The economy is constantly changing and, there are many factors at play when it comes to determining economic health. Thankfully, according to economic development leaders, Nevada is in a position to create positive outcomes. Recently, executives representing economic development in the Silver State met at the Las Vegas office of City National Bank to discuss Nevada’s future.
Connie Brennan, publisher and CEO of Nevada Business Magazine served as moderator for the event. The magazine’s monthly round-tables bring together industry leaders to discuss relevant issues and solutions.
How Big of a Challenge is a Workforce?
Mike Kazmierski: The [greatest] economic development challenge I see is workforce development. We have run out of labor. You either need to hire someone away from another company, which means they [are] out a worker, or you need to bring talent in.
Jonas Peterson: From my point of view, the clear challenge is finding, keeping and training talented workers and it’s only increasing in importance. It is the conversation we have with companies evaluating our market. The competition isn’t slowing down. We’re at full employment right now. If we are going to fill high-wage jobs, we have to train up existing workers, we have to find new talent and that challenge is only growing in importance. We need to do more and we need to be creative.
Ken Chapa: I think you’re going to be hearing a reoccurring theme here. The next focus is going to be on workforce. I think there’s a real mis-perception of what the workforce is here and what our capacities are. We need to be better about really getting the word out about that –marketing and making sure that people on the outside understand that there is a workforce here.
Jamie Cruz: The most important thing, I think, is that there is a pipeline that can produce a qualified workforce to sustain the economic development that we all aspire to here, for our region. We’ve been working [on projects] with Jonas’ team, Ken’s team, Terri’s team and other partners. On Tuesday, Clark County is going to be receiving a national certification as a work-rated community. What that means is, the education system K-12, CSN, the public workforce system and the economic development system have come together to really try to align that pipeline. It doesn’t happen overnight, but at least the processes are in place. The commitment is there, and again, we are the largest county in the nation to receive that certification.
Jeff Brigger: I’m going to look at this a little differently. I don’t think our significant challenges are any different than anywhere else in the country right now. Affordable housing is an issue everywhere, workforce is definitely an issue if you hear from our colleagues across the country. I think our challenges are going to be how we address those issues. Whoever solves those challenges is going to be at the forefront of economic development nationally. I think we’re positioned well to do so. It is a national problem. As automation happens and we move people or we lose people in those lower-skill positions, if we’ve got the right programs in place, we could lead that issue nationally to get people to the next level.
What Role Does Technology Play in Workforce?
Kazmierski: There’s been three different [industrial] revolutions. We’re now in the fourth revolution which is a combination of technologies [such as] your smart watch, smart phones and monitoring devices. The technology associated with all these things allow for work to be done differently. You’re checking yourself in [at airports]. You put your own stuff in the bag [at stores]. You do everything other than cook the burger [at fast food restaurants]. We’re seeing more of that which means lower paying jobs are disappearing at a rapid rate and being replaced with higher-paying jobs that are more technology-oriented. The fourth industrial revolution is totally changing the kinds of jobs people are doing. We have several great fourth industrial revolution types of jobs—we talked about block-chain, we talked about research development. We’re seeing those kinds of jobs coming.
Kristopher Sanchez: With the disruptions in technology and industry, it’s not going to hit us all at once, it’s going to be gradual. We’re already seeing some of that taking place within our primary industry here. Now is the time to be thinking about, in my estimation, how we look at that in our recruiting metric and understanding the nexus between these types of companies.
John Restrepo: It’s a whole issue of, what’s automation going to do to the workforce? And, what impact is it going to have at all skill levels? Particularly at the lower skill levels here in Southern Nevada [because it has] less of an impact in Northern Nevada. It’s something that’s happening. There are studies that go all over the board on it—from 40 percent of the jobs in Southern Nevada lost, to up to 65 percent. Obviously, there’s a lot of in-between there but the point is, it’s going to have an impact. What are we doing about it? How are we preparing for it in both the private and public sectors? That’s something we’ve been looking at a lot.
Terri Sheridan: Even with manufacturing, whether it be general food production all the way up to advanced manufacturing, the machine technology doesn’t seem to ever really go away. Manufacturing is changing. Today’s manufacturing is not yesterday’s manufacturing. If we could open the youth’s eyes to different types of manufacturing and try to get them excited about it, [we can] try to help fill some of those gaps.
Restrepo: I was reading a new report from McKinsey Global Institute. The whole issue of automation is now moving up to the middle-skilled workers. It’s just not waiters, waitresses or cashiers. That’s where it starts, but it’s moving up to midskill workers. What are we going to do in that regard? A whole other issue comes into play. How is it going to affect age groups? How do you train older people to change? It gets complicated.
Cruz: I think one of the things that technology also does is open the doors for alternative labor pools that haven’t had a chance to compete in the labor market before. [There] is a new company in your district [and] their goal is to have almost half their workforce be people with disabilities. Technology empowers that. As we evolve, we have to get better at not only making sure we tap into that alternative labor pool of people with disabilities, but also the returning vets [and] people leaving the penal system. If you don’t provide a second pathway, it will never go away. It’s good for business to be able to provide alternative pathways for them. Those are some of the pools that we can take advantage of to fill this gap.
What is Education’s Role in Economic Development?
Kazmierski: Our education system is still not designed to produce the talent of the jobs that are coming. [It] is grossly underfunded. I know we would have some people argue that point, but how hard is it to say we should be at the national average for funding of education? I mean how high of a bar does that get? We’re not even willing to entertain that. We didn’t even take on SJR14 which could have helped us on education and policing. We’re not putting enough emphasis on the education side of the equation to get us where we need to go and that fourth industrial revolution of jobs is happening faster than people realize.
Peterson: The solution comes from many different sources. It has to be all aspects [including] improving K-12, higher education, training providers and continuing to recruit talented people from other markets. We’re the fastest growing state in the country. That gives us a competitive advantage when it comes to pulling talent into our market. We should capitalize on that. Further, I think one of the biggest opportunities that we can improve on is alignment. Even with our existing resources, we can plan them better and align them to the jobs of the future. [We are] launching a new program called “The Workforce Blueprint 2.0” with Workforce Connections and Metro Chamber designed to predict where we’re going to be in five years, the jobs and skill-sets we need. [The program would] then work our way backwards and align with our education and training providers to get there.
Sanchez: The other thing [we need] is pathways through our educational system that captures students as they’re moving through middle school into high school and subsequently into technical programs. [We need to] align those pathways with the industry strategically and thoughtfully.
What Advantages Does Nevada Offer Over the Competition?
Peterson: I think the structure of economic development in Nevada is a tremendous competitive advantage. There are roles for all the groups involved. Everybody does work together. You’ve got one system where cities, counties, the state and regional development authorities all work clients together. You’ve got workforce, education partners and the private sector engaged. It works pretty well. It doesn’t work that way in a lot of other states.
Jeff Brigger: Regulation is a big item. I think we’re still a relatively small state and when companies have issues that they need to work through it’s pretty easy to get decision makers on the phone [and] get those issues worked through pretty quickly. I don’t think you see that in some of our competitor states.
Ken Chapa: I was in the Bay Area about a month and a half ago and we’re starting to see those California companies not want to go out to Texas anymore. It’s a little bit too far for them now. There’s a culture shift. We’re starting to see those company’s ownership say, “Maybe we do need to look outside the state,” which is something that never happened before. There’s a sense of familiarity with Nevada that California has. We’re not a “foreign” location to them. When you say, “I’m going to pick up my business. I’m going to move it to Reno or move it to Henderson or [move it to] North Las Vegas,” the employees typically don’t pull out the torches and start screaming at the top of their lungs. It’s usually not intimidating to them. They know that they’re still kind of close to home. They know that they still [have] access to all the amenities that they are used to. They also know that it’s going to be more money for them because [there is] no income tax and [there is] a better cost of living for them. Generally, it’s an easier sell for those companies coming out west.
Sheridan: I had the opportunity to meet with a company just last week that had moved over here and relocated their corporate headquarters from California. The CFO was literally giddy with excitement to have been here. His wife could not be more happy with the house that they were able to get. They’ve been here a little over a year now and there’s no looking back. It’s amazing.
Kazmierski: We’re three hours away from the Bay Area. People don’t understand that. What I like to say is we’re as close to the San Francisco Bay Area Bridge as some people are from North Bay to South Bay. It can take you three hours to get there and it can take you three hours to get to Reno. We’re close in their traffic world because some of them commute two hours to get to work. They understand that, “Okay, if we do a satellite office in Northern Nevada,” you can go back and forth if you need to.
Sheridan: It’s speed to market. It’s just how quickly can we get it in business. We can appreciate being able to offer a self-certification and be able to just kind of cut out review time. When Amazon came in, they had their permit within 28 days, their walls were tilting in 30 more days and their building was done in 18 months. Speed to market is a huge incentive and then it’s just availability of product. I think we all are enjoying the benefit of that with the amount of building that’s happening again.
Kazmierski: Companies are most concerned about price. At the end of the day, the cost of doing business allows them to either be competitive or not competitive. We’re starting to see some of those companies come back here because of the transportation cost on the other end of the Pacific, because the labor over there is going up, because they need that speed to customer piece. We’re actually getting more in-sourcing as we maintain an environment that’s friendly to business.
How Should Nevada Prepare for the Future?
Restrepo: We have to be relentlessly pragmatic. We have to be really forward-looking, positive and optimistic but when there [are] challenges, let’s deal with them. Let’s not sweep them under the rug.
Sanchez: I’m very optimistic. I think that we have a very strong foundation to build from.
Chapa: We are not restricted by opportunity at all. We have some great leadership in place at the regional and the state levels. We are on everybody’s target list right now. It’s wide open.