Top economist bullish on Reno-area economy

Scott Sonner

Wednesday, May 10, 2000 | 5:25 a.m.

RENO, Nev. - With its continued population growth and new efforts to attract high-tech business, Washoe County should be an exception to a national slowdown in the economy expected this year, Wells Fargo's chief economist said Wednesday.

"I'm really very positive or bullish about the local economy," said Sung Won Sohn, an executive vice president for Wells Fargo & Co. and a former senior economist on the President's Council of Economic Advisers.

Sohn cautioned, however, that northern Nevada's success at extending that growth likely will hinge on the region's willingness to invest more in education to develop a more skilled labor force.

"If there is going to be growth in high-tech and non-gaming sectors, there needs to be more education and a more skilled work force," Sohn said.

Otherwise Reno - with its 2.8 percent unemployment rate - won't be able to meet the needs of the high-tech companies moving from the Silicon Valley, he said.

"I'm not knocking what Nevada has done in the past," Sohn told reporters before a speech to about 200 people at an annual economic update sponsored by Wells Fargo Bank Nevada at the Silver Legacy Hotel-Casino.

"It's somewhat of a historical accident. The growth has been primarily in gaming and mining. That did not require a whole lot of education," he said.

"But the world is changing. Growth will not be coming from gaming and mining in the future. Growth will come from brain power, information and international trade," he said.

Job growth is expected to slow this year across the United States, including in Las Vegas and most of the rest of Nevada, Sohn said.

But he's predicting an increase in job growth in the Reno area, from 2.8 percent in 1999 to 3.5 percent this year.

Reno has been in the shadow of Las Vegas' nation-leading 55 percent growth in population in the 1990s, but nevertheless has been growing at a rate 2.5 times the U.S. growth rate of 1 percent a year, he said.

National economic growth is likely to slow in anticipation of rising interest rates and work force shortages, he said.

"We just don't have enough bodies. There are labor shortages from sea to shining sea," he said.

Since 1990, Washoe County's population has grown 27 percent - 32 percent in Reno and 30 percent in Sparks.

"Population growth is one of the key indicators of economic growth of any community," said Sohn, who is based in Minneapolis and was named by The Star Tribune as one of the 100 most influential Minnesotans of the 20th century.

"Reno is trying to diversify and repackage itself. It's not just gaming. It's a place to come to golf and ski. It's a place to do business and a nice place to live," he said.

Reno's location near Lake Tahoe and California is key, he said.

"It enables Reno to repackage itself as a destination resort where people can come with their families and go to conventions," he said.

High-tech workers in the Silicon Valley are looking to Nevada in general "and Reno in particular because it is less expensive and a better quality of life and it's not too far from the Silicon Valley," he said.

Amazon.com built a huge warehouse in nearby Fernley and iGo.com is based in Reno. The absence of a state income tax helps, he said.

"I think there will be more dot.com companies coming here. ... The fact there is no income tax is like giving them a 41 percent pay raise," he said.