City Of The Future

Its factories have moved to exurbia. As a financial center, it has fallen behind. But a burgeoning class of 'white-collar artisans' may soon make this the richest city in America

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THE PACIFIC-UNION CLUB IN SAN Francisco is located in one of the last brownstone mansions that once graced fashionable Nob Hill, a survivor of the great earthquake and fire of 1906. The club's bloodlines actually reach back to the frontier days of the 1850s, and even today there is about the club a distinctively San Francisco quality of Victorian excess. The marbled rotunda, ceiling frescoes, and carved wood paneling all bespeak the self-conscious affluence of the moguls of transportation, trade, and finance who still gather here for breakfast, lunch, or a quiet chat in the upstairs library. And although the members place a high value on privacy and exclusivity, they have managed to keep the reins of the city firmly in their grip.

Indeed, despite its reputation as a thriving tourist center and a capital of a youthful counterculture, San Francisco has been a city distinctly corporate in its outlook and personality. In addition to the scores of great national corporations that long ago made San Francisco their West Coast headquarters, there were the thriving homegrown giants: Bank of America, Wells Fargo, Crocker National Bank, Bechtel Group, Transamerica, Chevron, and Pacific Bell. The skyscrapers built by these companies defined the city's skyline, and for generations the companies' prospects defined the future of San Francisco's economy.

"In the old days, a few of the top guys could get together at The Pacific-Union Club and decide who the next mayor or what the next major project would be," recalls John Jacobs, executive director of the city's chamber of commerce. "Everyone, including the chamber, was very big-business oriented."

The Pacific-Union Club today remains a symbol of San Francisco's glorious past, but not its future. Consolidations, relocations, and layoffs -- more than 46,000 in the past decade -- have decimated the ranks of the city's major corporations. The city's great railroad company has been acquired. The Port of San Francisco, through whose piers and warehouses once passed most of the West Coast trade, now is lucky to handle 15% of it. And the city that proudly proclaimed itself the financial capital of the West has been displaced by its arriviste archrival, Los Angeles, whose banks now control twice the assets of those in San Francisco.

Judged by conventional wisdom, San Francisco should be an economic basket case, in the midst of a long and profound economic decline. In fact, the city is booming. Based on its growth in employment, its knack for generating new companies, and its ability to nurture start-ups in fast-growing companies, San Francisco ranks a respectable 35th on our 1987 list of metropolitan economies -- and one of the top-performing big cities. But perhaps more important, San Francisco is on the leading edge of a rapid and dramatic transformation taking place in many major U.S. cities -- a transformation from the corporate era to an era that is dominated by the entrepreneurial aspirations of a new class of white-collar artisans.

Janice Schooler is a native of Houston, the daughter of a meat packer, a computer specialist who studied mathematics at the University of Texas at Austin. Attracted by the city's "anything-goes attitude," she moved to San Francisco in 1973 to take a job as a systems analyst at the Bank of America, the city's biggest bank, dominant corporation, and largest private employer.

As Schooler moved up the ranks at "B of A," she rented an apartment in the middle-class Richmond area near Golden Gate Park. She studied dance, skied the High Sierra, and enjoyed the excitement of the city. In 1981, she heard about an opening at Levi Strauss & Co., the clothing company, and decided to apply for it because of an increase in salary and the prospect of foreign travel.

By the early 1980s, however, economic events prompted Schooler to reassess her attitude about having staked her career on the success of the city's big corporations. At the Bank of America -- which founder Amadeo Giannini had built to preeminence during the early 1900s on the strength of lending to small and midsize companies -- a single-minded emphasis on loans to Third World countries, agribusiness, and massive real estate projects was beginning to turn sour. And at Levi Strauss, intense competition for its traditional blue-jean franchise caused a companywide shake-up, and -- not insignificantly for Schooler -- a cutback in employee travel. Before long, both corporations had begun a period of retrenchment that to date has seen staff reductions of 17% at Bank of America and 31% at Levi Strauss. Schooler decided that this was not a trend she wanted to be a part of.

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