Economic Resource Council

Gil Mathew Joins ERC

Gil Mathew has joined the ERC as President and CEO. Gil was the founder and President of Benchmark Thermal, a Grass Valley export manufacturer, designing and manufacturing industrial heating elements and applications for a variety of industries from aircraft galleys to semiconductor tools. Benchmark grew from 2 employees to 60 employees over its 23 years under Gil’s direction. He sold the business with the caveat that it must remain in Grass Valley for a minimum of 7 years.

 

Latest findings on Consumer Behavior

Russ Steele

Annenberg School for Communication has been surveying Internet users and have published their lastest findings in  2008 Digital Future Project – Year Seven Report. They have published a summary of key findings on more than 100 major issues here.

The 2008 Digital Future Project found the following about Consumer Behavior:

Who Is Buying Online? -- The number of online purchasers has increased to the highest level in the history of the Digital Future Project, increasing 16 percent since 2006.
Purchasing On The Internet: Spending Per Month -- Sixty percent of Internet users age 18 and older bought online and spent under $100 a month, a large increase over 2006.
How Often Do Online Purchasers Buy Online? -- The average number of annual online purchases for those age 18 and above increased to its peak thus far in the Digital Future Project -- now more than 36 purchases per year.

How Does Buying Online Affect Traditional Retail Purchasing? -- A large percentage of online purchasers reported that their Web purchases have reduced their buying of similar items in retail stores. After a small decline in 2006, the percentage who said that Web purchasing reduced their local retail purchasing somewhat or a lot grew to 67 percent of online purchasers, up from 65 percent in 2006.

Browsing For Products: Retail Stores Vs. The Internet -- Large percentages of respondents report using both the Internet and retail stores for browsing and purchasing. Seventy-one percent of Internet purchasers said they sometimes or often browse in traditional retail locations and then buy online. Even higher percentages of respondents said they use the Internet as a merchandise browsing tool before buying in stores.

Privacy: Concerns When Buying Online -- Privacy and security online have been found to be major concerns in each of the seven Digital Future studies. Almost all respondents have reported concerns about the privacy of their personal information when or if they buy on the Internet. The percentage of all respondents who reported the highest level of concern increased in 2007, and overall concern was the highest since the first year of the Digital Future Project.

Privacy: Comparing Concerns Among Non-Purchasers Vs. Purchasers -- Although the percentage of all users who report the highest level of concern continues to be quite large, comparing Internet purchasers to non-purchasers shows that online buyers report much lower levels of concern.

Credit Card Information: Are Concerns Stabilizing? -- Concerns about credit card security when or if buying online continue to remain high among respondents in the Digital Future Project.
Although the percentage of those with the highest level of concern about credit card information increased slightly to 57 percent, the overall levels of concern have stabilized over the four most current years of the study -- and at a much lower level than when this issue was first tracked in 2001.

As the ERC struggles to develop an economic development strategy, they need to understand these changes in consumer behavior.  More people are going on line to chose what to buy and where they will buy products of interest. You can down load the full summary of the report here.

Home Construction Slows to 27-Year Low

Russ Steele

In a study done by Chico State Professor for the Nevada County Contractors Association in 2006, Construction contributed 17 percent to the local economy. The home construction industry has been severely curtailed in Nevada County and according to a recent report by the Commerce Department this week that new homes and apartments construction in 2007 was down 24.8 percent from 2006. I saw on KCRA last night that Nevada County's housing market was down only 15 percent while some of the valley counties it as down about 26 percent.  A declining market means fewer home starts.

Money News writes: For December, construction fell by a bigger-than-expected 14.2 percent. The drop in construction in December was bigger than economists had been expecting and reflected weakness in all parts of the country. Housing construction fell by 30.8 percent in the Midwest and was down 25.8 percent in the Northeast and 19.6 percent in the West. The decline in the South was a smaller 3.3 percent.

Many economists believe the housing sector will remain weak through 2008 before starting a rebound in 2009.

The important thing to remember as Nevada County crafts an economic recovery strategy, it that the Construction industry made up 17% of our local economy. That is a big chunk and it will take a while to recover, with not much chance it will get better real soon. When one of the SDA projects are approve over the next five years, it is unlikely that the construction will be done by local contractors, but by large out of town firm, just like the hospital expansion was and the Sierra College Expansion is now.

Data Bank Resources

Russ Steele

The Sierra Environmental Studies Foundation has a Data Bank where they post relevant reports on current issues being discussed by the public, or being evaluated by governments in Nevada County. Here are two examples:

Looking Beyond the Horizon: Investment Planning for the 21st Century - State of California Debt Affordability Report,  October 2007. Discussion of the the State’s debt and fiscal policy, has long term impact on local economic development planning.

Business Location Decisions and Employment Dynamics in California, 2007 by Public Policy Institute of California. Chapter Five covers intrastate relocations important to Nevada County economic development strategy.

UCLA Economic Forecast

Chuck Neeley

UCLA publishes an economic forecast periodically throughout the year.  The most recent one from September 12, 2007, is entitled "U.S. Economy A "Near Recession" Experience.  It paints the picture that California will fortunately avoid recession in the near term.  That is good news!  Here in Nevada County the picture is yet a little brighter, with predictions that the housing market may turn around and become positive again in the next 12-18 months.  As we close out 2007, there appears to be light at the end of the tunnel!  We will continue to track the economy closely.  Here is the UCLA Forecast:

http://uclaforecast.com/contents/archive/media_9_07_1.asp

Nevada County Snapshot

Chuck Neeley

The California Employment Development Department (EDD) publishes County Snapshots each year.  They are available for 43 counties and six  Metropolitan Areas (representing 15 counties) and reflect Benchmark 2006 annual average data.  The Snapshot for Nevada County is at the following link:

http://www.calmis.ca.gov/file/cosnaps/nevadsnap.pdf

Legislation - Career Technical Education

Chuck Neeley

I am a strong proponent of Career Technical Education (CTE) classes in our high schools.  In the last half century we have lost our ability to prepare the way for talented students, that are not college bound, to enter the trades.  The concept to bring back a mandatory program for high schoolers now seems to be gaining traction in California.  Following is a recent article on the legislation under consideration:

Senate Votes to Include a Career Technical Education in High School Graduation Requirements

On Thursday, June 7th, the California State Senate approved Senate Bill 672 (Torlakson) to add career and technical education to our state's high school graduation requirements in 2014.  This measure passed with a strong bipartisan vote of 33-2.  This bill is co-sponsored by the California Industrial and Technology Education Association (CITEA) and other members of the Get REAL coalition in Sacramento. SB 672 will finally ensure that CTE coursework is given equal footing with all other college-prep mandates so that students will actually have an opportunity to take these important classes. 

While this bill is controversial to some in the education community, including the Chair of Senate Education Committee Jack Scott (D-Pasadena), this bill is absolutely essential to re-establish balance in high school curriculum.  The criticism by Chairman Scott is that there are already too many mandates on our high schools and this bill is yet another requirement on an over-burdened system.  However, this is exactly the point.  The education system delivers only those courses that are mandated or required.  As such, curriculum like CTE that is not required or mandated doesn't get taught.  California's CTE system has been dismantled during the past twenty years because these courses are "electives" competing with an ever expanding list of high school graduation and college admission course "requirements." 

Bottom-line, in California education policy, we value what we require, what we fund, and what we measure.  This past Thursday, more than 80% of our State Senators agreed with Senators Tom Torlakson (D-Contra Costa) and Mark Wyland (R-Escondido) that it is time for California to move beyond rhetorical support and act upon a measure to place real "value" on CTE.

 

New Air Service - Sacramento Int'l Airport

Chuck Neeley

Beginning tomorrow, June 15, 2007, Air Canada will begin non-stop service between Sacramento and Vancouver, British Columbia. The carrier will fly two daily round-trip flights, which are timed to connect with flights from Vancouver to Air Canada's destinations in Asia, London, and the rest of Canada. This service is invaluable to the Sacramento Region as Air Canada is the second foreign carrier to offer flights from the Sacramento International Airport.

Value of Older Workforce

Chuck Neeley

If you are 55 or older, did you know that you are emerging as a "hot commodity?"  Older workers are doing a lot more these days.  They're becoming integral parts of the workforce at health care, telecommunications, financial services, and other companies.  That's because smart executives looking to the future understand that there is a labor shortage on the way in this country.  Nationally, in five years, nearly 20 percent of the total U.S. workforce will be age 55 or older, compared to only 13 percent in 2000, according to forecasts by AARP.  Please see accompanying article:  Older Workforce

Biomass

Chuck Neeley

I am reminded continually that an opportunity exists in Nevada County that has not taken hold, as of yet.  That opportunity is the conversion of biomass materials from our forests into usable energy.  The input of this process is the forest undergrowth which should be removed for fire protection purposes, and the output is electricity.  From an economic development standpoint it makes perfect sense.  Please see below an excerpted article discussing a biomass plan to be developed in Weed, CA.
----------------
Roseburg revives biomass plant plans

Published: Wednesday, March 21, 2007  6:11 PM CDT

Citing the public support and encouragement it received, Roseburg Forest Products announced Friday that it will proceed with a project to construct a biomass power plant at their Weed veneer manufacturing facility.

The new power facility will produce renewable energy from wood waste, according to Roseburg's California operations manager Steve Henson.

In February Roseburg announced it was withdrawing its application for the wood waste-fueled steam-driven project, citing the potential of time delays for going through the CEQA process and possible court appeals.

In last week's press release, Henson stated that Roseburg has committed to a California Environmental Quality Analysis review process for the project.

"We will work closely with the county to do a comprehensive analysis of the environmental issues from the project, including those identified by the community in earlier meetings," he said.

The company will install a steam turbine to generate electricity at its existing boiler, according to the press release.

"We carefully evaluated the merits of proceeding with this project, both for our company and our community," Henson stated.

He said, "The support and encouragement we received concerning this project was humbling.  My phone range off the hook, we received numerous e-mails and letters from people asking us to reconsider our withdrawal of our earlier application."

The press release also noted the many citizens who signed a recent Siskiyou Daily News advertisement in support of the project.

"It was important to our owner, Allyn Ford, to know that we had the support of the community for the project," Henson said in the release.

"We believe the project will provide a number of benefits, including economic stability to our Weed operations and 'green' power for northern California," he stated.

The company has also restructured its management team to guide the project through to completion, with Henson taking on the role of project manager, in addition to his responsibilities for other California operations for Roseburg.

Roseburg Forest Products Company, based in Roseburg, Oregon, is a family owned manufacturer of lumber, composite panels, softwood plywood, engineered wood products, and specialty panels.  It has land and facilities in the northwest and southeast U.S.  The company was established in 1936 by the Ford family.

For more information visit:  www.roseburg.com

Immigration

Chuck Neeley

The talk in the news today about immigration, and its impact upon the U.S. or California economies, was of no concern to Nevada County, so I thought, until I watched the presentation at the following link:

http://video.google.com/videoplay?docid=4094926727128068265&pr=goog-sl 

It is about 14 minutes in length and is chocked full of illustrative data that clearly demonstrates that all U.S. citizens will be affected.  I would encourage you to take time to review this presentation.

 

Balanced Community Shapes Positive Future

Chuck Neeley

Jeff Ackerman in his column today in The Union accurately portrayed the ERC's role in shaping the future of Nevada County.  He said "We need a strong economy fueled by well-paying jobs that will keep younger families here.  The Economic Resource Council has been working diligently to recruit and retain high-tech and "exporter" companies that can provide the kind of wages needed to keep pace with housing costs.  But they need our help."  AMEN!  This is a great summary of what the ERC is all about.  The "exporter" companies he mentioned are those companies that sell products or services outside of Nevada County -- in economic development terms the types of jobs created by these "export" employers are called "primary" jobs.  The wages paid for these types of jobs are generally higher than for the service sector.  Younger families can actually live in Nevada County when they work for an export employer.  You can help the ERC if you have family or friends that work in influential positions in high tech firms outside of Nevada County -- convince them to move their operation to this county.  Balance is ours if we all work together to shape our future.

California Tourism Budget

Chuck Neeley

The Sacramento Business Journal reported in its January 26th edition that the California tourism marketing budget was rising to $50 million over the next couple of years from $18.2 million last year!  This is a huge increase, especially in terms of historical standards.  The real question that I would pose is how can Nevada County get in on the action?  I would welcome your comments.

Commuting

Chuck Neeley

The Union published an article today on commuting that has many ramifications to economic development.  You may wish to review the article at the following Web site: http://www.theunion.com/article/20070104/NEWS/101040135

One of the issues of commuting out of the County that I am concerned about is the fleeting tax dollar.  People who commute out of the County spend $$$ in other Counties.  Understandable, but still concerning.  People who commute into Nevada County, on the other hand, spend $$$ in this County.  That is good, in terms of tax revenues.  Since over 11,200 people commute out, and only 4,500 commute in; however, Nevada County tax revenue generation is upside down.

You may ask why this is a concern.  Economic development is predicated on sound infrastructure (i.e., roads, utilities, telecommunications, etc.).  Infrastructure is terribly expensive.  And we have some tremendous needs!  Every tax dollar that goes to other Counties is lost to Nevada County.  The real question to be answered is what can we do about this?  We need to start with an introspective analysis of why people commute out of Nevada County.  The Union article gives some pretty good clues...  People commute out because of better opportunities.  Why can't we offer more good opportunities in Nevada County?

I would solicit your ideas...

Business Survey - South County

Chuck Neeley

A few months ago I completed a survey of businesses in the South County.  I personally sat down with 60 business owners and went through a multi-page questionnaire.  The owners I surveyed came from across the spectrum of the business community, from retail to industrial.  My purpose was to try to find out what types of employment & training issues, as well as economic issues, they were facing.  Part of the questionnaire was a community assessment, where they provided their opinions on how a multitude of things were going in the greater community.  It produced a wealth of information which I am in the process of compiling.  Of interest to all is the major strengths and weaknesses as perceived by these business leaders.  Here is what they said, by order of magnitude:
MAJOR STRENGTHS
1)  Small community
2)  Customer loyalty
3)  Location/access
4)  Quality of Life
5)  Growth
MAJOR WEAKNESSES
1)  Location/access
2)  Low population/lack of growth
3)  Lack of shopping/restaurants
4)  Finding good employees
5)  High cost of living
The results speak for themselves.

Job Fair - Results

Chuck Neeley

The 2nd Annual Job Fair was considered a huge success by nearly everyone.  There were over 550 job seekers that came out to survey the 60 employers present at the Nevada County Fairgrounds.  We couldn't have asked for a better day.  A few facts about the 550 job seekers:
- About 90% were from Nevada County; the majority of others were from Placer County
- About 2/3 were between 25-54 years of age; the remainder (under 25 and 55+) were roughly equal
- Females outnumbered males by about 15%
- High School vs. college grads were about 50/50
- About half were currently employed
- About 2/3 were looking for full-time work
We will be polling to see the actual hiring results.  From all indications the employers actually filled some of their requirements.

We will be co-hosting the 3rd Annual Job Fair next Fall -- date to be determined.  If this year is any indication, if you are an employer, you will want to sign up early.  We actually had to turn employers away this year!  If you are a job seeker, I hope you are employed before the 3rd Annual Job Fair!!!

LectraMedia Business Seminar

Chuck Neeley

LectraMedia puts on a one day seminar each year, and brings in an upscale speaker to address the business community.  This year, Mr. Mac McIntosh will speak on "How to Gain an Unfair Advantage in the Race for Leads and Sales."  This seminar will be on October 24th, from 10:00 a.m. to 3:00 p.m., at the Miners Foundry Cultural Center at 325 Spring Street in Nevada City.  Lunch is included.  Price is $89 per person, or only $50 if you are in Investor/Partner in the ERC.  Call (530)478-8300 for your reservation.  If the topic is relevant to your business, you will not want to miss this event!

The next new thing

Russ Steele

I am reading Thomas Friedman's The World is Flat, A Brief History of the Twenty-First Century.  He makes the point over and over again, in his detailed look at globalization, that American businesses need to be developing the “next new thing”, rather than competing at the commodity level with China and India and their cheaper labor. Reading through Chapter Nine, This is Not a Test, I was reminded of the companies I visited on The Tour of Nevada County, and how many of the business we visited have already invented the “next new thing”, or are applying the “next new thing” in their businesses.

nVison is the leader in developing high definition television routers and switchers, starting a full ten years ahead of the market.  They are global leaders in creating the “next new thing” in high definition television.

Autometrics has developed automated machines which are replacing humans on the cutting room floor in multiple business. They are replacing human labor with tireless machines, that are faster and more accurate than humans. They have created the “next new thing” for clothing manufactures and the designer and manufactures of carbon fiber products.  Many of these products are just over the horizon for many user, like the Boeing 787 Dreamliner and lower cost wedding gowns.

Nevada County Tech Center is creating spaces where engineers and inventors can create and perfect the “next new thing.”  The developers are installing fiber optics communication technology that will provide Tech Center customers unprecedented connectivity to potential global partners and customers.

LectraMedia is using digital technology to produce highly relevant direct mail, with minimum handling by human operators.   This reduces marketing costs and improves return on investment for LectraMedia customers. Personalization and customization allows LectaMedia to produce on demand products, from one copy to millions of copies, reducing the need for customers to warehouse printed products. They are using the latest new thing in digital color copying machines to provide these services.

Peaceful Valley Farm and Home Supply is using the latest data base and customer tracking technology to increase efficiency. By entering customer data only once it reduces errors, insures timely collections, and speeds product delivery.  They are using the “next new thing,” integrated customer management software and the Internet to create a higher level of customer satisfaction.

Zap Manufacturing is a leader in recycling aluminum signs. While that are not inventing the next new thing, they are using a low energy, environmentally friendly approach to recycling, reducing their impact on the environment. An approach that  companies in India and China can adopt once they decide to curtail their growing air and water pollution.  While not producing the “next new thing,” Zap is using an earth friendly process which is the “next new thing” for all manufactures. 

Loma Rica Organic Farm is an integral part to a new sustainable walking friendly community, which developers vision as the “next new thing” for Nevada County and California.

As the Grass Valley City Council reviews the Special Development Areas, they should consider that local businesses will have to compete in Friedman’s flat world, where connectivity  and innovation are essential to the production of the “next new thing.?  We have a history of innovation and creativity in Nevada County. The SDA’s should enhance a work environment that promotes the creation of multiple “next new thing[s]” over the next 20 years, our economic survival in a flat world is at stake.

Afternoon Tour

Russ Steele

The afternoon program started with a great box lunch from the Grapevine, accompanied by music from the Ragged Right. Phil Carvel gave a talk on sustainable development and promoted the consumption of locally grown organic produce.

Click photos for a larger image

Bus 4's next stop after lunch was Lectramedia, a printing and mailing company, off Gold Flat Rd in Nevada City. We learned how the printing industry is changing, moving to just in time production.

While multimillion dollar digital printers have replaced the old web presses, new technology is not always the answer.

A low tech solution to individual book binding, a refurbushed Singer.

Our second stop in the afternoon was Peaceful Valley Farm & Garden Supply, where we learned about the benefits of organic gardening. 

Peaceful Valley has been in busienss for 30 years, and started selling over the Internet in 1997. So far this year they have recieved about 500,000 unique visitors to their site. Over half of all shipped pacakges, 25,000 a year, are sold over the Internet last year. They ship around the world using FedEx.

At the end of a very successful Tour of Nevada County, the 140 participants enjoyed a little wine tasting, while they recapped the day and waited for the TV raffel results. This was the first of an annual event, which will improve over time. Highly recommended for next year.

Morning Tour

Russ Steele

Here are some photos from the morning portion of the Tour of Nevada County. I will have more later with more detailed captions:

Loading the buses, I was on the lead bus #4.  These we far more comfortable buses that I was expecting. I was expecting a Duram Yellow School bus. Thanks ERC for the comfortable busses.

Bus #4 at NVision, learning about HDTV routing and switching. This is a care where insight lead the market by ten years, but now they are reaping the rewards for being insightful and dedicated to their future market.

Demonstration at Autometrics of automated cutting machines. I found it interesting that they use the automate cutting machines to make the machines. These robot like machines are replacing manual laborer, doing the work faster, more precise and much safer.  There are home grown inventions, that are changing how work is done in multiple industries.  Most aircraft are being build from composits. These machines cut those composit materials.

Zap's signs on display, all from recycled materials.  They recycle 250,000 lbs of aluminum signs every year for government agencies.   This is one of those why did I not think of this business.  Simple, green and profitable. Wow!

I left out the Nevada City Tech Center, I was so interested in the discussion with Preston Dickinson, the AT&T rep, about the need for fiber optics and more broadband, I forgot to take a picture.
But, Susie Richards came to my rescue with these three pictures:

The first bus getting a briefing on the Tech Center, or in line for the cookies and bottled water. Maybe both.

Lock Richards (Sperry Van Ness-Highland Commercial), Robert Upton (NCTC owner/developer). Lock tells me they are planning to bring fiber optics communications to the Empire building and all future buildings.

 

The NCTC Team:
Tim Brady (Tru-line Construction), Lock Richards (Sperry Van Ness-Highland Commercial), Judy Hess (Citizens Bank), Robert Upton (NCTC owner/developer), Brent Daggett (NCTC Architect).

I am very impressed by the level of questions that are being asked, detailed and insightful by all the folks on Bus #4.   This is turning out to be a great tour.

Early arrivers seeking coffee and rolls

Russ Steele

Early coffee on the Tour

Getting ready for the Tour of Nevada County

Russ Steele

The Tour of Nevada County is an opportunity for local government leaders, business entrepreneurs and citizens to learn about local business, from high tech to agriculture.  To provide some insight to those who could not attend, we are going to be taking pictures and posting comments on the ERC Blog, starting in the morning of the 28th, with a noon time update and end of tour recap. Please log in during the day and get a glimpse of some of Nevada County’s leading business. 

This morning, Chuck Neeley was packing bags with information and gifts for those taking the tour.

Click for larger image

2nd Annual Job Fair

Do you know anyone that is looking for a new job?  Perhaps a relative, friend, or neighbor???  On October 10th at the Nevada County Fairgrounds we are co-hosting the 2nd Annual Job Fair.  This year there will be over 60 employers looking to fill many, many positions.  The Job Fair will run from 10:00 a.m. to 2:00 p.m. on that date.  There will be three resume writing workshops offered by WorkForce Connection prior to the Job Fair.  The dates for those one hour sessions will be on September 27th at 10:30 a.m., October 2nd at 2:00 p.m., and October 4th at 10:30 a.m.  If you are interested in one of these sessions, call WorkForce Connection at 265-3204.  The Job Fair is a once a year event, and it promises to fill the needs of many job seekers that attend.  Entrance is free to the general public.

Tour of Nevada County

The first annual Tour of Nevada County is scheduled for next Thursday, September 28th.  It promises to be an incredible eye-opening day beginning at 8:30 a.m., and continuing on through 4:30 p.m.  We will learn a great deal about the economic engine that is behind our economy on that date.  Participants will enjoy a light continental breakfast, a full lunch, and wine tasting at day's end.  All for the low, low cost of $35.  Be sure to sign up as soon as possible.  Call my office for a reservation, at 274-8455.