Editors Note: This is the first of a new monthly column by Jon Gregory that will appear the second Monday of every month in the Money Monday section.
I am pleased to be at the helm of the Nevada County Economic Resources Council. In my first three months on the job, I’ve had the opportunity to work with the board of directors to develop a new vision for the ERC and share it with business owners, tech executives, local government officials, nonprofit organization leaders, the media and the general populace. The response to the ERC’s new vision/business plan has been most positive; there is a realization that growing the economy, creating (and retaining) quality jobs and growing the standard of living is imperative for the long-term sustainability of Nevada County.
Let’s take a step back. For the past five-plus years, almost every region, including Nevada County, has faced, or is facing, economic distress. It is experienced firsthand as sustained job loss; underemployment; local, state and federal udget deficits; frequently distressed housing markets; devalued real estate; dwindling pension funds; manufacturing and tech business failures; and reductions in funding for public services or support of important nonprofit, education and other community organizations. Clearly, economic distress has impacted us or our neighbors, friends or family. The recent news of the merging of Grass Valley Group and Miranda Technologies and resulting layoffs serves as a very real reminder that efforts to revitalize the economy require a heightened sense of urgency.
It’s clear to me that here in Nevada County, technology, business, civic and government leaders care passionately about what is going on in the economy and very much want to make a difference. Yet, despite the importance of this issue and all of the associated rhetoric, there needs to be more practical conversation about the process of how a local economy actually grows. We must reframe the conversation to ensure that Nevada County can not only compete, but thrive, in today’s regional, statewide, national and even global context.
History reveals Nevada County has experienced uncommon economic success across multiple eras and industries dating back more than 150 years. So, what’s holding us back today?
Finding a solution requires a basic procedure that is commonplace in business. This includes clarifying the most compelling opportunities for Nevada County to succeed in the broader economic context we are competing in, adopting practical strategies to capitalize on the identified opportunity and implementing a series of measurable tactics to achieve stated goals.
During my nearly 30 years in economic development, I have heard repeatedly from successful business owners that in order to achieve business success, it is critical to clarify a value proposition, focus where the business can have the most impact and execute a repeatable process that yields tangible metrics to track performance. So why not use this tried and true approach to grow our local economy?
Just as a business looks for opportunity in the marketplace, so must Nevada County and its communities. For a business, it’s often referred to as product positioning. For a county or city, it’s called economic development.
So, we must define our product: economic development. What is it? I like the following: An orchestrated intervention into the economy designed to make a positive impact. This intervention can be public, private, nonprofit or some combination of the three sectors working together.
It is true there are numerous economic development tactics or programs that a community or county can deploy. Unfortunately, in my experience, most tactics and programs implemented in cities and counties across the country are really “community development” functions with little, if any, prospect for actually growing the economy. Public economic development discourse frequently overcomplicates the topic, or gets caught up in minutea — while missing the big picture!
It’s imperative that those who care about and/or who are charged with the role of economic development recognize the following reality. There are only six strategies for growing a local economy. All of the debate in the world doesn’t change this very basic fact. Missteps in clarifying and moving forward with a strategic direction by those charged with economic development usually result in unfulfilled expectations. The strategies are identified below. I’ll save commentary about the pros and cons of each strategy for a future column. I’ve learned these from the old-fashioned school of hard knocks and spending time in the trenches with CEOs, private investors, small business owners and government officials for much of my career in many places across California and the U.S. You likely won’t find these in text books!
The first strategy involves efforts to increase the size of the population through in-migration. This can result in new spending by the residents who have moved to the area in the form of housing, durable and perishable goods and a variety of services that accommodate the growing population.
A second strategy involves increasing the number of short-term visitors and/or temporary residents. The outcome is spending by visitors, which are often tourists, on entertainment, food and lodging, retail stores and a variety of visitor-related services.
The third strategy is to bring businesses into a community, either through an expansion of a business or its outright relocation into the area. This can lead to new spending on land, facilities and equipment and often brings new employees, residents and their associated spending, as well.
A fourth strategy involves a state or federal government making a large-scale public investment into a community. This might include a new university, federal lab, prison, railroad, dam or national park. This strategy can result in spending for new facility construction and often brings new employees and residents and their associated spending.
A fifth strategy involves efforts to get local residents and businesses in a community to make a conscious decision to “buy local” and change their spending patterns so that more of their purchases are from local businesses.
The sixth and final strategy is aimed at helping local businesses (or a group of businesses within a specific industry sector) with innovative, differentiated products or services to sell outside of the community into national and even global markets. With this strategy, new income flows into the community from outside the area. Since national and global markets in many cases represent multi-billion dollar industries, local businesses and industries that are successful can be huge economic “difference makers” to a rural local economy.
Within each of the these strategies are innumerable “tactics” that can be tailored as action steps, depending on a community or county’s resources, the degree of private sector engagement, political will, attributes to capitalize on or impediments that block opportunity, among other things.
In next month’s column, I’ll explain the strategic direction the ERC board of directors has chosen, and why we believe it represents the clearest path for achieving a vision of making Nevada County one of the most economically competitive rural counties in the U.S. within five years.
In the meantime, I am most interested in hearing your ideas on the best way to grow our local economy!
Contributed by Jon Gregory, executive director, Nevada County Economic Resource Council. Contact him via email at email@example.com