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September 1, 2014

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Guest column:

Diversifying Nevada: This time really might be different

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Steve Marcus

A view of casinos on the Las Vegas Strip in Las Vegas, Nevada September 16, 2011. Flames form the “volcano” at the Mirage hotel-casino can be seen at left. STEVE MARCUS

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Remo Wuerth, left, and Sibylle Heinemann, tourists from Switzerland, chat in the rain after taking a bus to the "Welcome to Fabulous Las Vegas" sign Thursday, Jan. 21, 2010.

What do you think?

What are your thoughts about economic development in Nevada? You can comment on this column or write a letter to the editor. (You can send a letter via email, 250 words or less, please, here: [email protected].

Here are some links to give you more information:

The Brookings report on economic development in Nevada.

• The Sun's story about the report.

• A Sun editorial about confronting the issues.

• A Sun editorial about the state's vision.

• A Sun editorial about education and economic development.

Nevadans can be forgiven a degree of skepticism about the notion of economic renewal, not to mention about “Unify / Regionalize / Diversify”—the new state economic development agenda my team at the Brookings Institution, Brookings Mountain West, and SRI International presented to Gov. Sandoval last month.

Having watched nearly 170,000 jobs disappear since the beginning of the recession, Nevada communities are reeling and it is hard to credit the available prophets of prosperity.

Nevadans have seen a lot of studies, seen a lot of grand plans. Moreover, you’ve seen plenty of drift and squabbling.

For that reason you have been right to ask why this time is different and how exactly the state should move from vision to execution, concepts to business plans.

And yet, while doubt is understandable, I think for once it’s possible to say with confidence that not only is change afoot but that a practical and plausible path forward is beckoning—indeed, has already been chosen.

First, this time is different. Not only has the gravity of the current situation served as a wake-up call, but AB 449—the state’s landmark economic development reform law—has already happened and ensures that much is already in motion.

We provide recommendations on preparing a true state economic development plan, deploying a Catalyst Fund for “deal closings,” and managing dealings with the state’s regional development authorities (RDAs). Yet progress on all of those fronts will definitely occur because AB 449 mandates action. Things are going to change because the law says they have to. In like fashion, response to many of the ideas my group has presented is now a matter of required or voluntary administrative action rather than a time-consuming legislative wrangle. Work has already begun.

And yet, it’s true there is a lot to do. Much toil lies ahead to reinvigorate and reorient the economy, and I’m sure it seems like a daunting task.

However, emerging from our study process I have a few thoughts about how to address the coming challenges.

First, our work counsels Nevadans to reject grandiose thinking or silver-bullets and get your hands dirty with real-world, piece-by-piece execution.

We have tried to look at your economy as it really is. In the same way, I think the trick now for Silver Staters is to focus on the real economy, real market niches, and the basic block-and-tackling of improving your industries firm by firm, expansion by expansion, cluster by cluster.

Rome wasn’t built in a day nor will the next Nevada likely be built with flashy 5,000-job firm relocations.

Instead, we recommend a more grounded approach that calls on state, local, and private-sector leaders to set a compelling sector strategy, put in place an effective set of aligned efforts, and build from the ground up.

This is why we talk so much about your regions, your documented local clusters, and the dynamics of what the cluster guru Michael Porter calls “local things:” local supply chains, local trade associations, your business networks, your RDAs, your municipalities, your economic development non-profits, and your university-business-community college exchanges.

In this way, it’s about growing the economy 80 jobs, and 300 jobs, and 20 jobs at a time as you strengthen smart local clusters; fill supply chain gaps; and work out new export or FDI deals.

Likewise, it’s less about grandly “turning the economy around” than about seeing if you can expand the health and medical services industry by 15,000 positions over the next five years or generate 6,000 or 7,000 jobs in what we call business IT ecosystems.

In that sense, the next phase should not be about grand schemes but about getting onto the same page, breaking the work down into chunks, and getting going.

And speaking of “getting going:” As the state moves toward execution, we think the Brookings-SRI agenda is staged in a way that points to how it can be plausibly implemented.

Sure, there’s a lot here: 37 recommendations supporting 10 strategies aimed at bolstering 30 target niches in seven industries.

But if you look at our three-part agenda, the recommendations within the “Unify” and “Regionalize” themes are either already happening (produce a state plan; deploy the Catalyst Fund smartly; sharpen up RDA management) or relatively inexpensive (provide competitive matching grants to support bottom up cluster initiatives, export plans, and the like). That suggests that the state’s leaders can do some very important things quite soon even as they mull the heavier lift of our “Diversify” set of recommendations aimed at setting a true state platform for innovation and commercialization, global engagement, and aligned education and workforce training.

In that sense, we do advance a lot but it’s pretty easy to see what should come first and what matters most. In that sense, the state can get started, score some early wins, and so prepare itself for achieving bigger tasks in the 2013 legislative session.

And so with that I have to say that while doubt is understandable I think this time optimism is justified.

I hope more and more Nevadans will come to agree and channel their admirable energies and urgency into making it so.

Mark Muro led the Brookings Institution, Brookings Mountain West, SRI International team that produced “Unify / Regionalize / Diversify.” Mark is a senior fellow and the policy director at the Metropolitan Policy Program at Brookings and the co-director of Brookings Mountain West.

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  1. We have heard the rhetoric many times, the problem is not a dearth of ideas, it is a lack of action. Speeches do not build factories or move industries to places where they are desperately needed. When I see an increase in diversified, non tourist oriented commercial enterprise coming to Southern Nevada I will applaud the efforts. Until then it has the distinct flavor of baloney.