Economic blueprint effort moves into high gear

Business leaders have taken a key step toward launching a plan to diversify Sacramento’s economy. Organizers of the initiative, known as Next Economy, are in the final stages of drafting a blueprint for expansion as the region recovers from a punishing recession. Participants are identifying roadblocks and opportunities for economic growth.

“You build strength through diversification, and not putting all your eggs in one basket,” said Barbara Hayes, president and CEO of the Sacramento Area Commerce & Trade Organization, which is active in the effort. Next Economy has released an executive summary of the plan and is now developing a strategy to execute it and measure results, said project manager Christine Ault.

About 1,100 business and civic leaders have been invited to participate in a series of teleconference briefings that start next week, and representatives of city and county governments in the region will be asked to endorse the plan. A public launch of the implementation phase is scheduled for Jan. 31.

“We’re anxious to move out of planning and into implementation,” Ault said.

Back to the drawing board

The recession clobbered the Sacramento region’s main industries — construction and government — so hard that business leaders realized in 2011 that they had to rethink the region’s economy. About 145,000 jobs have disappeared here since 2007.

Over the last year the Next Economy initiative has targeted six broad “cluster” industries that are likely candidates for expansion:

• Advanced manufacturing
• Agriculture and food
• Clean energy technology
• Education and knowledge creation
• Information and communication technology
• Life sciences and health services

Within each cluster are industries that show particular promise.  Take agriculture, for example. Food can’t be grown without seeds, and that is a niche that is flourishing in the capital region. University of California Davis, as a top agriculture school, has a strong seed-research program, and that is helping attract seed businesses.

About 100 seed and seed-related companies are within a three-hour drive of Sacramento, said Francois Korn, a founder of Seed Central, a year-old nonprofit dedicated to making the region a seed-research hub.

“Seed is the base of the food chain,” he said. “If the seed industry grows in the region, other segments of the food and ag industry will grow and benefit … Automatically, you reinforce other industries.”

Rethinking health care

The same sort of thing is possible in health care, which is the region’s fastest-growing industry. But health care as most people think of it — providing services to patients — is not going to expand as much under federal health care reform and the California Health Benefit Exchange, which are both likely to emphasize preventative care, according to the cluster analysis.

“That’s an important realization,” said Ann Madden Rice, CEO of UC Davis Health System and a member of the Next Economy steering committee. “It reframes …health care going forward in Sacramento.

Instead, the Next Economy effort sees a focus on health care technology transfer and innovation, such as commercializing UC Davis research into the areas of plant, animal and human science. A goal of the next economy project is to find ways to match up these areas of promise with access to capital.

“We’re appreciative that the Next Economy is helping elevate that discussion,” Rice said.  Next Economy sees universities and their research as key to growth. Just as Stanford was crucial to the development of Silicon Valley, UC Davis and California State University Sacramento will figure heavily in the capital’s next economy.

Other goals are to find ways to expand capital to businesses of all sizes, to build a network of business incubators and accelerators, expand international trade and exports, increase foreign investment, find ways to attract and keep talented employees, fill gaps in workforce training, remove economic and regulatory barriers and build the region’s reputation and visibility among key audiences.

Four key agencies —Sacramento Metro Chamber, SACTO, Valley Vision and the Sacramento Area Regional Technology Alliance — will create a formal governance structure to oversee the implementation and monitoring, said Roger Niello, president and CEO of the Metro Chamber.

The chamber already is incorporating some strategies from the Next Economy blueprint, such as forming a coalition of business support groups, into its 2013 business plan.  SARTA’s CEO says the Next Economy project helps strengthen existing economic development efforts.

“It’s fair to say there are pieces of all these things being done,” said SARTA CEO Meg Arnold.  “But we have the opportunity and obligation to do better and to amplify,” she said. “The power of the Next Economy is unifying and stitching some of these things together so we have a more comprehensive impact.”

Sanford Nax covers real estate, planning, development, construction and economic issues for the Sacramento Business Journal.

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