans is senior VP and director of InformationWeek's Global CIO unit.

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