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While economic development traditionally focuses on both large and small private companies, Oregon’s households, neighborhoods and communities (the community sector) present a tremendous, under-developed opportunity to spur Oregon’s recovery and to hedge against downturns in the business cycle. The community sector is an overlooked engine of economic activity that connects “economic development” to the real needs of individual Oregonians. The community sector consumes resources to produce Oregon’s social capital and workforce. Buying these resources -- energy, goods and services – strengthens the local economy and will make it more stable and robust throughout the business cycle.

For example, Oregonians spend $10 billion each year on energy and 85 percent of that -- $8.5 billion each year – leaves the state. That capital does not contribute to our economy; it does nothing to create jobs in Oregon; it does nothing to help solve our fiscal problems. To put this into perspective, $8.5 billion is more than Oregon spends each year on K-12, community colleges and higher education combined. Improving the efficiency of our community sector in energy (e.g. community scale weatherization), materials and other factors makes Oregon more sustainable and leaves money “at home” – money Oregonians can invest in other parts of our economy. The next Governor and the state can help strengthen our community sector in many ways, including:

• Energy Efficiency (described above in Section A on Immediate Opportunities)

• Feed-in tariff (FIT) for Community Renewable Energy Production These have radically increased domestic renewable energy production and propelled huge wind and solar industries in Germany, Spain, Denmark and Britain. Through the FIT, homeowners can install solar and wind generators on their property and sell the energy back to the grid at a premium price. A well-designed FIT encourages community buy-in and support, builds the local economy with green-jobs, and provides stable markets that encourage local investment. Oregon’s pilot program for feed-in tariff’s, enacted through House Bill 3039 (2009), will give us additional information to design a FIT that will work across Oregon.
  

• Oregon Entrepreneurial Spirit Oregon has a long history and deep reservoir of entrepreneurs who are anxious to start or grow their own businesses. It’s a much more productive economic development strategy to encourage home-grown businesses than to try to attract a business already established elsewhere to move to Oregon. The Governor and State need to do everything possible to encourage Oregon’s entrepreneurial spirit and to help small businesses grow. This includes continuing work to simplify compliance with government regulations, support small business development centers, and, especially in today’s economy, work on ways to increase access to capital through the SBA and private lenders (see above).