Does Diversification Get Forgotten As Nevada Economy Rebounds?
An unforeseen calamity cripples the economy, hurting tourist-dependant Las Vegas more than any other community in the nation, and prompting calls for diversification.
That’s what happened during the pandemic when the Southern Nevada unemployment rate topped 30 percent in spring 2020. It also happened a decade earlier when Las Vegas was ground zero in the housing crisis and recession that followed.
That earlier downturn led to statewide soul-searching and an economic diversification blueprintthat called improving infrastructure and healthcare among a long list of proposals.
Many business leaders are still encouraging government officials to make a greater commitment to diversification. California companies, they say, are primed to leave the high-tax, high-cost state, and given the right incentives, they could be lured to Nevada.
“Nevada is a place where people want to come to (visit), why can't they come and stay,” asks tech entrepreneur and new Las Vegas resident Teddy Liaw.
Liaw said Nevada’s proximity to California gives it advantages over other markets that are farther away from the Golden State’s people and investment dollars.
“The fact that there's still access to the money and the (venture capital) of California is huge,” said Liaw, CEO of call center technology company NexRep. He added that today’s remote-working environment could help the state overcome its lack of homegrown engineers.
“Working from home was not cool,” he said, but the pandemic brought technological changes like the rise of Zoom, and today companies are “embracing working from home and virtualization.”
Las Vegas Councilman Brian Knudsen said Las Vegas’ fast rise as a sports city — with NHL, NFL, WNBA, and, perhaps soon, Major League Baseball teams — shows its ability to quickly reinvent itself.
“You can make Nevada, whatever you want it to be,” he said. “And we've seen that time and time again, where Las Vegas dramatically adjusts to the population and recreates itself.”
Knudsen points to his ward’s Las Vegas Medical District, which includes UNLV’s Kerkorian School of Medicine, as an example of economic diversification that can feed on itself.
“We export about $2.8 billion in healthcare out of state,” he said. “If we were to build that medical industry, that's where we create that economic diversification.”
A top state economic development official said the success of bringing manufacturing and more knowledge-based jobs to the Reno area over the last decade shows that diversification is possible in Nevada.
“Almost all the metrics you look at, whether it's the unemployment rate, whether you talk about the share of the employment mix — diversification is going on,” said Bob Potts, deputy director of the Governor’s Office of Economic Development. Because of that, he said, “Northern Nevada survived this downturn much, much better than Southern Nevada did.”
Potts applauded the energy he says the business community has shown coming out of the pandemic, but warned against complacency setting in, particularly if the tourist economy remains strong.
“I love all the optimism,” he said, “but my concern is that when things are back, and everything's good, it's just going to go back to what we did before.”
Brian Knudsen, Las Vegas councilman, Ward 1; David Knight, founder and CEO, Turbine; Teddy Liaw, CEO, NexRep; Bob Potts, deputy director, Governor’s Office of Economic Development; Ryan Smith, business development manager, city of Las Vegas