How Serious Economic Development is Done? 

The Sacramento Area Commerce and Trade Organization (SACTO) has been the historical economic development organization in Sacramento, but now local Sacramento CEO’s have decided to form their own economic development organization. An organization that is not tied to government money.

The SAC Bee has the details in the 24 June 2014 issue: 

A group of Sacramento business executives has raised $1.5 million to start a new economic development organization, with a mission that appears to resemble the efforts of a group that’s been promoting the region for nearly 40 years.

The fledgling Greater Sacramento Area Economic Council seeks to recruit new companies to the area and retain companies that already do business in the region, said Steve Oldham, the former SureWest Communications Inc. executive who is the group’s interim executive director.

The GSAEC has a starting budget of $1.5 million with goals of raising an annual budget of $3 million to $5 million.  The ERC Budget is less than $100 thousand. 

His group “can move this region forward much faster than it has been,” Oldham said. “We think we can significantly enhance what’s been going on.” The group has secured 15 commitments of $100,000 apiece, some for as many as five years, and wants to pull together an annual budget of $3 million to $5 million. The money has been pledged by corporations and educational groups, he said.

The GSAEC plans to focus the vast majority of its money and energy on recruitment and retention of companies to the Sacramento region.

According to the Nevada County ERC Business Plan and Economic Development Scorecard one of the ERC goals is to recruit one business a year to the County. 

Annually contribute to the attraction of at least one business to Nevada County that has the potential to bring 10 or more new jobs to the county.

I see several challenges for the NCERC. Their budget is under 100K, and the competition is shooting for a recruiting and retention budget of $3 to $5 million. The other challenge is that company CEOs are doing the recruiting of other CEOs. 

Oldham said he believes the newly formed organization can have a larger effect because it will have the direct involvement of area CEOs, who can sell the region to outsiders.

To my knowledge, direct recruiting by local CEOs is not the strategy in Nevada County, although recruited CEOs will be scheduled to meet with local CEOs at planned events. 

With more money and CEOs a recruiters, Sacramento has an edge over Nevada County.  That said, I have a question for both the ERC and GSAEC.  If a company is going to move, why could they stay in California, with high energy costs and business smothering regulations? If they are going to all that trouble to move, why not move some place that is more business friendly with lower infrastructure costs?  

About Russ Steele

Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.
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