The Center for Strategic Economic Research (CSER) developed the Prosperity Index to provide business and community leaders in the Sacramento Region a valuable tool to measure economic prosperity and track its performance against competitor regions in order to evaluate the competition, identify opportunities for improvement, and impact change in the Region.  Along with the national average, ten competitor regions were chosen as benchmarks based on feedback from regional economic development organizations regarding metropolitan areas that often compete with the Region for business location and expansion projects.  CSER will update the Prosperity Index annually - which measures indicators in the three areas of Business, People and Place. The Business component will be updated quarterly in order to allow for more frequent evaluations of the local business climate. The Sacramento Region ranked eighth among its main competitors on the 2009 Prosperity Index, posting a score of 8.4 out of a possible 10. Sacramento received respectable scores on the People and Place components, but a fairly weak score on the Business component, placing the Region toward the bottom of the list. The misalignment in performance across the three components continues to plague Sacramento which has never pulled into the top quartile in all the years the Prosperity Index has been produced, including those during the Region’s economic peak. Among the five measured competitor regions in California, Sacramento placed third, falling behind the SF Bay Area and the San Diego region, but ahead of the Stockton region and the Inland Empire (Riverside/San Bernardino). Overall, relative to its main competitors for business location and expansion projects, the Sacramento Region presents economic prosperity that is about average, giving it a decent competitive position.   The Sacramento Region jumped to sixth place on the fourth quarter 2009 BUSINESS component of the Prosperity Index, the highest ranking it has received over all 18 quarters this component has been measured. Sacramento received a score of 6.6 out of a possible 10, a significant improvement over its 5.4 score for the third quarter of 2009. In the previous quarter, the Region placed ninth and under the national average—with its move to sixth place, Sacramento overtook the national average in addition to the Portland and Denver regions. The Sacramento Region’s above average score demonstrates that, relative to its main competitors, it is beginning to present a decent competitive position in terms of business climate. While industry employment and labor market indicators show that the Region has been in poor economic health recently, it is important to note that the Business component of the Prosperity Index measures all indicators relative to the other areas—all the measured regions are experiencing weak economic conditions. For instance, the total payroll of establishments in the Region declined on an annual basis, but Sacramento received a very high score in this indicator because payroll shrunk at a slower rate than in all but one of the other measured regions. The Region also received healthy scores in the Establishment Growth and Job Growth indicators (measured through comparable first quarter data). The three indicators where the Region scored well all experienced increases since the last quarter. Sacramento posted weak scores on the other three indicators (all of which were lower than the third quarter 2009 scores), including Venture Capital Investment where it received the lowest score of all areas.