Nevada plots tactics to attract, retain businesses

David Strow

Wednesday, Jan. 12, 2000 | 11:06 a.m.

The recruitment of new companies to Nevada has been the focus of the state's economic development efforts.

But the state cannot ignore the second step -- ensuring these companies stay in Nevada and grow by being responsive to their needs, a top economic development official said.

"One thing we're finding is that attraction is only the left arm," said Kay Scherer, director of marketing for the Nevada Commission on Economic Development. "Expansion and retention are what make us whole. We do not retain some of the companies we attract to the state.

"Businesses are attracted to where they see other businesses growing, where they get attention from the government."

Scherer spoke last week to a meeting of the Society of Marketing Professional Services. At the meeting, she discussed the direction the commission was taking as it overhauls the state's strategy for economic development going into the next decade.

This strategy, the first new plan in nine years, will be unveiled and implemented in several months. Scherer has played a key role in developing this plan, in the works since August, now under review by Gov. Kenny Guinn and Lt. Gov. Lorraine Hunt.

One key handicap Nevada must battle and overcome is the poor perception it has in the eyes of business people around the country, Scherer said.

"One of the business hurdles we face is, 'what is the first thing businesses think of when they think about Nevada?"' Scherer said. "They either never get to business, or it's way down the line. That link (between Nevada and business) is something they're not comfortable with yet.

"We know it's a business, but many people don't associate gaming with business."

To focus on the delivery of its economic development pitch, the commission will launch an 18-month advertising campaign in publications widely read in the business community, such as the San Jose Mercury-News, the Orange County Register, the Los Angeles Business Journal and Red Herring magazine.

Since so many of Nevada's companies have come from California in the past, Scherer said, it's important to focus most of the commission's efforts on that state. That's especially important today, given the current economic boom enjoyed by Golden State companies.

"I want to break down the notion that Nevada isn't a place where business belongs, so we'll be going to (publications) that business people read," Scherer said.

The central focus of this media campaign will be a new website being developed by the commission. The goal of the ad campaign will be to draw traffic to this site.

The idea behind being so web-focused isn't just to be trendy. By directing inquiries to the Internet, Scherer said the commission will be able to provide access to vast amount of material, data and information about Nevada to potential clients -- much more information than would be possible through any other format.

But marketing alone won't suffice, Scherer said. To attract and retain companies, she said, Nevada must be responsive to what these companies need to thrive in a 21st Century economy, beyond the historical attractions of low taxes and low costs.

One key area the state must work on is workforce development, Scherer said. To address that, the universities must remain responsive to the desires of business as it develops programs for its students, she said.

"There's a gap between what the universities believe they should be turning out ... and what employers feel they should be turning out," Scherer said. "That's an alignment we need to keep working on.

"That's not just happening in Nevada, that's happening everywhere."

Another place where universities can assist in economic development is through "technology transfer" -- the practice of taking new technologies developed in a university lab and basing new business ventures around them.

"We have organizations, such as the Desert Research Institute, that are not at capacity at taking technologies and commercializing them," Scherer said.

In trying to attract new jobs, Nevada must also be aware of the new needs of these companies, she said.

One element that's changing is infrastructure. Before, businesses looked at infrastructure requirements such as roads and water lines, Scherer said. Today, she said, a key infrastructure is a fiber optic line crossing through a state's main urban areas.

The state must also continue to try to increase the availability of capital if it hopes to help new companies grow, Scherer said. Particular sources of capital that have lagged in the state include "angel investors" and venture capital, sources of cash used by young, high-growth companies.

In the end, Nevada's goal should not simply be to attract "high-technology" companies, Scherer said, since what does and doesn't constitute a high-tech company is nearly impossible to define. Instead, Nevada should be focusing specifically on the kinds of jobs that will boost the state's average wage, which now stands at $14.12 an hour.

"The guiding factor needs to be looking for the best primary jobs that will diversify the economy of our state," Scherer said.