Peters Sounds Warning : Southland Growth Tied to Quality of Life

Although its growth and affluence make Southern California one of the “most exciting economies on the globe right now,” business consultant Tom Peters warned Monday that the area’s future could be endangered if the quality of life is allowed to decline.

“We still have a chance to mess it up,” Peters said in remarks preceding an afternoon lecture sponsored by KOCE-TV in Irvine. More than 1,000 Orange County business executives attended the session.

Author of the 1982 best seller “In Search of Excellence: Lessons From America’s Best Run Companies,” Peters said Southern California must devise effective strategies for dealing with pollution and congestion and for maintaining educational standards.

A combination of factors, including a large immigrant population, a growing force of entrepreneurs, a proliferation of small businesses, an available pool of capital and an educated work force have created an economic boom throughout Southern California, Peters said.

He said the region may overtake New York as the largest banking center in the United States.

The area’s growth has been “very much small-business driven,” he said. More than 90% of Southern California workers are found in companies with 50 or fewer employees.

Many of these businesses subcontract work from larger companies, which no longer insist on controlling every step of the production process. In the past, Peters said, some car companies even “owned the sheep that went into the wool of the seat covers.” Today, “everybody’s going to subcontract . . . to whoever can do it the best.”

The service industry is an under-appreciated force behind America’s economic growth, Peters said. “I think the service sector is the best thing the U.S. has going for it,” he said.

But economic growth should be tempered by quality-of-life concerns, he said. A decline in air quality, freeway conditions and educational standards could spur citizens and companies to relocate to more attractive parts of the country. Many businesses already have moved from California because of such concerns, he said.

Peters, 46, achieved sudden fame after publication of his 1982 book, which cited examples of well-run American companies. He wrote a follow-up book, “A Passion for Excellence: The Leadership Difference in 1985.” He runs a management consulting firm in Palo Alto.