Capital, academic contributions needed to lure technology firms

Grace Leong

Wednesday, Aug. 25, 1999 | 11:37 a.m.

Growth industries

The Las Vegas economy is booming and led the nation in growth during much of the 1990s. But the growth is concentrated in the casino and real estate industries -- the city and the state of Nevada have not done well in attracting high technology companies. The American Electronics Association ranks Nevada 45th in the nation in the number of per-capita technology jobs.

Promoting university-industry research partnerships and creating one-stop shopping for venture capital will help Nevada attract high technology companies.

Those suggestions were offered Tuesday to some 120 participants at a Nevada Commission on Economic Development forum on science, engineering and technology. The event is part of the Governor's Conference on Economic Development.

Other suggestions included providing state funding to promote technology industries and to amend Nevada's constitution to allow for state participation in loans to fledgling hi-tech companies. Such an amendment was defeated by voters in 1992 and 1996, but promoters will try to gain approval again in November 2000.

"In the 20th Century, the emphasis was on mass unskilled workers and mass production. In the 21st Century, the hot commodity will be the ideas and knowledge that exist in the minds of hi-tech workers," said Richard Sim of the Irvine Group.

And there is hope for Nevada if a 5,000-acre beanfield that was once Irvine, Calif., can blossom into one of the Golden State's prime hi-tech communities, with more than 40 million square feet of properties, 500,000 employees and 170 institutions of higher learning, Sim said.

"We can apply what has been done in Irvine to Nevada," he said.

And to attract more hi-tech industries, the state should develop a more educated workforce by fostering greater collaboration between businesses and academia, he said.

To that end, several business people suggested raising the profile of science and technology programs at the Community College of Southern Nevada and UNLV to gain more partnerships with hi-tech companies, and strengthening Gov. Kenny Guinn's Millennium Scholarship program in technology areas.

"Any business located next to a major research university will be at an advantage because they can cull skilled academic talent for their workforce," said Robert Heard, president of Edge Development Capital.

Several business people at the forum suggested that in order to retain Nevada graduates in the state's workforce, the state should improve job/employee matching efforts and link incubators or fledgling start-ups with the established private sector.

Heard also suggested more academic research and efforts to develop a hi-tech entrepreneurial class. He said this group will create the next generation of high-quality jobs in Nevada.

"In the past, entrepreneurs had time to test ideas. Today, an entrepreneur with a world class idea has to be prepared for it to explode overnight and also be prepared to build a company overnight," he said.

While venture capital is sometimes necessary for such enterprises to take off, it is difficult for some Nevada businesses to obtain because Nevada is one of the few states without a program to fund risky business startups.

"There's an urgent need to expand, develop, stimulate traditional capital funding resources, including bank loans, credit guarantees, bonds, venture capital pools and investment funds to fill financing gaps in the state's business sector," said Bob Schriver, executive director of the state Commission on Economic Development.

"Venture capitalists are catalysts for economic development. They are essential for sustainable technological efforts," said Robb Smith, executive vice president of Millenium Three Venture Group, a venture capital firm established in June seeking investment opportunities in Reno, Carson City, Las Vegas, Sacramento and Phoenix.

"The conundrum now facing businesses is 'how to get funding to drive technological development and how to get the technology that is worthy of funding?"'

He said first-stage funding or pre-seed capital financing is currently provided by Sierra Angels, a venture capital group based in Reno, but there is a shortage of growth-stage venture capital, a void Millenium Three hopes to fill.

"We believe Nevada's dynamic business community is severely under-served in this area," said Smith. "As a private equity fund, Millenium Three will provide much-needed capital to Nevada businesses seeking to grow quickly and compete with out-of-state rivals who have access to professionally managed capital themselves."