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  • Experts say that new-housing construction has been a cornerstone of the Sacramento region's economy over the years but that for continued growth, diversification is needed.

  • Randy Pench /

    Bee file, 2013. Bill Hollingshead, right, offers career advice to UC Davis senior Jack Mar at a career fair at Freeborn Hall.

Next Economy sets goals for Sacramento region

Published: Wednesday, Mar. 20, 2013 - 5:30 pm | Page 1A
Last Modified: Thursday, Mar. 27, 2014 - 12:08 am

Government and housing construction have served the Sacramento region well over the years, but a coalition of area leaders says the region needs to diversify into other industries to secure its economic future.

Next Economy, a business-led effort to foster economic growth in the greater Sacramento area, unveiled a growth plan Tuesday that it said could create 35,000 new jobs and $5.3 billion in economic output over the next five years.

Regional representatives of business, government, the health/bioscience industries and academia gathered at the UC Davis Comprehensive Cancer Center in Sacramento to outline the plan, crafted over the course of the past year.

Backers hailed the effort as a significant milestone for cooperation among regional government agencies and business groups that have not always pulled in the same direction.

"The task of bringing an entire region together to supercharge a $97 billion regional economy with a concentrated set of business growth strategies to grow jobs and new investment is no easy feat," said Brice Harris, chancellor of California Community Colleges.

Economists, however, were quick to point out that Sacramento is far from the only metropolitan area seeking to foster growth in such areas as clean energy, life sciences and manufacturing.

Christopher Thornberg, a founding partner of Beacon Economics, a consulting firm with offices in the Bay Area and Los Angeles, called Next Economy's goals "the same old pie in the sky" that will go "absolutely nowhere."

Backers acknowledged the task ahead is daunting, but said the job growth projections are realistic. They came from the Sacramento-based Center for Strategic Economic Research, the research arm of the Sacramento Area Commerce & Trade Organization, a business recruiting group.

The "Next Economy Action Plan" calls for government and the private sector to focus on investing in six core business "clusters" in the six-county region: advanced manufacturing, agriculture and food production, clean energy technology, education and knowledge creation, information and communications technology, and life sciences/health services.

The complex plan includes 14 objectives, 68 strategies and 292 actions, some with specific deadlines. And it involves cooperation among a diverse group of businesses and industries.

Officials expressed hope that a unified vision will foster job creation and fiscal growth.

"We will use jobs, dollars, diversifying our economic base and building a stronger foundation for long-term growth as the primary yardsticks for measuring results," said Scott Syphax, president & CEO of Nehemiah Corp. of America. Syphax belongs to a group of volunteers who will monitor the plan's progress.

"We need to instill an entrepreneurial spirit that attracts and retains innovators, researchers, educators, students and investors from all over the globe," Syphax said.

Sacramento City Manager John Shirey noted that numerous local governments already have committed to Next Economy's goals with "resounding adoption of resolutions of support."

While the goals were hailed by the diverse group of civic leaders in Sacramento on Tuesday, professional economists greeted the plan's unveiling with skepticism.

Thornberg, for instance, said Next Economy pushes businesses more suited to San Francisco, San Diego and Los Angeles.

"The thing about Sacramento is that it has some very viable competitive advantages," Thornberg said. "It's a state capital, and it's surrounded by some of the most productive ag land in the nation, if not the world. And it's relatively affordable.

Thornberg said one of Sacramento's strengths is luring industries looking for cost advantages "instead of the newest, glitziest toys that are available … The true job of economic development has to be pragmatic and close to the ground. And this is neither of these."

Sung Won Sohn, an economist at California State University's Channel Islands campus, also said Next Economy's goals, while ambitious, were similar to those of numerous metro areas throughout the West.

He said the goal of creating "clean-tech jobs sounds great, but the truth is that there are not that many jobs" in large-volume numbers in that industry.

Sohn suggested that Next Economy officials might want to concentrate on the Sacramento region's "comparative advantages … . What is it that we do well?"

Yet one outside group says Sacramento is already doing well in one area that it's trying to cultivate: clean technology. Next 10, the San Francisco nonprofit that promotes statewide growth of clean tech, released a report Tuesday saying that the number of green jobs in the Sacramento area grew by 10 percent in 2010, to 10,000 – the fastest growth rate in the state.

Still, Silicon Valley continues to attract far more venture capital for clean technology ventures – snagging $1.1 billion out of the $2.6 billion invested statewide in 2012.

Call The Bee's Mark Glover, (916) 321-1184.

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