Comdex helps lure a few businesses to Nevada

Monday, Nov. 30, 1998 | 11:27 a.m.

Economic development experts from the Nevada Development Authority and the City of Las Vegas were on the recruitment trail at this month's giant Comdex computer show, attempting to entice growing companies to set up shop in Nevada.

Comdex is one of a handful of conventions at which the NDA sets up a booth to distribute literature on the merits of building in the Silver State. While the booth was accessible and the exposure was good, the real value of the show was having a credential to get to the corporate decision-makers.

The local economic development specialists spent much of their time walking the trade show floor in search of leads for new companies.

"It's a passive marketing system, but it's extremely cost-effective," said Mike Majewski, who heads the City of Las Vegas' Office of Business Development. "It's like a spider throwing up a spider web and seeing what sticks to it."

Not only is staff time the only investment the business developers must make, but teams from the NDA, the city, the county and the cities of North Las Vegas and Henderson pool resources.

"Once we've established a contact, we send out just one packet explaining all our resources," Majewski said. "We know the area and each location's strengths. For example, if a company needs a rail line, we'd probably defer to the other cities that have railheads. It's not that we don't want the business."

Comdex is an economical opportunity to establish hundreds of contacts. In Charles Van Geel's first day at the show, the NDA vice president of client services made 20 contacts. By the end of the week, the NDA team had made close to 400.

The cost is minimal: The Las Vegas Convention and Visitors Authority allows the NDA and other economic development groups to set up at no charge. LVCVA officials even help set up the booth. All the NDA has to do is staff it and keep it supplied with collateral materials like brochures.

"But what many people don't understand is that it's a process that takes several years," Van Geel said. "Companies aren't ready to pick up and move tomorrow. We start out by explaining what we have to offer, then follow up to see if we can answer any questions."

Karen Marshall, another NDA vice president who also split her time between making contacts and staffing the booth, said NDA also will be on hand for the Winter Consumer Electronics Show in January and the Men's Apparel Guild in California fashion trade shows. Earlier this month, the non-profit agency was represented at the Specialty Equipment Marketing Association, a show for after-market car accessories.

Comdex and CES are opportunities to mingle with representatives of high-tech companies. The SEMA show affords the agency the chance to work with car companies that could be interested in learning more about the Las Vegas Motor Speedway and its adjacent industrial park. MAGIC, a fashion show that appears twice a year, has a large customer base tuned in to Hollywood and motion picture peripheral businesses are on the NDA's target list as it works with the new non-profit Entertainment Development Corp.

"The most rewarding thing is the follow-up," Marshall said. "We initiated contact with a German company and explained what we were doing. The next time we met, they sought us out."

The NDA touts Southern Nevada's low-tax environment, low energy costs, telecommunications infrastructure, central location among western states and strong economy.

The NDA also promotes the local telecommunications infrastructure, McCarran International Airport's ranking as one of the 10 best in the nation and a flexible cost-effective work force available for shift work.

High-tech companies looking to expand place a high priority on proximity to quality high-technology education programs -- something Nevada isn't known for.

While UNLV and the Community College of Southern Nevada are growing institutions with new programs geared toward high technology and medical research, they're no match for Stanford University, the University of California and San Jose State University -- which feed graduates to Silicon Valley companies.

So local higher education programs aren't touted much by the NDA as it tries to lure businesses to the Las Vegas area -- though education is key to successful high-tech recruitment campaigns.

"Companies look for an educated work force, not far from the major schools," said David Stewart, who heads the Department of Marketing at the University of Southern California and serves on the board of directors of the American Marketing Association.

The AMA attended Comdex and offered training sessions for high-tech companies on sales, marketing and image.

Southern Nevada is at a disadvantage against the nation's high-tech power centers because they've been doing it longer than everyone else.

"Silicon Valley has been around for 30 years," Stewart said. "The Research Triangle (North Carolina) began in the '60s and Austin (Texas) started up in the '70s."

Doug Lein, senior development officer for the city's Office of Business Development, said committees are working toward developing a medical campus on property at the Las Vegas Technology Center donated by the city to the University of Nevada.

"We are never going to be a Stanford," Lein said. "But what we can do is show what the state has to offer in its programs. We're working heavily with UNLV and the Community College (of Southern Nevada) to bring them up a notch so that companies will give us a good look."

Lein said there's a renewed sense of optimism because a new state administration is taking over.

Lt. Gov.-elect Lorraine Hunt has advocated economic diversification efforts. But whether she and Gov.-elect Kenny Guinn can be any more effective at lobbying for extra diversification dollars from the Nevada Legislature is unknown. Critics have said the state government hasn't backed its diversification efforts with the kind of money it needs to lure companies away from their established homes.

Much of the money has been spent on advertising campaigns, especially in California, and on economic development trips that can get politically unpopular.

Something else high-tech companies look for when the consider relocation is a community of similar businesses, Stewart said. Luring a cluster of businesses is challenging, he said, because not only must businesses be convinced that a move is in their best interests, but their suppliers must be convinced as well.

That's one of the reasons Comdex was a good place to make pitches: not only are the companies in attendance, but many of their suppliers as well.

Comdex has been good to the NDA and the city in the past.

Marshall said at least two of the companies contacted in previous Comdex shows have relocated to Southern Nevada. A recent example: Dusan Equipment Corp., which relocated to Henderson in 1996.

Dusan, which operates from the Black Mountain Business Park, has 17 employees and manufactures automated molding equipment for the semiconductor industry. The equipment the company makes places molding on semiconductor chips.

The company, which moved from Gilroy, Calif., is led by president Dusan Slepcevic.

Majewski said a Comdex contact several years ago led to the arrival of QVS Inc., a computer peripheral supplier.

"When we first met them, they were based in Detroit," Majewski said. "They were looking for a West Coast location and moved their corporate headquarters here."

QVS distributes about 1,500 different computer products, from cables, connectors and accessories to adaptors and switchboxes.

Frank Tsou, president of QVS, said some of his employees liked what they saw when they attended Comdex shows in the late 1980s. After the initial contact, a city representative visited with Tsou and persuaded him to make Las Vegas the center of its West Coast distribution network.

Last year, the city made contact with Source One Technology, which integrates computer networking and telephone systems. The company, which has offices in Fresno, Calif., and Mexico City decided to build an office in Las Vegas.

Also during Comdex, the Nevada International Trade Office, in coordination with the California Office of Export Development, hosted a reception for foreign delegates who attended the show. An estimated 41,000 people from 131 countries were among the 220,000 Comdex delegates, show organizers said. The state expected a turnout of more than 1,500 to the reception.

"This is our potential for getting the word to all the people about how great Nevada is for business," said Gayle Anderson of Nevada's Office of Economic Development, which works closely with the NDA and the city. "We know that many visitors get locked into seeing what happens on the Strip, but they don't hear about everything else we have to offer."

Marshall concurred. "They know all about the Strip," she said. "But when we sit down and talk with them, they have a lot of questions about our infrastructure and about all the beautiful new homes we have. They're impressed with the affordability."

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