Foon Rhee

Foon Rhee: Is Next Economy the Sacramento region's salvation?

Published: Sunday, Dec. 9, 2012 - 12:00 am | Page 6E
Last Modified: Wednesday, May. 29, 2013 - 8:52 am

The economic rebound can't come soon enough for the Sacramento area, especially for those still looking for work. But how can we avoid, or at least soften, the next slump?

That's where the Next Economy initiative could be a game changer.

The goal is nothing less than to get the entire region behind a single job growth strategy – not only to accelerate this recovery, but to create a more stable and diversified economy for the long run.

We rely way too much on housing and government – a big reason for the boom-and-bust cycle here, and why we're recovering more slowly than the rest of the country.

If Next Economy works, it could lead to sustained prosperity for the 2.3 million people who live in the region. As of October, 112,500 were still unemployed in the six counties – El Dorado, Placer, Sacramento, Sutter, Yolo and Yuba.

After 16 months of mostly behind-the-scenes work, the business-led effort is nearing a make-or-break point.

With the new year, Next Economy's leaders will be urging elected boards, business associations and nonprofit groups across the region to sign up for a "playbook for action." A draft plan with specific actions, timetables and success measures is also coming out early next year, with implementation set to kick off Feb. 1.

The "Capital Region Prosperity Plan" calls for:

• Boosting innovation with easier transfers of university research to commercial use and wider access to investment cash.

• Expanding international trade and increasing foreign investment in local companies.

• Attracting and retaining talent in the general workforce and among young entrepreneurs.

• Improving the business climate by cutting unneeded regulations and promoting a region that often gets a bad rap.

• Diversifying the economy by focusing on a half-dozen key "clusters" – advanced manufacturing, agriculture/food, clean energy technology, education, information technology and health care/life sciences.

If all goes as planned, within five years the region is supposed to be widely regarded as a great place to invest and start a business, as well as a desirable place for young professionals to make their mark.

In one of a series conference calls this month to gin up support, Next Economy's leaders sounded a little like preachers fervently seeking converts.

"More than a plan, Next Economy is a movement," declared Meg Arnold, CEO of the Sacramento Area Regional Technology Alliance.

I'm not a disciple quite yet.

The plan looks good, and it makes sense to play off the region's strengths. It does have more credibility because it is not coming out of government and more traction because there has been such broad outreach already.

Still, you could fill a library with failed economic development plans. Many other regions are competing for the same jobs and entrepreneurs. In a global economy, it is exceedingly complicated to pick winners.

So since no else on the call was going to do it, I played devil's advocate: What if the plan is flawed? What if it focuses on the wrong economic sectors?

If everyone is pulling in the same direction – but it's not the right path – couldn't the outcome be worse than if cities and businesses were trying a range of different approaches?

Roger Niello, president and CEO of the Sacramento Metro Chamber, scoffed at such a possibility. With the amount of research and the number of meetings with business leaders, he said, he's confident that Next Economy is targeting the most promising areas for job growth.

Even if the plan is pitch-perfect, that's no guarantee of success, however.

Its fate also depends on leaders across the region buying in. And that requires a different mind-set – cooperating, not competing, with neighbors, even if that means a company locates elsewhere because it's a better fit.

That kind of collaboration hasn't always been the case. Just last year, Elk Grove dangled $5 million in taxpayer-funded incentives to lure the headquarters of California Correctional Health Care Services and 1,500 jobs from downtown Sacramento. In 2007, Sacramento and West Sacramento fought fiercely for a $520 million, 4,000-job headquarters for the state Resources Agency, though it was later scrubbed.

Elk Grove City Manager Laura Gill and Sacramento Assistant City Manager John Dangberg, who were also on the conference call, said they're on board. Gill said she's been following Next Economy closely and is waiting anxiously for the action plan. Dangberg said City Hall has purposely held back on releasing a five-year economic development plan to make sure it dovetails with Next Economy.

Will the same harmony happen with elected officials, whose political futures could take a hit if they don't land a big project?

Gary Davis, set to be sworn in Wednesday as Elk Grove's first elected mayor, says his top priority is fixing the imbalance between residents and jobs. It's as yet unclear how seamlessly Next Economy will mesh with Sacramento Mayor Kevin Johnson's green energy, "Farm to Fork" and other economic development initiatives.

It's going to take much more than simply passing a resolution of support for elected officials to prove they're truly committed to be part of the regional team. It will require making tough decisions on zoning and regulations, investing some money or even passing up on a project. We'll see soon if politicians are up to the challenge.

I admire the ambition and appreciate the good intentions of those leading Next Economy. At least they're trying to take control of our economic destiny.

I just hope, for all our sakes, they're right on the money.

MORE ONLINE

Review the studies and plans so far at:www.nexteconomycapitalregion.org

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Foon Rhee, Associate editor



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