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Affluent North County Not Immune to Economic Malaise

BY MARK LARSON

Efforts are in full swing in North San Diego County to help the area’s business community weather the storm of a national downturn, which looks like it could continue for months.

Michael Robinson, president and CEO of San Diego North Chamber of Commerce, says that when the effects of the slow economy started to take hold of businesses big and small in recent months, “There was almost a sense of powerlessness” among local businesses.

But now, he says, “That has subsided significantly.”

“Now businesses are very cautious, with everything done very deliberately,” says Robinson, who figures that should be done no matter what the economic climate. “The community is braced for whatever economic storm is thrown at them.”

With 900 members, his chamber is the third largest in the county and serves communities including 4S Ranch, Carmel Mountain Ranch, Miramar, Mira Mesa, Rancho Bernardo and Rancho Penasquitos. About 17 percent of the members represent large companies.

Robinson says the financial services sector, which is big in North San Diego County, has taken a hit along with the industry nationally.

Health services, another big sector in North County, has remained “relatively resilient” amid a dipping economy, says Robinson. But biotechnology and high-tech firms have also been hit, he says.

Buying Power

Retailers, so far, are “faring pretty well” in what is the most affluent area of the county. The number of sales transactions are down, but sales figures aren’t down as much.

“There’s a little bit more buying power in this part of the county,” says Robinson. “Historically, affluent areas are more resilient to economic slowdowns.”

With consumer purchasing down, he expects a lot of that will be felt more resonantly during the first and second quarters of next year.

“Right now,” says Robinson, “they understand lower consumer spending is probably going to force a slowdown in their production.”

The North County housing front has seen a big dip in median home prices. Discounted homes are pulling in multiple offers within 10 days of being listed, says Robinson. More first-time buyers are getting lower-priced homes, he says, and tax credits are available to them.

While the local labor force has been trimmed, there haven’t been any drastic cuts, says Robinson.

His strategy now is to put together programs with ongoing events and services that can help member businesses gather more information about their markets. One program for retailers will offer tips on how to detect credit card fraud as well as counterfeit bills. Another workshop will tell members how to attract more visitors to their Web sites through search-engine optimization techniques.

Emerging Technology

Gary Knight is president and CEO of the San Diego North Economic Development Council, a public/private partnership with more than 110 members.

Knight says his organization is focusing on three areas to help members: clean technology, high-tech and biotech manufacturers; education; and health care.

Recycling and clean fuels technology is an emerging sector in San Diego, says Knight. “So much of it is driven by legislation and policy,” he says. “We want to help coordinate local efforts so there’s no duplication.”

High-tech and biotech jobs are most coveted to feed the needs of local companies in the sector, says Knight, and attracting them is a priority.

And health care, one of the largest employers in the region, faces possible cuts to Medicare and Medi-Cal benefits in the next two years. Knight says he’ll head pro-benefits advocacy efforts with state and federal lawmakers that can affect such policies.

He also has education funding as a top political advocacy goal. Knight sees that as a route to creating a strong local work force, particularly when high school curricula offer courses that train students for careers affecting the local economy.

Meanwhile, he’s always interested in recruiting retailers to the area since they generate a strong tax base for the communities they’re in. Now, with the retail sector sagging, the search still continues.

“San Diego is one of the strongest retail areas in the country,” says Knight. “We’re always looking for more.”

Sudershan Shaunak is director of the Small Business Development Center in Oceanside. Set up to give small businesses coaching on how to run their operations more effectively, it is funded jointly by the federal Small Business Administration, the chancellor’s office of the California Community Colleges System and MiraCosta College.

Shaunak says the organization annually gives about 550 businesspeople specialized counseling in areas such as marketing, human resources and accounting. Another 1,000 attend business training workshops held each year. Most offerings come free of charge. “We help them understand what is happening in their business,” he says.

Now, says Shaunak, “Everybody’s hurting, particularly small businesses. Their revenue is not increasing and funding is very, very tight.”

The current emphasis is to help companies figure out how to survive for the next year or so.

“No doubt it’s going to be extremely tough,” Shaunak said. “Small businesses are not able to borrow, they have a lack of collateral. And people are not spending money.”

Still, the area with the biggest potential, he feels, is alternative energy ventures in biotech and telecommunications.

“Biotech is big in San Diego, and telecommunications technology is changing so rapidly,” says Shaunak. “There’s always room for a new Qualcomm.”

Mark Larson is a freelance writer for the Business Journal.

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