To plan and be able to seize opportunities in the future requires an ability to predict what that future will be. The newest tool for considering the future of the state’s economy is the result of a collaborative public-private effort by the Office of the Secretary of State and Applied Analysis. Statistics that show the number of filings of new entities, and total filings of lists with my office are now demonstrating a newly found value as leading and lagging economic indicators for Nevada. These indicators were identified through an analysis of information that has existed for some time, but has only recently been compiled in a user-friendly, analyzable format.
With nearly 300,000 corporate entities on file, it’s my belief that the massive amount of corporate filings data stored in my office is an information resource that can be put to work for the state. In discussing the potential for using that data with Jeremy Aguero of Applied Analysis, we came upon the idea of publishing a Quarterly Economic and Business Activity Report (which is now available online at www.nvsos.gov). In the course of analyzing the data from my office, the experts at Applied Analysis realized that there are significant and statistically credible leading and lagging economic indicators. Those indicators are the kind of tools that economists and the business community can use to forecast and plan for the future. They are not the final word on the economic future, but like any indicators, they are a valuable part of a larger universe of information to be considered when forecasting the economic climate.
In fact, these new indicators may prove to be among Nevada’s most reliable economic indicators. New filings in the Secretary of State’s office have been identified by Applied Analysis as a “leading indicator.” The term “leading” in this case denotes a measurable economic trend that occurs prior to the rest of the economy exhibiting that trend. A dramatic decline in new filings that began in mid-2005, presaged the economic downturn. It’s with 20/20 hindsight that we can now see that downward trend. With continued analysis, we can use that hindsight to validate what the trending numbers tell us. The message from the current data is that there’s a good chance that Nevada’s economy is slowly rebounding. The number of new business filings in the first quarter of 2010 showed positive growth for the first time since 2006.
The Total List Filings from have been identified as a “lagging indicator,” following rather than leading the trend of the general economy. They play an important role, providing information on how Nevada’s base economy is performing. When annual filings decline, that tends to indicate the base economy is shrinking; in turn, when they remain steady or increase, the base economy is stable or expanding Current trends point to increased stabilization, particularly compared to 2009 and 2010.
The value of the information and analysis in the Quarterly Economic and Business Activity Report notwithstanding, there is another, broader benefit to be considered. The application of technology to manage the data within my office reflects a commitment my staff and I have made to expand the ability of the Secretary of State’s office to serve Nevadans, particularly the business community. When we considered the resources available, and the relationships that existed through the various responsibilities of the Secretary of State, we came to the conclusion that the Secretary of State’s office can be a positive force in the economic development community in Nevada by acting as a facilitator, coordinator and originator of ideas.
The ability to take on this role, and do so effectively, is rooted in embracing the latest technology available. The best example is the development of the Nevada Business Portal, which will ultimately allow “one-stop shopping” transactions between businesses and all levels of government from state agencies down to municipalities. The Portal, which will launch its first phase this summer, will employ service-oriented architecture with a single, web-based point of entry for business to government transactions. This “business-centric” model will be the most advanced of its kind in the entire nation, and will not only make doing business in Nevada easier and more efficient, but will also send a clear message to potential new businesses that Nevada is business-friendly in a proactive way. Similarly, our website for economic development information brings together economic development stakeholders from throughout the state to provide specific local, regional, and state information that is pertinent to new and relocating businesses.
I believe we are using our technology resources to create an environment in which we can transcend the traditional obstacles in business to government relationships, and which can ultimately break down the specious dichotomy of government versus business. It’s the public and private sector that, together, built this country and this state, and it’s the two together that will demonstrate the resiliency necessary to see Nevada not just through the economic downturn, but into a future of prosperity.