The reason no non-competes has helped CA is increasing startup formation. California has shown over the last 30-50 years that startup formation > attracting legacy businesses for growth. Unless that changes, California becoming less differentiated for startup formation but getting more legacy businesses is a bad trade for California.
One of the biggest issues I have with economists theory of comparative advantage is it ignores the self sustaining ecosystem aspects of economics.
Some places if you need someone to do specialized thing X you can just walk down the street. Most places you'll need to find someone willing to move and and take a big hit on his career options. So that deep bench of skilled labor and business resources is a big deal.
