Teamwork the key to economic growth, Sandoval says

Despite the troubling distinction of having the highest state unemployment rate in the nation, there are signs that Nevada's economy is improving, Gov. Brian Sandoval told 500 business leaders today in Las Vegas.

As proof, he pointed to growing Strip visitation numbers compiled by the Las Vegas Convention and Visitors Authority as well as 14 consecutive months of increased sales tax collections, a positive measure of the state's retail trends. Yet Sandoval noted future growth will hinge on state and local cooperative efforts to diversify Nevada's economy.

"We will succeed only if we work together. Economic development and the building of a community is a team sport," Sandoval said during the annual luncheon of the Nevada Development Authority, held at the Bellagio. "Economic development is a journey, not a destination. There will be mistakes. There will be false starts and even a few disappointments."

Sandoval delivered his comments three days after the release of a report laying out an economic diversification plan for the state. The five-month study, conducted by the Metropolitan Policy Program at the Brookings Institution, identified potential solutions to the economic challenges facing the state. It specifies industries and industrial clusters with the highest potential for expansion as part of an economic diversification effort.

"You have to ask yourself after you read that report, 'What can I do to help move Nevada's economic recovery ahead?' " Sandoval said. "We're not going to re-create the wheel. Our plan will be a living plan."

The key industries and sub-industries identified in the Brookings report include tourism, gaming and entertainment, health and medical services, business information technology, clean energy, mining, and materials and manufacturing. The study says the state should work toward becoming a West Coast hub of logistics and operations for transport, distribution and operations, and should build on its aerospace and defense sectors. It also recommends that Nevada "align higher education and workforce development to strategic economy opportunities."

The report reads: "Silver Staters sense that the current economic slump has not been just a temporary reversal, but a challenge to the state’s traditional growth model, one that has revealed an economy overdependent on consumption sectors, prone to booms and busts, and too little invested in innovation and economic diversification. And yet, for all that Nevadans have been early to recognize that the current slump will beget, in some places, innovation and renewal, and in other places erosion — and so requires action."

During the recent legislative session, Sandoval successfully pushed legislation giving the state's governor leadership of Nevada's economic development and diversification efforts. In fact, he struck an appreciative tone for the NDA's work toward economic recruitment and diversification, citing a recent inquiry he received from an Arizona business owner who was seeking to relocate his operation to Southern Nevada. The governor said he learned of the potential move on a Saturday and immediately contacted NDA Executive Director Somer Hollingsworth, who spent of much of his weekend working to recruit the business.

Despite Sandoval's sentiment about the NDA, the organization has become a target of critics who say it has not done enough to help diversify and expand the Southern Nevada economy. Sandoval recently appointed Las Vegas construction contractor Steve Hill, an NDA critic, to serve as the state's director of the Office of Economic Development. A longtime Las Vegas Chamber of Commerce activist, Hill has questioned the wisdom of past marketing efforts by the NDA, which has used a significant share of its $2.2 million annual budget to promote the region with at-times offbeat commercials that air in Southern California and take shots at the Golden State's tax and regulatory policies. The spots typically tout Nevada's low-tax, limited regulatory environment as a competitive advantage.

This past spring, Hill told VEGAS INC magazine: “We’re edgy at best when we use that type of advertising, and it doesn’t make us look so serious when an Intel looks at Las Vegas. I think it plays into the image of ‘What happens in Vegas stays in Vegas.’ I don’t know that they see a serious business community in Las Vegas, and I think that’s an image change we have to make at this point. And I think the NDA would agree with that.”

Critics have contended that the state's past economic development efforts were inadequately funded and lacked a broad-based commitment to diversify Nevada's economy. They point to a $10 million "catalyst fund" that was backed by Sandoval and created during the state's recent legislative session to help generate economic growth. They note that it lags far behind similar efforts in Utah, Texas and Ohio, each of which is competing with Nevada for many of the same employers. Utah, one of the most politically conservative states in the country, has invested more than $80 million from the general fund since 2006 to build an entrepreneurial partnership between business and higher education.

Sandoval acknowledged that it would take time and the efforts of organizations, government agencies and businesses to transform the state's diversification efforts.

"We will succeed only if we work together," he said. "Economic development and the building of a community are a team sport."

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  1. What would Sandoval know about growth? Since he's been governor of Nevada we've not seen a lick of growth.