When 8kbet Brookings Mountain West and SRI International released an economic development strategy for Nevada in 2011, there were no pro sports in Las Vegas – or new stadiums and arenas to support them – a 8kbet medical school was still years away, Interstate 11 was only an idea, and Tesla did not have a footprint in Northern Nevada.
A lot can change in a decade.
The 2011 report was issued at a time when Nevada was working to loosen the grip of the Great Recession on one of the hardest hit areas of the nation. Since that time, Nevada has made vast improvements in its economic development efforts. The state has implemented policy reforms that engage both local and regional partners, and programmatic and physical assets have bolstered diverse industries statewide.
But despite this progress, shockwaves from COVID-19 have proven that Nevada’s economy, particularly Southern Nevada, is still highly vulnerable.
As the Silver State looks to continue its rebound from COVID-era economic impacts, Brookings Mountain West and The Lincy Institute released an update to the 2011 plan. The , offers a sweeping evaluation of the state of the Nevada economy over the past decade. It also suggests how policy and business leaders can rally around a new, focused agenda to address long-standing economic, educational, and social deficits and set the state up for a robust, sustainable recovery.
“Actions implemented in the wake of the Great Recession reformed Nevada’s approach to economic development,” said David Damore, report co-author, 8kbet professor and interim executive director of 8kbet Brookings Mountain West and The Lincy Institute. “Despite marked improvements to the state’s economic development efforts over the past decade, there’s still quite a bit of work to be done over the next five years to ensure a sustainable future for all Nevadans.”
Evaluating a Decade of Economic Growth
In their evaluation of economic development efforts since 2011, report authors acknowledged many economic bright spots – including the growth in sports and entertainment and a medical school in Southern Nevada, and the Tahoe Regional Industrial Center in Northern Nevada.
But, when compared to other states in the region, particularly Arizona and Utah, they argue that Nevada hasn’t done enough to direct state investment in economic development. They say the state needs to double down on its push to attract and build STEM-oriented industries, particularly in health and medical services.
Among the dozens of suggestions, authors argue that state leaders should more closely align economic and workforce development initiatives and engage with regional partners to boost the state’s technology economy. They also urged for greater coordination among Nevada’s 280,000-plus small businesses and for expansion of technology ecosystems that will attract private venture capital investment in Nevada and its businesses.
Although Nevada has a more integrated approach to economic development that has delivered some diversification, “the pandemic reinforced the state’s continued vulnerability to macroeconomic downturns due to over-dependence on the gaming and tourism sector,” authors say.
Three Nevadas
In its exploration of Nevada’s economic and demographic geography, the report presented the concept of “Three Nevadas” – regional clusters focused in the Central Great Basin, Metro Reno-Carson City, and Southern Nevada.
These distinct regions, report authors posit, require their own suites of policies to keep up with current trends and steer investments appropriately. Though geographically isolated, each is connected to larger megapolitan clusters. For instance, Southern Nevada has limited economic and social exchanges with the rest of Nevada, but via the “Southwest Triangle Megapolitan Cluster,” the region is highly integrated with neighboring Southern California and Phoenix and Tucson, Arizona. The authors suggest that focusing initiatives and partnerships within these interstate clusters “can fortify existing industries and help to overcome Nevada’s human-capital deficits.”
This is especially true in Southern Nevada, which is expected to experience roughly 85 percent of the state’s economic growth through 2050.
“Because densely settled metropolitan areas generate fiscal resources that subsidize smaller, more sprawled, and remote areas, prudent public investments can help sustain Nevada’s economic engine while elevating economies throughout the state,” authors say.
While the entire state will continue to grow and diversify, the aging of Nevada’s population will continue, resulting in even greater dependence on few labor-market participants. Authors argue for more investment in workforce training, higher education, and STEM-oriented sectors to “create a pipeline for employment opportunities in higher paying jobs instead of continuing to rely on lower-wage, service sector jobs that are unlikely to generate the tax revenue and skills needed to support a larger population of dependents.”
Federal Relief
Federal funds directed to Nevada, including CARES Act, ARPA and others, were designed to mitigate the devastating impact of the COVID-19 pandemic to the state’s economy. The report outlines how Nevada was provided unprecedented resources to assist the state’s recovery, and how the Nevada Legislature acted in a number of policy areas relevant to economic development and to support the state’s recovery from the COVID-19 pandemic.
Of particular note is the $6.7 billion in ARPA funds directed to the Silver State to respond to public health needs, replace lost revenue, and boost the economy through investments in infrastructure and other areas to spur growth and resiliency.
“It cannot be stated strongly enough the opportunities that ARPA provides Nevada,” authors say. “These funds provide the chance to make transformative investments at the state and regional level that can shift Nevada’s economic and social path for decades to come.”
Among the suggestions outlined in the report were to leverage incoming ARPA funds to increase healthcare capacity by establishing clinics in underserved regions of the state, build telemedicine resources for rural communities, and expand medical residency training programs to keep medical school graduates in Nevada.
Governance and the Green Economy
Nevada’s explosive growth and its increasingly complex economy bring both opportunity and challenges. To support regional economic development and improve responsiveness to rising policy demands, authors suggest that state leaders consider the benefits of annual legislative sessions (the Nevada Legislature currently meets every other year) and, in the interim, expedite reforms that maximize policy responsiveness and flexibility to advance important initiatives in the fast-growing state.
“A sustainable and diverse 21st century economy needs appropriately scaled and aligned governance that recognizes regional needs and differences,” authors say.
The report also includes suggestions for retooling governance structures for K-12 and higher education and updating transportation-related governance and policy to create the type of networks essential for economic development. This includes investments for light rail transit in Las Vegas and Reno and considering an eastern route for the Interstate 11 project through Elko County (and into Idaho and Montana) to stimulate economic growth.
As growth throughout the state continues over the next decade, authors argue that economic and demographic differences will only increase, hastening the importance of strengthening collaborations with neighboring states.
“Forward thinking action that follows the GOED example can move Nevada away from limited one-size fits all policy solutions and governance models and maximize the potential benefits of the unprecedented federal resources available to Nevada and its regions.”
Read the full report, “.”
