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From YubaNet.com Regional Introduction: The recent publication of the Seifel Report, Western Nevada County Economic Development Strategy, has generated a renewed, and most welcomed, discussion of our local economy. The report lists three goals for an improved economy. In brief they are:
Slide # 2 (page 7) shows the relative growth of self employment vs. wage based employment. It clearly shows that the growth of self employment (entrepreneurship) is out pacing the growth of wage employment. An interesting a by-product of the Nevada County Cluster Study performed by the Center for Economic Development, Chico, Ca. found that some 40% of jobs in Western Nevada County were held by self employed or sole proprietors. These are the home based businesses, professional service providers, individual construction workers, etc. These folks generally do not show up in the statistics on employment and incomes that are in most economic studies. Another study, sponsored by the Kellogg Foundation's Rural Economies Project, "The Mapping of Rural Entrepreneurship" found that California's small business ownership and its growth is mostly in the urban areas and the northern rural areas. There is less in the southern areas of the central valley and the Sierra. The Regional Economics Project of the California Economic Strategy Panel identified Rural Entrepreneurship as a key job generator. New small businesses have accounted for 20,000 firms since 1990. The 2007 Nevada County Economic Indicator Report noted the same trend in the County with some 2000 new entrepreneur jobs.
Slide #2 Self-employment is growing faster than wage and salary jobs And yet another study discovered that the small rural businesses were young in age, meaning it is a recent trend (Slide #3 below). The same study found that a characteristic of these firms was that they stayed local. Chart #2, above is from the Nevada County Economic & Social Indicator Review and shows that sole proprietor income is about 15% of the total County income and exceeds the same sector in Placer, Eldorado and Sierra Counties. Thus the most potential sources of new and better jobs are in the self-employment and new local business sectors. The policy implications are discussed below.
Slide #3 Rural California Full of Young Firms Western Nevada County's Economy and Tourism: Another suggestion in the Seifel Report is to consider shifting of economic development funds away from promoting tourism and towards business attraction. It is based on the lower wage jobs in most of the tourist industry. However the suggestion falls short for several reasons. While many of the jobs are of lower pay the amount of money spent in town is appreciable as noted in a recent excellent story in the local Prospector section of the Union. Second is the many cultural and entertainment amenities that are visitor supported. From restaurants to stage productions to a vibrant music scene the quality of life here is excellent. In fact our quality of life is its self an economic attractor. A few years ago the ERC did an informal survey of businesses that moved to Western Nevada County. The bottom line was that the owners wanted to live here. Diverting tourism attraction funding to business attraction should be carefully weighed. Many would consider the tourist economy the sector that also supports the very attractive quality of life that in-turn attracts business owners. It is often heard that Western Nevada County is a tourist dominated economy. That is not true. Chart #7(page 8) in the Indicator Report compares the top ten employment sectors in Nevada County to the same ones in Placer County and the State of California. Surprisingly Nevada County's employment profile is similar to Placer's (one of the most prosperous California counties) and California's (the sixth largest economy in the world). It strongly recommended that any discussion of new economic directions start with the excellent Indicator Report. Industry and Business Industry Targets: The business and industries identified in the report for targeting are consistent with other studies and appear to be the ones that will move Nevada County forward. Summary: Western Nevada County has a vibrant quality of life and, for a rural county, a strong economy. Adding an improved business-attraction program is not necessarily bad but it doesn't seem justified given that new jobs come from other sources. And these types of programs can be very expensive and clear goals and expected returns should be calculated before adding this program to the existing ones. And pursing them at the expense of the existing retention, expansion, and tourism programs should be approached carefully. This is not to say that an examination of the existing economic development structure(s) should not be taken. It is clear that that self-employment, entrepreneurs, and small businesses are potent sources of new jobs and prosperity. And they are right in our backyard. However, formal training and support programs for these entrepreneurs and small businesses. are not a formal part of current economic development goals. This type of training is available through SedCorp and the Small Business Development Center at Sierra College. Recommendations: - Expand and improve retention and expansion programs. - Fund and support a productive tourism promotion program. - Develop and support self-employment and entrepreneur training. - Develop a climate to facilitate and welcome new businesses. - Examine carefully the cost of an outreach business attraction program. - Review current economic development structure for cost effectiveness.
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