GOED: Economic recovery plan to focus on tech, advanced manufacturing, logistics, healthcare
RENO, Nev. — In February, the Nevada Governor’s Office of Economic Development was in the process of blueprinting a five-year strategic plan for the Silver State, with the goal of rolling it out by mid-spring.
A month later, however, plans changed.
“We really had the wheels turning and moving forward, hoping to have a strategic plan in April or May,” GOED Deputy Director Bob Potts said in a recent phone interview with the NNBW. “And then COVID hit us in March.”
As the state felt the unprecedented economic shocks caused by the coronavirus pandemic and Gov. Steve Sisolak’s various business closures and capacity mandates, GOED shelved its five-year strategic plan and began working with nonprofit research institute SRI International on a 18-to-24 month recovery plan.
The NNBW spoke with Potts about GOED’s “Nevada: Action Plan for Recovery and Resilience” plan to discuss, among other things, the plan’s short- and long-term focuses, what industries will help the state bounce back, and what building back a workforce in the COVID era will look like.
Q: How did the process of putting together a recovery and resiliency plan start?
Bob Potts: Since March, I have been facilitating weekly calls with our regional development authority partners — EDAWN, NNDA, LVGEA — plus most of the executive branch agencies — taxation, governor’s finance, DETR, commission on tourism — making sure everybody is on the same page. I’ve also rolled in private-sector consultants and chambers of commerce, as well. That creates a foundational dialogue because of the dynamics of what we’re going through for us to put together this recovery and resiliency plan.
Q: What are the biggest challenges Nevada faces in its road to recovery?
Potts: Nevada tends to be very, very procyclical, because of exposure to economic downturns, especially — this was kind of a real arrow to the heart — in Southern Nevada, where so much of our economy, roughly a quarter of the employment base, is directly tied to hospitality. So that’s really been a big hit, and we can see it in the numbers as they play out. In Northern Nevada, we’re at an 8% unemployment rate in Reno, where Clark County is at 16.4%. That’s very reflective in the differences in the regional economies in our state. The rural areas are even less impacted. It’s a direct tie to proximity of people and communicability of this virus.
How do we look at what’s gone on in Reno and the diversification that’s happened up here, and how it hasn’t been as impacted by the procyclical nature of these highly exposed industries? How do we take those lessons learned and say, OK, what can we do in Southern Nevada? They’re different economies, but they have a lot of similarities on the fiscal side of things; on the state finance side of things, at least, we’re very much joined at the hip. We’re all tied together in this thing, so we’ve got to work through this as a team in broad terms.
Q: What are the short-term focuses of the plan?
Potts: We’re figuring out how we support businesses as we starting moving into the new normal and developing a workforce for the new normal. Then we start thinking about the resiliency side of things and how do we make it safe? We have industries where customers are in proximity to workers and workers and colleagues are close to each other. How do we scout out new technologies and stay in front of that, as far as keeping people safe?
How do we keep our fingers on the pulse of a vaccine, and what does the efficacy of that look like? How do we tie together both the economic and health data, and pull all the pieces together? How do we tie taxation data into budget data into gaming data into labor market data into visitor data? And how does that all relate to the health data? That’s really important for this econ group, so they can provide good direction and advice for policy and decision-makers.
Q: What industries is the Nevada recovery play focusing on?
Potts: We were (pre-COVID) focused on roughly seven industry sectors. We have scaled that back to four statewide and it will vary some by region. We’ve seen that we have a propensity to be very competitive in advanced manufacturing, logistics, technology, and healthcare. Compared to the national average, we’re only about two-thirds of where we should be on the healthcare side of things. On the technology side of things, the play that’s going on with distance learning and telehealth, we’ve had to ramp that up exponentially during this crisis. How do we keep the momentum of that going?
Tech, of course, cuts across all of the industry sectors, whether you’re talking about logistics and how the products are moved or whether you’re talking about advanced manufacturing and the merging of man and machine. So that gets rolled into the conversation.
Q: What are some longer-term elements of the recovery and resiliency plan?
Potts: One of the things we’re building into this medium-to-longer term is fully funding what was put together in the 2017 legislature — an infrastructure bank. It is a mechanism for us to help fund these infrastructure projects, whether you’re talking about an industrial park, whether you’re talking about building out rail, whether you’re talking about EV (electric vehicle) supply chains.
We’re very well poised to be a leader in the EV supply chain, all the way from the dirt in the ground and the lithium capacity we have in the state to battery manufacturing. If you think about mining in the state and the copper mines we have here, an electrical vehicle takes five times the copper that a traditional combustion engine vehicle takes. There are a lot of synergies there. But what we have to build out to fill some of those gaps would include infrastructure elements like rail.
Q: What amount of attention will the plan give to Northern Nevada versus Southern Nevada and urban versus rural?
Potts: We’re trying to show equal attention to everybody. You have to think about them differently. If you look at the unemployment rate right now, obviously Southern Nevada is in a big crisis, so in the recovery period you have to keep that in mind. In the long-term, this has to be a cohesive ecosystem where it’s not north and south; it’s not urban and rural; it’s Nevada.
We think about what’s happened at the Tahoe-Reno Industrial Center. Everything that’s going on out there, you see these ripples moving out how it affects Fernley, how it affects Fallon, how it’s starting to effect Carson and Minden. It’s really starting to ripple out and have big impacts.
Q: What does building a workforce for the ‘new normal’ look like?
Potts: How do we get these dislocated workers back to work or on career paths? How do we guide them in the direction to start thinking about choosing a career path that complements diversification strategies in our state toward a more resilient economy and helping us with this procyclical nature? As we start exhausting the $600 a week benefits that came from the feds, going into the end of this year, and the first quarter of next year, how do we create a resiliency to keep everybody on their own without getting financial injections to keep them afloat?
I mentioned the target sectors we’re really focusing on, all of those need to be staffed. Any one of those industries, there are opportunities for folks that can find space in there. There’s a wide range — from people that are very gregarious in the marketing side of things to people who are very research-oriented in R&D or people that love to work with their hands. I think there are a lot of opportunities out there.
Editor’s note: This interview was edited and condensed for clarity.
“The thing that I like most about entrepreneurship is I can work toward something that I’m passionate about and be at the forefront of the change that I want to see happen,” said Priyanka Senthil, a senior at Davidson Academy in Reno and co-founder of startup company AUesome.