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July 23, 2014

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2020 Vision:

To predict 2020, hindsight from 2010

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Rob Lang, director, Brookings Mountain West at UNLV, imagines himself in 2020, looking back to 2010.

It is hard to imagine in these heady days as we enter the third decade of the 21st century how grim conditions in Las Vegas were just a decade ago. After a half-century boom, the region found itself in its biggest bust. Sure Las Vegas had seen bad times before, but this downturn seemed to challenge its whole business model. By 2010, almost half the valley’s economy was bound up in construction and tourism, which both tanked in the Great Recession of 2008-10. But, it turns out that the shock of this bust turned in to a giant wake-up call. Things had to change, and fortunately they did.

The key words to describe this shift are “diversification and connection.” The region leveraged its competitive advantage as a well-connected world city to radically diversify its economy.

Las Vegas got lucky as it rode the wave of new technology that transformed the energy economy. Few could see how fast solar power would improve and that Las Vegas — and Nevada in general — would become a leading center of production and research. Similar bursts in technological innovation have happened in other industries in just a single decade. Think of the personal computer during the 1980s. Or better yet, look at how cell phones jumped in capacity just a decade ago.

In the 2010s, it was solar’s turn. Solar matrices today blow away the 2010 “solar panels” the same way the original iPhone made the once-revolutionary Motorola StarTac look like a kid’s toy. As home to the nation’s largest annual Clean Energy Summit, Las Vegas was on the map early in this emerging industry. Now a year-round effort, the Clean Energy Consortium is one of the world’s forums for developing, testing and displaying new technology.

New industry: Design

Las Vegas also became a design center for the United States — hence its new monikers the “American Milan” and the now ubiquitous “Vegas Style-Design.” It all started with the furniture trade shows that migrated to the region from their original home in North Carolina because the event needed a Vegas-sized venue. This led to the World Market Center as a permanent trade show. Next, interior design industries were drawn to the city. What looked like a small industry flourished as houses and home furnishing went green.

The technology needed to make buildings green sparked innovation in industrial design. Now the region hosts the leading industrial design shops from Europe and Asia. The use of solar power in everyday products also draws these firms to Las Vegas because we are so innovative in the multiple uses of this energy.

Gaming made Las Vegas and remains the gift that keeps on giving. Gaming led to big hotels, which became venues for entertainment. In turn, the ever-expanding scale of hotels on the Strip produced the capacity for an equally large convention trade. With a targeted economic development program, the region exploited its advantage as the nation’s largest convening center to grab trade shows and make them permanent fixtures in the regional economy.

The increasingly diverse 2020 Las Vegas economy now resembles an onion, with gaming at the core, then hotels, then construction, then entertainment, then shopping, then conventions, and finally the last ring of new businesses born of conventions such as design and energy. In coming decades, this outer ring will expand to perhaps dwarf the region’s old core industries.

Birth of ‘Sun Corridor’

Finally, there are the local and global connections that vastly improved during this decade. It’s hard to imagine now as we complete the high-speed rail line to Los Angeles and the interstate to Phoenix, but Las Vegas’ links to its most important neighbors were way under the needed capacity. The city had just an old Eisenhower-era interstate to L.A. and (this is hard to believe) a Great Depression-era road to Phoenix. Soon we will fully benefit from the new rail and highway improvements.

Greater Phoenix and Tucson (or what we now call the “Sun Corridor”) is Vegas’ key partner region in the vast southwestern solar power industry. The new six-lane road to central Arizona will bring Sun Corridor suppliers closer to the Clean Energy Consortium complex.

The high-speed rail is also a godsend. Southern California has always been the single most important connection for the valley. It is the source for the largest numbers of tourists and immigrants to the region. Now a train — using mostly locally generated solar energy and managed by Southwest Airlines — will whisk people to the Southland. In one step, Las Vegas reduced almost a third of the flights from McCarran International Airport.

This reduction comes in the nick of time because we need that capacity to handle the explosion of overseas flights to the region. The revolutionary Boeing 787 and Airbus 350 have greatly improved the efficiency of long-haul air travel and resulted in an explosion of connections. In 2010, Las Vegas had just a handful of direct flights to Europe and Asia. Now it has dozens of links, and many of these are to the key partner cities in the design and solar industries. Las Vegas also now connects to the lead cities in business services such as finance, advertising, and management consulting — all sectors the city is now targeting in its next round of economic expansion.

CityCenter offered hope

This past decade, the old Vegas gave way to the “New Vegas” as the economy diversified, new connections emerged, and the era of megaresorts ended. Luckily, the megaresort era did not end before producing the city’s crown jewel — CityCenter. Delivered in the dark days of 2009, in just 10 years this project matured and is now to Las Vegas what Rockefeller Center is to New York.

Delivered in the heart of the Great Depression, Rockefeller Center eventually filled and then anchored the general expansion of midtown Manhattan into the largest business district in the United States. CityCenter is now poised to do the same for Las Vegas.

Conceived as a dense, mixed-use urban project, CityCenter actually delivered. It is now the place for a variety of industries, especially design firms. CityCenter’s newly expanded office complex completes its transformation from a citylike project into a real city. It now sits as both hub and symbol of a region transformed.

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