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