Frank Parotore
Pablo King
Economics 309, Spring 2003
(Prof. Hackett)
The North Coast Strategy for the New
Economy otherwise known as Prosperity is an economic vision
that incorporates the natural beauty and climate of Humboldt County as well as
recognizing the small town feeling and eccentricity of the local people of
towns such as Arcata. This strategy is
an attempt to increase various forms of capital without diminishing the most
nonrenewable forms of capital. This
strategy includes making changes that can affect a local economy’s capacity to
create wealth for local residents. As
with any economic development strategy, there are always going to be strengths,
weaknesses, opportunities and threats, which this paper will address.
Besides the obvious strengths that
the Prosperity Strategy is providing, such as a higher quality of life, scenic
beauty, protecting natural resources, and increasing tourism revenue, there are
some strengths that may be more beneficial to the economy than others. Through base industry clusters, we help
ensure promising economic vitality for local businesses. This is a very efficient way to build a
strong economy. By creating these
clusters, businesses will be better able to find valuable resources and inputs
at a local level, while helping to attract new small owner-resident businesses
into the area. These clusters create
production complementarities while maximizing coordination of business
procedure and development efforts.
Raquel Seed is the Bilingual Outreach Coordinator for a non-profit
organization called Tu Casa, and when asked about the Prosperity Strategy she
replied, “Networking has never been easier.
Prosperity has opened the doors to other organizations and businesses in
the area that we would otherwise be unaware of.”
The more we can keep internal
processes of industry local, the higher amount of injection into the local
economy. For example if a local café
uses all locally produced food inputs, is a locally owned-resident business,
and has only local employees then the leakage rate is very minimal due to a
higher multiplier affect. Increasing
injection into the local economy and decreasing leakage’s are two of the most
effective ways to boost economic vitality and represent the heart of the
Prosperity Strategy.
Georgiana Matthews, a member of the Prosperity
Network representing the Arcata Economic Development Corporation says, “the
greatest weakness in the Prosperity Strategy report is keeping the community
informed about the Prosperity Network.”
One reason for the difficulty in community involvement is the lack of
unity between communities in Humboldt County.
Another reason is getting information back to the communities. A third difficulty in getting the community
involved is maintaining public involvement in the community.
The main weaknesses of the
Prosperity Strategy’s report are also seen through the nine basic industry
clusters – manufacturing, arts, & culture, information & technology,
dairy, agriculture, fisheries, education & research, tourism, and lumber
& wood products. One major weakness
in the various clusters is isolation.
In the education and research cluster, local professors do not have the
extensive local contacts and networks due to isolation. In the manufacturing cluster, isolation
makes Humboldt County a difficult place for manufacturing businesses to
operate, outside of the timber industry.
A second major weakness for the various clusters is cost. The arts and crafts culture’s biggest
challenge is finding inexpensive space to do business. Small-scale industries in the tourism
cluster struggle with high insurance costs.
The third major weakness of the Prosperity Strategy is increased
regulation.
There are countless opportunities
that can arise from the Prosperity Report.
Because of Humboldt County’s rural beauty, it is a prime location for
economic development despite increased regulation and isolation. When Tim McKay, representing the North Coast
Environmental Center, was asked about the significant opportunities of this
economic strategy he said, “The strategy allows for an identification of the
individual elements of the community that can be enhanced and intertwined where
industry clusters are concerned. These clusters are an alternative to focusing
on only the large industries such as timber.”
When asked about strategies that are comparable to the Prosperity
Strategy Tim McKay suggested the Sierra Business Council Wealth Index. This is a comparable strategy because of its
focus on natural capital as opposed to other industries.
Another opportunity is capitalizing
on the quality of life in this county.
Humboldt County is famous for its earth conscious community based
residents. By creating a strategy that
incorporates the environment and the natural capital it provides, it sets a
higher standard for neighboring counties to make the environment a higher
priority. The Prosperity Strategy has
also introduced sustainability as one of its goals. The Prosperity is an exciting opportunity to spread Humboldt
County’s love for the environment to other states and counties.
One of the biggest threats to
economic prosperity in Humboldt County is the possible collapse one out of the
nine base industry clusters. While it
is possible that any industry could suddenly collapse, it is far more likely
for some than others; chances are very slim that society at large is going to
stop consuming dairy anytime soon. The
one industry that could foreseeably collapse is the timber industry. Many of the workers in this industry have no
skills that are applicable outside of their industry, and an economy of this
size simply does not have the capacity to absorb large numbers of workers into
unskilled jobs. The only option to deal
with these displaced workers, without having them leave the area, is to retrain
them. Anecdotal evidence has suggested
that re-training workers from these industries would simply not be effective.
The timber industry currently
employs more people in Humboldt County than any of the other base industries,
and generates 75% of the county’s total manufacturing income. The timber industry has also previously seen
several rounds of mass layoffs when mills have closed. After these previous rounds of layoffs, some
of the displaced workers were able to find lower paying unskilled jobs, but
many were forced to leave the area. It
has been stated by members of the timber industry that the lawsuit being filed
by the county of Humboldt against Pacific Lumber could financially devastate
the industry and cause another round of mass layoffs. According to environmental activists, most of the logging in the
area is happening at an unsustainable rate, thus making the inference that the
timber industry will have effectively killed itself within 20 years. There are other extreme threats to the
timber industry, such as the exportation of raw logs, and the importing of
lower priced foreign timber.
This Economic Development Strategy
is a step forward for tomorrow’s economy.
Effective local management of economic development requires careful
targeting of the limited public funds, leveraging of private resources, and
cooperation of different groups in the local labor market area in order to be
successful.