August 30th, 2009

The Conversation: A newcomer to California – and seeing the bright side
Hosted by Daniel Weintraub, Sacramento Bee, August 30, 2009
Picture by Anne Chadwick Williams

Steven Currall still believes in the California Dream.

Currall, a native of Missouri, started last month as dean of the UC Davis Graduate School of Management. He comes to the Sacramento region by way of the London Business School and Rice University in Houston. An expert in innovation and entrepreneurship, he was drawn here by Northern California's reputation as a hotbed for both.

When I interviewed him last week, Currall evidenced an outsider's perspective about problems that many longtime Californians see as the end of our state as we know it. To Currall, the state government's dysfunction and its inability to balance the budget, resolve conflicts over water or address problems in kindergarten-through-12th grade education are mere "speed bumps" that the private sector will get past with little trouble.

Although he is more concerned about tax and regulatory policies that might suppress innovation, even there he sees a glass half full: His vision for using the graduate school as an incubator for new green-technology companies depends in part on the government's plans for aggressive regulation of greenhouse gases to fight global warming.

Currall thinks his school can be for the Sacramento region what the Stanford Business School has been for the Silicon Valley: a source of management expertise that will help engineers and other entrepreneurs turn their ideas into successful commercial enterprises, and in turn transform this region into a global leader in clean energy technology.

– Daniel Weintraub

Edited excerpts from an interview with Steven Currall.

What attracted you to California and the University of California, Davis?

Davis has got this amazing confluence of assets. The quality of the university, world-class university. The graduate school of management is relatively young, only 28 years old. But it's had a terrific rise in visibility and impact. And it's had a real strong commitment to quality. Quality of faculty. Quality of students. So I saw that as a great platform, a great foundation.

And also, it's an opportunity to grow the school. The school is relatively modest in size. But I like to consider myself an academic entrepreneur; I like to grow and build things in an academic setting.

And Davis just seemed like an ideal opportunity. A great foundation. Good momentum and trajectory, but still an opportunity for me to have some, for me to make a contribution.

You've talked about the California Dream. Haven't the current conditions tarnished that image?

I think the current conditions are just a small speed bump. I'm not troubled by them. I think the ethos here is so committed to innovation and being on the edge, and exploring new things, I think that is going to carry us through. I think we are going to innovate our way out of this, I hope. And the Graduate School of Management is going to contribute to that. One of our main strategic foci is innovation. We've got a great history of doing that.

We've got a center for entrepreneurship which is very successful. And it's consistent with my hopes and aspiration for the school, because I want the school to fulfill its scholarly and educational mission, but I think the school has a responsibility for promoting economic prosperity as well. Not only should we educate MBA students to lead and run existing corporations, but I think we have a role in actually starting companies and job creation. I'm hoping we can make a contribution there, as well.

What does the California Dream mean to you?

Californians are not encumbered by confusion about what matters and what doesn't matter. I think that my observation of Californians is that their priorities are on what one can achieve, what one has done, what one might someday do. My experience on the East Coast is different. It's much more retrospective, much more backward-looking, what family are you from or what school did you go to. I think California people don't care about that very much, and I find that appealing. It's much more of a meritocracy.

People are unconcerned with exactly where you're from or what your ethnicity is and what your gender is. How can you contribute to what we are trying to accomplish seems to be the key question in the minds of Californians. I love that, and I think that's very exciting. I find that refreshing and liberating. That's sort of what I see as the California Dream.

Is our focus on entrepreneurship the cause of those attitudes, or the result?

It's both a cause and an effect. I think the California ethos is probably more the cause of the entrepreneurship dynamic here. I'm from Missouri originally, and my father used to joke that the people from Missouri are the ones who didn't have the stamina to make it to California.

The Californians are the ones who really, 'We're just going to go all the way until we hit the ocean.'

I like that can-do attitude. That and the quality of life out here. The great universities here, the University of California system and the great private schools, Stanford and Cal Tech and others, have been human capital magnets. They draw people in. And with all that intellectual talent and creativity, then, the financial capital essentially follows human capital. It's not the other way around. With so much of that in California the financial capital came in, and we had the Silicon Valley dynamic. Then there is this critical-mass effect. You have amazing intellectual resources, then you've got the financial resources as well, and you put that all together and that's what's given rise to the whole entrepreneurship phenomenon in California.

California, it is sort of the envy of everywhere in the world, more specifically Northern California.

Northern California's the gold standard for everybody around the world in terms of innovation and entrepreneurship. I know that because I just spent 31/2 years in Europe, and I certainly spent a fair amount of time in Asia and heard the same thing there. To me it's exciting to get in on that whole dynamic and see if I can make a contribution as well.

Won't all the problems we are having get in the way of innovation?

Maybe I'm unrealistic, but somehow I feel the innovation momentum we have is going to push through this. It might be slowed down, but it won't be arrested, it won't be stopped. It's too big to stop. But you're right, the plumbing has gotten clogged up a bit in terms of the infrastructure. And I am concerned about that. One of the interesting things about Davis being so near to Sacramento is I hope we are in a little bit closer touch with all of that than even folks in the Bay Area.

To what extent does entrepreneurship depend on a well-functioning government?

Not that much, I don't think. What will hurt us more is tax policies that make it very difficult to start a company, grow a company. I'm very mindful of environmental and sustainability issues, and that's one of the things I like about California.

My hope is we don't swing so far that it makes it impossible to start and grow new companies here. If the government regulations begin to have that kind of impact, then I'd begin to get more worried.

But there are a lot of places that have flourishing innovation climates and entrepreneurship that are far worse than California in terms of government policies and bureaucracy. I just came from the U.K. for 31/2 years. They didn't actually invent bureaucracy. But the British are pretty good at it and have been at it for several hundred years. Despite that, there's a lot of interesting things going on in London from an entrepreneurship standpoint.

There's a certain spirit of entrepreneurs where they are sort of intrigued with the idea of doing it despite, succeeding despite, the government. 'Yes, we know it's hard, but we're entrepreneurs and we are going to overcome those obstacles.' I feel that in California.

It's too early to tell whether these kinds of government policy challenges are going to have a significant cooling effect. I hope we can have some innovations in government in the same way we've had innovation in the for-profit sector.

How can your business school help create new companies?

There are three key ingredients for any successful start-up company.

The example I often use is a medical device. The practicing physician will know a great deal about devices and instruments that he or she uses in surgery. They know what they need. They have to be partnered up with people who have technical knowledge. The engineers are the ones who can solve technical problems. If a physician says I need an instrument that can do A, B and C, engineers are great at finding technical solutions to that. If you have people who know what the problems are, and people who have technical expertise who can devise solutions, then the third key ingredient is management talent.

Taking the knowledge of the demand and technical solutions and executing that into a successful commercial business. That's where the business school comes in. That's where our students are strongest.

They fulfill that role of business execution, management knowledge, how to build a company, scale up, how to create business structures, how to finance a company. Those are, our faculty in the school study those dynamics, marketing, finance, accounting, organization. That's what our students can contribute to creating new companies.

Fifteen years from now, how will we know if you succeeded?

If the Sacramento region emerges as a recognized national and global hub in energy and sustainability and in life sciences. I think that's where the promise is and that's where a lot of our attention is going to be focused. There's no need for us to try to focus on information technology and telecommunications.

That's been done. Wehave an interest in those things and the application of technology to energy and life sciences, but we are looking for ways in which the Sacramento region can really differentiate. I think there is real promise, especially in the area of sustainability and clean tech.

I think Sacramento really has a shot at being a globally recognized hub. Why is that? Because Davis has significant intellectual capital and resources in these areas, and that cannot be built overnight. That takes decades to create and we have that. So we have this great platform already.

The other interesting thing about clean tech and sustainability is that there is this huge government regulation role. And those innovations are not going to make it to the marketplace in exactly the same way as, say, computers or software, where there was some role for government regulation but less so. I think there is more of a role for government regulation. And my hope is that being in the Sacramento region, we can be more sophisticated about understanding that role, and we can teach our students, make them more a savvy about the role of government regulation in promoting clean tech.

Those are some unique characteristics and assets we have in Davis and in Sacramento that we can leverage. In 10 or 15 years, if the region is really acknowledged as one of those leaders and the Graduate School of Management is acknowledged as a contributor to that in the same way as, say, Stanford Business School was in Silicon Valley, then we would feel good about that kind of contribution.