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North Bay Business Journal

Monday, February 13, 2012, 6:30 am

Q&A: SSU economist Dr. Robert Eyler

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    NORTH BAY — Dr. Robert Eyler is director and founder of the executive MBA program and the Center for Regional Economic Analysis at Sonoma State University, where he has taught economics and has served as the economics department chair. A Frank Howard Allen research fellow in economics, Dr. Eyler is frequently asked to offer his analysis to business groups in the North Bay. He helped found the Marin Economic Forum and currently serves as its interim CEO and chief economist.

    Q: What would you say were the defining economic trends for the North Bay in 2011?

    Dr. Robert Eyler

    Dr. Eyler: The North Bay saw a slow labor market recovery in 2011, as well as business growth. Both of these are signs of recovery.  However, housing prices remained stagnant, and the number of home sales that were either bank-owned or a short sale remained relatively high. The latter environment creates downward pressure on home prices. We have seen many efforts started or continued toward local entrepreneurial activities  across a variety of industries, and that trend needs to continue.

    Q: What are some of the primary differences you expect to see in the economies of Sonoma, Marin and Napa counties this year?

    Dr. Eyler:  I don’t expect a lot of change. I expect we will continue to see mild job growth, housing prices moving up slowly (as the distressed sales continue to become a smaller portion of the market), and business activity to continue to increase.  In Napa and Sonoma County, we may see a revitalization of the wine industry around both continued tourism but more stable prices in wine markets.  In Marin County, we are likely to see biotech become a growth industry as a cluster there is slowly forming.  Marin’s proximity to the greater Bay Area will also help generate both real estate demand and business demand in 2012.

    Q: What will be the common goals among small business owners in 2012?

    Dr. Eyler: For small businesses, the biggest challenge is the national and state economies continuing a recovery and pulling our regional economy behind it to provide demand for small businesses. Watching costs and planning for stable but slow growth should be common goals.

    Q: Which industries are expected to experience strong growth this year?

    Dr. Eyler: Biotech and medical technologies are likely to see some rise this year, as will internet software and apps firms.  The wine industry may also show strong growth in terms of year-on-year change in 2012 due to stablizing prices and inventories. 

    Q: Where do you expect to see job growth in 2012, and how do you expect unemployment figures to change in the North Bay?

    Dr. Eyler: I expect to see growth in professional services firms and the wine industry (though at a slower pace than professional services) in our region.  Professional services is a broad set of industries, and it is likely going to be in technology design, software, research where the North Bay sees the most growth. Construction will also likely grow, but from low levels due to the slow housing markets. Unemployment will continue to fall, but we are also likely to see a continued change in payroll labor force numbers due to both retirements and shifts from payroll to contract (1099) workers, which then drop off the official statistics at the county level.

    Q: Taking a longer view, what dynamics do you see as defining the North Bay economy in the next five years? What about 10 years?

    Dr. Eyler: In the next five years, the North Bay needs to be a place that continues to embrace both a high quality of life and an entrepreneurial spirit for small businesses to begin and thrive here. The latter point needs to be overt and a song sung by locally-elected officials, business leaders and residents alike. Businesses will not want to locate where they need to fight for six months against the electeds and electorate over moving a wall inside their own building. Shaped growth is the key: we need to define what assets we have in the North Bay and what firms fit those assets or complement and enhance that set of productive elements in the North Bay.  Napa has done this with their expansion of downtown Napa in terms of hospitality.

    In 10 years, a balanced approach of technology firms, smaller businesses that serve other businesses and residents, and shaped growth across all industries can make the North Bay a great complement to the Bay Area in terms of a live-work-play arena for small- and medium-sized businesses.  We will not be Silicon Valley II, and we need to get beyond that.  What we can be is a place where niche technologies are born and remain in terms of research, development, and headquarters, where entrepreneurism is constant.

    Q: How will economic development efforts like Building Economic Success Together (BEST), the Sonoma County Economic Development Board and the Marin Economic Forum factor in to the economic trajectory of the North Bay in 2012?

    Dr. Eyler: Economic development efforts should be the thought and execution leaders concerning a shaped-growth strategy as I discuss above. These organizations can and should be looked at for information, education, and advocacy for businesses to grow and thrive in the North Bay, where the new and expanding businesses recognize and complement the values and assets in place  This is no different than other areas of California or the U.S., just a bit different for North Bay residents to understand. We have a broad set of industries and politics here and they need to work together.  These organizations should help that cause.

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