Wednesday, Aug. 17, 2011 | 2 a.m.
In August, Brian Greenspun turns over his Where I Stand column to guest writers. Steve Hill is today’s guest columnist. Hill, who manages Nevada operations for CalPortland — the state’s largest concrete supplier — was chairman of Gov. Brian Sandoval’s economic development transition team.
“Here We Go Again” was one of the headlines following meetings of top elected officials, industry leaders and the consultants tasked with providing information upon which Nevada will develop a state economic development plan.
I understand the skepticism. I imagine you do as well. We seem to have put together a lot of plans, on a variety of subjects concerning Nevadans, quite a few of which are gathering the proverbial dust on that infamous shelf.
Although I do think this time can be different, I’m not going to ask you to just take my word for it. That wouldn’t work. I do, however, think it’s fair to ask what has caused the skepticism with respect to economic development, what needs to change to produce results and develop credibility, and whether we are headed in that direction.
It’s important to understand that until about 10 years ago there was disagreement as to whether the state even needed an economic development effort. Then, during the boom years of 2002 through 2007, gaming and construction provided more economic growth than we could handle. Who had time for economic development when so many were busy with guest appearances on “Flip This House”?!
That all changed when the housing bubble burst and the economy came to a screeching halt. At the peak, construction workers represented 12 percent of the workforce in Las Vegas compared with a national average of 5 percent.
We’re down to that 5 percent now and will almost assuredly never see anything approaching 12 percent again. When you have 14 percent unemployment and half of that unemployment is in an industry that isn’t coming back, it gets your attention.
Although economic development professionals have been working for decades to diversify our economy, and have had some success, they have not had the resources necessary to implement significant change. They have lacked funding to staff, research and market properly, and they have not always had the full attention of the other participants crucial to economic development — top elected officials, state and local government agencies, the university system, workforce development and parts of the business community.
On the other hand, the few resources we did have were dispersed over a broad range of initiatives and the focus of economic development has been almost solely on recruiting businesses from out of state. This broad-but-thin approach has produced some new businesses in Nevada, but has not produced new economies.
Focusing only on bringing businesses from another state is just a portion of real economic development, and a small portion at that. A full economic development effort requires innovation at our universities and in our businesses, with the full complement of tools necessary to commercialize those innovations — financing sources for all sizes of businesses, business and management expertise, and the necessary workforce.
Real economic development also includes helping small- and medium-sized businesses grow — the same financial, management and staffing resources, but also providing them with information about their markets, who their customers could be, helping them make connections with potential U.S. and global customers and partners. State and local economic development entities need to be an information and facilitation resource for our in-state businesses.
In other words, our economic development efforts need to change from being dispersed and thin, to focused and deep. We need to build economic sectors — businesses and their customers, suppliers, workforce and resources — not just attract a disparate group of businesses to the state.
We need to support those sectors with smart tax and tax incentive policy, the right infrastructure and the correct legislative and regulatory environment. Economic development is about building a long-term, sustainable, smart economy in our state. Alone, it cannot solve an immediate unemployment problem, but it can help the next downturn be less painful.
Assembly Bill 449 — the recently passed economic development restructuring legislation — along with an enhanced budget for economic development and the Brookings/SRI report will lay the foundation for a refocused effort going forward. Gov. Brian Sandoval, Lt. Gov. Brian Krolicki, Secretary of State Ross Miller, Assembly Speaker John Oceguera and Senate Majority Leader Steven Horsford were all very involved in these steps.
They know that a bipartisan, unified effort is necessary and are committed to working hard to help develop a focused state plan they can all support. Our higher education leaders know they need to provide great research and instruction in targeted sectors. K-12 leaders want to develop curriculum around future employment opportunities for their students.
But economic development is not a spectator sport. You have a role as well. Graduate from high school or make sure your children do. Get a college degree or training in one of the sectors of focus. Pursue a science or technology degree. Provide advice to a small business to help it grow. If you’re a procurement manager, think about whether buying from a local supplier might help you both.
So are you less skeptical now? Maybe not. After all, even a great plan doesn’t mean much if the plan doesn’t translate into actions that produce results. How about this, then? Let’s suspend our skepticism for a while, roll up our sleeves, and get to work.