Economist: Diversification drives long-term success
NAPA — The second annual Innovation Napa Valley summit, held at the former Copia theater and sponsored by the Napa Chamber of Commerce, served as a forum for exploring creative ways to improve Napa County’s economy in a region where 82 percent of businesses are directly or indirectly involved in wine, tourism and hospitality.
“Innovation as diversification” is one way to achieve long-term success, according to Robert Eyler, PhD, professor and Frank Howard Allen Research Scholar in the Department of Economics at Sonoma State University.
“Next year Napa will experience growth, while slowing a bit, with wine still serving as the driving force with tourism as a close second,” Dr. Eyler said.
He said there is forward momentum and a positive outlook for the North Bay through 2015. The outlook looks good for the real estate market and job growth next year, but the region needs another “tech innovation bump” to experience a real boom, he said.
“When the economy continues to grow for four or five years, expansion typically comes to a natural end, and the economy needs another reason to expand,” he said.
In California, he said Silicon Valley is driving most U.S. technology growth, but that the state’s recovery masks some structural problems — such as the possibility of a 10 percent to 15 percent stock-market equity cycle correction that could impact the pension system, plus increasing reliance on sales tax initiatives as the new funding source, according to Dr. Eyler.
“The question is, what will continue to grow jobs and fuel exports — the key driver of GDP — and how can Napa County build an asset base other than wine and hospitality?” he asked.
He cited the loss of manufacturing other than for wine and asked the 200 attendees to think about what other industries would be a fit for Napa.
Napa County has seen median housing prices rise by about $126,000 — a sign of a true recovery, Dr. Eyler noted — and 2,500 new jobs were created since August 2012. At the same time, gross domestic product grew about 3.2 percent in 2012–2013, or by $8.1 billion. However, he cautioned that the region still faces major challenges between 2013 and 2020.
“Our innovation advantage could be lost in this generation with less technology growth and more growth in the services sector,” Dr. Eyler said. “At the same time, the state is becoming less business friendly, and there are demographic shifts to a higher cost of living as well as education gaps. Students wonder where they will get jobs when they graduate. Both job growth and stability are needed for a true recovery.”
Napa Chamber of Commerce can help foster continued growth, according to Chief Executive Officer Chris Messina.
“I see the chamber as the dynamic catalyst to help improve the Napa environment while increasing value for chamber members and the community at large,” Mr. Messina told the audience.
He said the Napa Chamber has re-branded itself to stay current, and to focus on programs relevant for progress in 2014 and beyond, such as its 12 at 12 Leadership Luncheons, by focusing on big cluster businesses, a LinkedIn group, Coffee Cup Connection, Leads Over Lunch networking, as well as mixers and other events in the morning, afternoon and evening to accommodate member schedules.
Summit speakers focused on the economy, advancement and education in the region.
Michelle Spencer, principal of the New Technology High School in Napa, said the curriculum at this California Distinguished School and a Center of Excellence emphasizes project-based learning where students complete four-to-six week projects working in collaborative groups with teachers and business mentors and then present their results to the community. They also complete 50-hour internships with local firms.
Five “Ignite” student speakers presented their ideas for stimulating the Napa economy.
Kevin Bennett, founder of NapaIT, said innovation involves bringing businesses into the 21st century by going online. “Some 62 percent of California companies do not have a website, and yet 97 percent of web surfers are looking for nearby sources of goods and services. About 56 percent of Americans own a smart phone that they use to find local retailers.”
The Emerging Entrepreneurs Panel addressed innovative ways to refresh wine brands.
Panel members included moderator Andrew Lazorchak, managing partner of soireehome; Kristy Sammis, chief operating officer of Clever Girls Collective, Inc.; Ashley Teplin, of Teplin + Nuss Public Relations; Jordan Kivelstadt, founder and CEO of Free Flow Wines, and Adam Reiter, marketing and public relations manager of NakedWines.com.
They said wine brand evolution begins with having a clear vision, and by determining who you need to know to help you achieve it. Networking with influential people is vital, as is valuing your human capital, a willingness to embrace creative ideas (including telling emotional stories behind the wine, publicity stunts such as the longest wine toast, etc.) as well as building solid customer relationships and revenues.
Having a plan for growth and finding a niche focus — what you are best at and how you are different from the competition — are essential.
Moderator Lazorchak summed it up, “You have to trust yourself, lead — don’t follow — plant what grows and find what works. The process includes building a sustainable culture for Napa County’s future by diversifying the business mix and seeking opportunities for collaboration.”
Mary Frank, CEO and founder of Universal Green Marketing, LLC, talked about “The Balance Project” — an evolutionary way of doing business using a multimedia entertainment and marketing platform delivering messages that bring balance to health, business and the planet. It achieves this through a fusion of web, social media and original broadcast television programming and advertising.
“In an age of giving back, this is a more humane model,” Ms. Frank said. “It’s no longer about us versus them, but how by working together we can deliver sustainability messages and shine the media spotlight on business people who are turning us in a new direction and doing incredible things. The Balance Project focuses on challenges facing our food supply, how pesticides affect grapes, water and our children’s health as well as what is killing bees essential for pollination and other hot topics.”
Innovation involves adjusting consumption, according to Ms. Frank.
“We can’t keep consuming ourselves into success,” she told attendees. “After all, there will be no business done on a dead planet.”
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