Published Tuesday, Feb. 7, 2012 | 10:16 a.m.
Updated Tuesday, Feb. 7, 2012 | 5:14 p.m.
Gov. Brian Sandoval, unveiling the state’s new economic development plan, challenged the state’s businesses on Tuesday to create 50,000 new jobs by the end of 2014.
The plan is a blueprint for remaking the state’s economic development efforts, hinged on regional development authorities and a statewide economic development director who will report to the governor and have new powers to authorize grants.
State “industry specialists” will work with specific business sectors to increase exports and help connect higher education research and development efforts to business needs.
Sandoval said the plan will reorganize and better focus the state’s economic development efforts.
“This is going to be remembered as a historic day,” he said during a presentation at UNR. “We’re all going to push forward together.”
Nevada, with 166,000 unemployed looking for work, leads the nation with a 12.6 unemployment rate. Sandoval said the new plan, the result of bipartisan Legislation passed in 2011, differs from other states’ because it details tactics to diversify the state’s economy and creates benchmarks to hold the agency accountable.
This includes hiring regional “sector specialists” to attract, expand and retain businesses.
Economic development efforts will be reorganized, with regional development authorities applying for funding.
The regional groups will report to the Governor’s Office of Economic Development, led by Steve Hill, a former construction company owner and active member in the Las Vegas Chamber of Commerce.
The fate of the state’s existing economic development agencies is unclear. Somer Hollingsworth, president of the Nevada Development Authority, which covers Southern Nevada, was not available for comment on Tuesday and not at the presentation on Tuesday.
Hill said the existing economic development agencies will be asked to do more than they have.
The state’s finalized plan was based on a 178-page report prepared by researchers with the Brookings Institution and SRI International. That plan identified seven areas for the state to focus on, based on the state’s strengths. That included a renewed focus on gaming technology and innovation, developing the private aerospace and defense industries, and renewable energy.
The law that created this new structure came with a $10 million “catalyst fund” to help recruit businesses to Nevada and expand businesses. It also created a “knowledge fund” which, Hill noted, was not funded. He said the group is looking for private donations and money from other sources.
Hill acknowledged to the crowd of higher education and business leaders that there have been past efforts in Nevada at economic development but said it didn’t get the focused attention it needed.
“We have not had to focus on economic development in the past because we were doing well,” he said. “It kind of happened on its own.”
He said relocating businesses from out of state is just 5 to 7 percent of job creation.
“We will be helping existing businesses grow and new businesses start up,” he said.
Hill and Sandoval said economic development will work closely with higher education and K-12 education to produce a trained workforce.
Sandoval has made economic development one of the main focuses of his first year in office. But his budget has been attacked by Democrats, faculty and labor unions because of cuts to education funding he proposed in 2011.
On Tuesday, the libertarian think tank Nevada Policy Research Institute criticized his new plan for interfering with the free market.
The plan calls for seven state “industry specialists” in different economic sectors.
“It’s a statement of abandoning a belief in free market enterprise,” said Geoffrey Lawrence, deputy policy director for NPRI.
He said new industries will be looking for subsidies to get off the ground instead of consumer demands.
“Investments will be subject to political factors,” he said. “It's going to become highly politicized.”
He said the state economy is starting to recover, something the report starts out by acknowledging.
“This is a big disappointment,” he said. “I think it’s a crony capitalist scheme.”