A tiny Thousand Oaks liberal arts college has hired away the entire economic forecasting team at University of California, Santa Barbara a school seven times the college’s enrollment size to launch its own economic forecasting program.

California Lutheran University and its new three-man forecast staff plan to compete head to head with the UCLA Anderson Forecast, the Los Angeles County Economic Development Corp. and several other organizations in tracking the economy of the nation’s second largest metropolitan area.

“We are definitely seeking to boost our visibility and reputation, both within the world of economic forecasting and in the local business community,” said Chuck Massey, dean of Cal Lutheran’s business school.

The new forecast team at Cal Lutheran, which joins the school June 1, will also be involved in a highly specialized master’s program in economic forecasting. The program will launch next semester and university executives hope it draw students from across the globe. The program will start with six master’s candidates and eventually expand to 15 or 20 students.

Both programs will be centered at the Thousand Oaks campus; the school also has satellite campuses in Oxnard and Woodland Hills.

Businesses, financial institutions and government agencies rely heavily on regional economic forecasts as they map out their strategies and budgets, never more so than during an economic downturn. They increasingly contract with university forecasting arms to craft more specific economic forecasts tailored to their needs, providing a lucrative revenue stream for cash-strapped university programs.

Cal Lutheran’s staffing raid represents a major blow to UCSB. The university, which has 21,000 full-time students, must now rebuild its economic forecasting program. A national search for a new director is about to begin. Vice chancellor for institutional advancement John Wienmann said he hopes to fill the position by September.

Wienmann said he was surprised when he found out about Cal Lutheran’s making off with his forecast staff. The Thousand Oaks school has full-time enrollment of about 3,000.

Bill Watkins, director of UCSB’s economic forecast program since 2000, told him in February that he was going to CLU and taking the other two team members with him forecast modeling expert Dan Hamilton and Kirk Lesh.

‘More opportunity’

Watkins, 58, said he had long been friends with Cal Lutheran’s Massey and had even done some Ventura County forecasting work for him. He said Cal Lutheran “seems to offer more of an opportunity for consulting and interacting with other faculty.”

Massey offered Watkins and his forecast colleagues positions on the Cal Lutheran faculty, something they were not likely to obtain at UCSB, where the forecast program is separate from academic departments.

Watkins said the desire to be closer to the L.A. marketplace played a secondary role in his decision.

The budget crisis plaguing the UC system was not a factor in the move, Watkins said.

Massey and Watkins said they expect Cal Lutheran will produce forecasts for the San Fernando Valley, Los Angeles and Ventura counties, and possibly the state.

Cal Lutheran will be competing directly with California State University Northridge, which puts out its own annual forecast for the San Fernando Valley each spring. But William Roberts, director of the Economic Research Center at CSUN, said he welcomes the competition and that the increased pressure might make government agencies more willing to provide San Fernando Valley-specific data.

Watkins said he expects to establish Cal Lutheran’s reputation through the accuracy of the forecasts. But if the track record over the past year of the UCSB forecast Watkins led is any guide, Watkins and his team at Cal Lutheran have a way to go.

Last June, its economic forecast for the nation was more bullish than most and missed the mark widely, projecting that the gross domestic product would increase about 3 percent quarterly and that unemployment would remain steady at 5 percent. GDP fell 6 percent in the two most recent quarters and unemployment climbed to 8.5 percent in March. The forecast also projected a modest 6.3 percent unemployment rate for 2009 in California; the actual March 2009 rate was nearly double that at 11.3 percent.

Partnership issues

Private universities such as Cal Lutheran have long teamed up with local businesses for economic forecasting and research, said Esmael Adibi, director of the Anderson Center for Economic Research at Chapman University in Orange.

Adibi said that with the exception of the UCLA Anderson Forecast the UC system has generally been more reluctant to pursue ties with the business community for economic forecasts. The focus of UC schools has been more on pure academic research.

Also, UC forecasters don’t benefit from revenue they generate through their presentations to business groups a frustration for some.

Mark Schniepp, Watkins’ predecessor at UC Santa Barbara, set up that school’s forecast program in 1983, but left in 2000 to launch the California Economic Forecast.

“You make all these exhaustive presentations to the business community and bring in all this revenue to the university,” Schniepp said. “But the way the UC salary structure is set up, your salary is capped and you don’t see any of that additional revenue that you brought in. It stifles any entrepreneurial spirit you might have.”