Sierra Nevada
Wealth Index
Understanding
and Tracking our Region's Wealth
The Sierra Business Council
(SBC) developed the Sierra Nevada Wealth Index to help business leaders
and policy makers understand the assets that sustain our region. The Index
describes the social, natural and financial capital, which are the foundation
of the Sierra Nevada’s economy and thereby provides an integrated understanding
of our region’s wealth.
A growing number of decision
makers nationwide recognize the need to develop new, more inclusive measures
of wealth. The Sierra Nevada Wealth Index is just such a measure. By
examining the Sierra Nevada’s social and natural capital, in addition to our
financial capital, the Index gives private and public investors a more complete
and useful picture of current conditions and trends in our region.
Why do we need a more complete
picture of our assets? Quite simply because the Sierra Nevada’s economic well-being
depends on more than just financial capital. In the last decade, rapid improvements
in communications and transportation, and the explosive growth of knowledge-based
industries, have transformed the fundamental relationship between customer,
product, producer, and place in our economy. The Internet, Federal Express,
UPS, and fax machines have freed many businesses from the need to locate adjacent
to suppliers and customers, giving business owners greater flexibility when
selecting locations for their operations. And today’s business owners are taking
full advantage of their new found flexibility. Every year hundreds of individuals
move their businesses, their financial resources, and their families to the
Sierra Nevada to enjoy our superb quality of life. At the same time, local business
owners who once might have been forced to leave the region to expand their operations
are finding it possible to grow their businesses from within the Sierra.
Sierra Nevada’s exceptionally
high natural and social capital are the magnets that hold and attract financial
capital to our region. Our outstanding environmental quality, attractive towns,
and good schools are no longer simply nice amenities; they are essential elements
for business retention and investment. In today’s economy, talented people do
not move to, or stay in, communities where their children cannot receive an
excellent education or where their air is contaminated with toxic chemicals.
In fact, the opposite is true. Business owners and skilled workers move to the
communities with the most outstanding schools, the best health care, the most
vibrant artistic culture, the lowest levels of crime and poverty, and the very
highest environmental quality.
The Sierra Nevada’s natural
capital also plays another, even more fundamental role in our region’s economy:
It is the life support system that makes our very existence as a society possible.
Healthy natural systems provide, free of charge, a variety of ecosystem services
essential to life in this region and worldwide, services such as air purification,
soil formation, nitrogen fixation, water filtration and storage, biological
pest control, and plant pollination, to name just a few. Researchers recently
estimated that the global value of these ecosystem services is at least $33
trillion a year, close to the gross world product.1 For most of these services,
however, there is no known substitute at any price.
The Sierra Nevada Wealth
Index helps decision makers in the Sierra Nevada keep focused on these
important realities. It reminds us of the need to track all of the factors essential
to maintaining and enhancing our wealth. It reminds us of the need to develop
and implement integrated investment strategies to build the social, natural,
and financial capital of our communities. Finally, it reminds us that our region’s
prosperity depends directly on our willingness to make wise use of our assets
and to act swiftly to prevent their diminishment.
The 2005-2006 edition of the
Sierra Nevada Wealth Index is a more concise, web-based update of the
1999-2000 edition. This edition includes a number of new indicators, as well
as data additions to some previously published indicators. We welcome your comments.
1 Costanza, R.; d’Arge, R.;
deGroot, R. et. al. The value of the world’s ecosystem services and natural
capital. Nature. 387:253-260
