Las Vegas Sun

March 28, 2024

Business leaders embrace economic diversification plan

Southern Nevada business leaders embraced a new economic diversification plan -- dubbed "Unlocking Nevada's Future" -- unveiled by state officials this morning.

The Commission on Economic Development explained details of its multifaceted plan, which includes strategies to draft a proposal to attract high-technology companies to the state, link those high-tech companies with venture capitalists, to hire a global trade and investment director and to support a ballot question that would allow the state to boost business.

In addition, state officials unveiled a new website -- www.expand2nevada.com -- designed to attract new businesses to the Silver State.

Economic development officials explained the marketing program to legislators, educators, economic development officials and local business leaders. A duplicate program was scheduled in Northern Nevada later today.

"This is an acknowledgment that policy leaders must play a role in laying the groundwork to make Nevada an attractive place for this (economic diversification) to occur," said Bob Shriver, executive director of the Commission on Economic Development. "Once you have that in place, a lot of positive things can happen."

In unveiling the initiative, Lt. Gov. Lorraine Hunt said the plan wasn't designed to replace similar departmental or local Nevada efforts.

"We see this as an instructive overview," she said. "However, this is an action-oriented plan that we promise won't just sit and gather dust. We believe the plan provides (state officials) with the ability to move quickly and adapt to the needs of business."

She said the plan is not designed to attract retail or construction firms -- "they'll come here anyways" -- but rather companies that can produce goods or services to be sold outside of Nevada.

As part of the state's commitment to quickly respond to changing business needs, Hunt said the plan would be reviewed on a quarterly basis.

Keith Schwer, director of the Center for Business and Economic Research at UNLV, welcomed the initiative as a good first step on the road to economic diversification.

"This is clearly a good foundation for that (diversification) and a recognition of the needs of the new economy," he said. "The signs are clear as to the need for diversifying Nevada's economy.

"Twenty-five years ago, we were the only state to have legal casino gambling. Today, you can find it almost everywhere."

Still, Schwer cautioned the state's new initiative was only the first step in a long journey towards a diversified economy.

"This is an important part of the puzzle, but all the points have to come together if this is to really work," he said.

The initiative was the newest effort to prop up diversification for a state dominated by the gaming industry. Experts say Nevada must diversify its economy to protect it from the turmoil that would result from a slowdown in tourism.

The Commission on Economic Development is an agency working for diversification statewide. On a local basis, the Nevada Development Authority has similar goals for Clark County.

"The NDA has been at this for three years," said Somer Hollingsworth, president and chief executive officer of the Las Vegas-based organization. "We've been preaching this for a long time, so we welcome the commission's efforts."

The NDA's focus has been on attracting companies involved with medical technology, communications, research and development for motor sports and automotive sectors, high technology and the motion picture industry.

The NDA has teamed with the nonprofit Entertainment Development Corporation of Las Vegas to recruit Hollywood production and post-production companies to the area. But most recently, it's been the high-tech field that has grabbed headlines.

"The dot-coms and e-commerce has really caught fire," Hollingsworth said.

An NDA representative is scheduled to meet today with nine technology companies based in Southern California to sell Nevada as a new home.

Under the new plan, out-of-state marketing efforts will be aimed primarily at regions that have historically shown a strong interest in relocating businesses to Nevada.

The main targets of state marketing efforts will include California, western Canada, Illinois and Texas.

There are several other pieces to the state's bid to diversify the economy.

"It's a patchwork quilt of ideas that have been brought together," said Thomas Gutherie, president and chief executive officer of the Southern Nevada Certified Development Co., a key link between high-tech companies and a means to finance them.

Gutherie has proposed a plan to bring venture capitalists together with emerging high-tech companies. He said it's no coincidence that three states with the most success in breeding technology companies -- California, Texas and Massachusetts -- are also the ones that have the most venture capital companies operating within them.

Gutherie said there are no venture capital companies operating in Nevada, so it will be important to introduce them to the state.

But in order to do that, the state must modify its state Constitution to allow the state to create programs to assist small businesses. Ballot Question 1, which will appear on the November ballot, would give the state government permission to establish those programs if it's passed. Similar ballot questions have failed twice in the past 12 years.

The passage of Question 1 is another priority outlined in today's meeting.

Approval on Question 1 would allow the state to invest in local businesses. In 1996, the most recent time a similar proposal was rejected, 65 percent of the voters turned it down.

The Constitution prohibits the state from investing money in any company, association or corporation except those formed for educational or charitable purposes. The proposal would permit investments in private firms to assist in economic development and the creation of new jobs. Nevada is one of six states that don't allow such investments, putting the state behind other competitors that do.

Gutherie noted that not only is Nevada competing with 49 other states in attracting high-tech businesses, but also against locations worldwide in the Internet economy.

He said he believes people voted against the issue in 1996 because they didn't understand it.

"Unlocking Nevada's Future" also addresses the need to link venture capital with start-up Nevada-based companies.

"Our Small Business Innovative Research program, along with the Venture Capital Network, will assist small businesses with access to much-needed capital," said Shriver.

The SBIR will help Nevada companies tap into available federal government assistance programs. Shriver said the state Legislature will be asked to approve $100,000 to aid companies with their venture capital networking efforts.

Economic development experts also explained a plan to recruit more high-tech companies to the state, and introduced the state's new global trade and investment director.

Last week, the agency announced that Battelle Memorial Institute, an Ohio-based policy think tank organization, was hired to develop the strategy to boost Nevada's high-technology industry.

Shriver said Battelle will coordinate a plan under the direction of a 40-member advisory group headed by Hunt. The Columbus-based organization, which has its high-tech division in Cleveland, already has developed strategic plans for Kentucky, Michigan and Oklahoma.

Shriver said the advisory group, comprised of government leaders, engineering and science educators and representatives of private companies, will first complete an inventory of high-tech companies operating in Nevada, then develop a strategy for recruiting more.

Today also was the day Shriver publicly introduced Alan DiStefano, the state's new trade director. DiStefano has been in international business development for 26 years, and has been in the medical equipment field in Reno for the last 16 years.

"Globalism is an important part of diversifying our economy," said Shriver.

"DiStefano not only will be in charge of expanding trade relations overseas on behalf of Nevada businesses but will also attempt to get grant money to support international trade and teach business people how to get government contracts," he said.

Nevada has consistently ranked low nationally in international trade statistics.

The Massachusetts Institute for Social and Economic Research, which tracks world trade from all 50 states, said Nevada ranked 45th among the states in the dollar amount of goods shipped overseas in 1999.

Shriver said some export statistics are misleading because many states consider tourism an export product and include it in statistics and budgets.

Nevada exported $265.7 million in electronic equipment in 1999 and $198.2 million in miscellaneous manufacturing, the two largest export sectors for the state.

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