A-New-Economic-Agenda-for-Nevada-Summary-Report

A New Economic Agenda for Nevada:Summary Report December 21, 2018 Prepared for: Nevada Governor’s Office of Economic Development Prepared by: Roland Stephen, Director Center for Inno

A New Economic Agenda for Nevada:

Summary Report

December 21, 2018

Prepared for:

Nevada Governor’s Office of Economic

Development

Prepared by:

Roland Stephen, Director Center for Innovation Strategy and Policy SRI International

Center for Innovation Strategy and Policy

Photo Courtesy of Sydney Martinez/TravelNevada

Summary Report

Nevada’s economy has become more diverse since

2011, but high-wage jobs in new sectors still need to be effectively targeted

Nevada’s economic

output and level of

unemployment have

recovered completely

from the Great

Recession

Nevada added

285,000

jobs since 2010.

Project Background

The Great Recession hit Nevada harder than almost any other state To meet this challenge, the

Governor of Nevada asked SRI International (SRI) and the Brookings Institution (Brookings) to

conduct a rigorous, objective analysis of Nevada’s challenges and to identify key opportunities for

economic development and job creation The SRI/Brookings team concluded that Nevada needed

to diversify its economy, upgrade the economic development system, pursue smart strategies

adapted to each region, and emphasize innovation and new enterprise

Seven years later, the Governor’s Office of Economic Development (GOED) asked SRI’s Center for

Innovation Strategy and Policy to revisit Nevada’s economic development agenda This report

represents SRI’s findings and recommendations It includes a scorecard on progress, an analysis of

Nevada’s current assets (including industry base, workforce mix, innovation ecosystem, and

economic development policies and programs), and a new set of strategic directions for the future

Report Methodology

Nevada’s economic output and level of unemployment have recovered completely from the Great

Recession Nevada ranks in the middle of its peers in terms of overall recovery from the Great Recession, but with signs of characteristic economic dynamism associated with increased population and job

growth

Peer State Rankings

Nevada’s two largest metropolitan regions (Reno-Sparks and Las Vegas) grew at an average annual rate

of 2.56% and 2.15%, respectively, between 2011 and 2017 Boise, Phoenix, Sacramento, and Salt Lake City grew at a very similar rate to Las Vegas and Reno-Sparks, with only Denver growing significantly faster At an aggregate level, the recovery among large metropolitan areas in the Mountain West and Southwest looks quite similar

State

Percent Change

in GDP 2011-2017

Percent Change

in Population 2011-2017

Decline in Unemployment Rate 2011-2017

Workforce Participation Rate

2017

Overview & Scorecard

Overview

The SRI team’s analysis and findings began with a comprehensive overview and scorecard for the

development of Nevada’s economy from 2010 to 2018, including Nevada’s three metropolitan areas and six micropolitan areas (smaller towns with 10,000 to 50,000 people) SRI then reviewed Nevada’s industry base and talent and workforce mix using a comprehensive dataset that integrates economic and workforce data SRI also conducted an analysis of the state’s innovation and entrepreneurship ecosystem

These analyses, combined with stakeholder interviews, formed the basis for an asset map for the state and its regions Based on this map, the research team analyzed the strengths, weaknesses, opportunities, and threats (SWOT) for the state, and formulated strategies and actions for the state based on what the analysis revealed

Peer Metropolitan Area Rankings

In the years following the Great Recession, most of Nevada’s micropolitan regions have experienced a complete recovery with approximately the same level of unemployment that they had in 2007 Relative

to other micropolitan regions in the area, Nevada’s micropolitan areas were hit harder by the Great

Recession but also recovered better than other regions

SRI conducted over 140 interviews with key stakeholders in community and

economic development, business and industry, academic research, and

workforce development across the state to enrich the team’s understanding

of Nevada’s assets All interviews were conducted in person (either

individually or as part of a stakeholder engagement session) or over the

phone Support for these interviews was provided by GOED and each of the

regional development authorities (RDAs) throughout the state

Metropolitan Area

Percent Change in GDP 2011-2017

Percent Change in Population 2011-2017

Decline in Unemployment Rate 2011-2017

Workforce Participation Rate

2017

Denver Aurora

Las Vegas Paradise,

Phoenix Mesa

Portland Vancouver

Sacramento Roseville

Stakeholder Interviews

SRI conducted

140

stakeholder interviews for this report.

Nevada has begun the transition away from its dependence on hospitality, gaming, and entertainment While these activities will continue to remain important, the figure below shows how employment in other sectors has grown much more quickly in other, targeted sectors over the course of the recovery from the recession

Percent Change in Number of Jobs for Select Sectors in Nevada’s Economy Between 2011 and 2017 Source: EMSI

However, while Nevada’s economy has been successful in diversifying broadly (away from concentration

in tourism, gaming, and entertainment, for example), diversification may still be concentrated in lower-wage sub-sectors

Nevada must provide opportunities for skill development and workforce training for workers with lower levels of formal educational credentials or education This is important to ensure that these often

enterprising and hardworking workers are not discouraged from participating in the labor force and have opportunities for growth

Targeting Specific Industries, Occupations, and Skills

Nevada’s enterprising spirit, the fruit of its historically high level of in-migration, remains strong

However, the state’s innovation system is characterized by a general lack of coordination and alignment among the various actors and programs that support entrepreneurship statewide

University R&D Outputs, 2017 (ordered by total research expenditures)

Source: Association of University Technology Managers (AUTM)

Under-graduates graduates

Post-Total Research Expenditures

Total Licenses Executed

Gross Licensing Income Disclosures Invention Applications Patent Startups Initiated

Univ of

University of Nevada,

University of Nevada,

Nevada’s Innovation Ecosystem

Asset Map: Nevada

Nevada’s Regions

Nevada’s regions are each unique and have different assets Las Vegas is internationally known for its

high-quality tourism, gaming, and entertainment industry Reno-Sparks has a broad array of outdoor recreation

opportunities and has become home to a number of advanced manufacturing companies in recent years

Though small in terms of population, the micropolitan areas that are found throughout the state of Nevada

play important roles in the state’s economy Smaller towns like Elko and Winnemucca have benefited from

long-standing, well-established industries such as mining The full report provides a detailed account of

assets for the metropolitan and micropolitan regions in Nevada

A SWOT analysis enables organizations to assess their current capabilities and understand how to work with them in order to navigate future uncertainty This powerful analysis serves as the basis for strategy

by highlighting sources of strength and weakness that may be addressed, opportunities to be realized, and dangers and difficulties to be avoided The SWOT analysis summarized below provides the basis

upon which the SRI team formulated strategies for the future

SWOT Analysis

The SRI team has identified three broad strategic directions—collaborate, innovate, and refine—that address the challenges identified in this report In addition, SRI has identified a set of recommendations for the renewal of the Nevada System of Higher Education (NSHE) More details on resources required (cost and timeline), potential collaborators, and sample milestones and metrics can be found in the Strategic Directions section of the full report

Strategic Directions

SRI is one of the world’s most diverse,

independent, non-profit research and

development (R&D) organizations, working on

some of the most important global problems

Its research and innovations have led to new

industries and products that affect people’s

lives every day—from the computer mouse

and interactive computing to medical

ultrasound, cancer drugs, and much more

SRI's Center for Innovation Strategy and Policy

helps organizations, regions, and countries

achieve long-term economic and social

outcomes through effective investments in

science, technology, and innovation Based in

Washington D.C., the Center is staffed with

experienced professionals who conduct

research, analysis, and strategic planning for

private and public sector clients around the

world

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