Growing Nevada County’s economic pie
July 21, 2014
At the Nevada County Economic Resource Council, our vision is clear: implement business development initiatives that result in Nevada County becoming recognized as one of the most economically competitive rural counties in the U.S. by 2019. Our goal: grow the county’s economic pie by focusing on supporting existing local businesses – or attracting businesses from outside of the area – that have products or services that are “scalable,” meaning they can be sold on a regional, statewide, national or global basis. The ERC refers to these businesses as “innovative growth companies.”
These businesses possess a much larger propensity than others to create higher paying jobs and wealth, while generating the much needed tax revenue necessary to support essential public services needed to maintain a healthy, livable, safe, and clean community. An underlying benefit is that these innovative growth companies often serve as springboard businesses that can foster new industry clusters. Locally, think of the video technology and video broadcast cluster that emerged and can be traced all the way back to the 1950s when Charles Litton sold Litton Industries and moved to Nevada County, followed by Dr. Donald Hare and the founding of Grass Valley Group.
Simply put, when innovate growth companies experience marketplace success, metaphorically, Nevada County’s “economic pie” grows. Importantly, not only does the size of the pie get bigger, but so do the individual slices. Some examples: employees who work for these companies receive higher wages; some have stock options that turn into wealth when the options are exercised at an increased value upon a successful liquidity event. Local suppliers and vendors to innovative growth companies have more (and often larger project) local contracting opportunities. The construction industry grows as executives and employees of the innovative growth companies buy and/or build new homes or renovate existing homes. Out of the area business executives visit Nevada County in attempts to do business with our local growth companies, stay in local hotels, eat at local restaurants, and shop at local stores, adding a boost to tourism. Finally, local nonprofits and other community organizations benefit by an increase in philanthropy resulting from employees’ having higher discretionary income. When all is said and done, what can result is a recurring virtuous cycle that has multiple benefits to many different stakeholder groups.
For those interested in the local economic health of Nevada County, it is vital to differentiate this small subset of businesses that sell products on a much larger geographic scale (generally only 5 percent of a typical business community) from the 95 percent that sell almost exclusively into the local economy. To illustrate, the success of one business selling solely into the local community often comes at the loss of another local business. Using the Economic Pie metaphor, the process of local, national and global businesses selling into the local economy either carves up the community’s Economic Pie into more slices, or redistributes the size of the individual slices. Unfortunately, it rarely grows the size of the pie! This “shifting” versus “growing” distinction is vital for local leaders, local media and the general public to understand if we are to achieve the ambitious vision introduced at the beginning of this column. In today’s dynamic, highly competitive, global economy, it’s imperative that Nevada County and its communities find ways to increase the Economic Pie by being better able to support Innovative Growth Companies. Remember – we are competing with every other rural, suburban and urban county in America and across the global for jobs and prosperity.
We have a great example of the positive benefits of the Economic Pie conversation here in Nevada County with the video engineering/video broadcast technology industry. I had the opportunity to meet a number of the executives in the industry as part of a luncheon that Dan Castles, CEO of Telestream, helped organize for the ERC last month. The long-standing, cutting edge video technology cluster that remains intact today in Nevada County represents one of only a handful of truly high technology industry clusters that exists in rural American today, and the only one focused on video technology. When you consider the proliferation of video as the key content medium for television, the web, and mobile – and that it is growing at an alarming rate globally — its easy to recognize that a top priority of the ERC and public economic development policymaking should be focused on supporting this high tech industry.
For context, the video technology cluster that exists in Nevada County remains as one of the top three or four video-related technology clusters in the nation, among Boston, Portland and Seattle. While there have been some difficult times, Nevada County’s video tech industry has survived and remains poised to thrive in coming decades.
Jon Gregory is Executive Director of the Nevada County Economic Resource Council and can be reached at email@example.com or by calling 274-8455