Governor’s plans: Big employment growth, careful accountability | TahoeDailyTribune.com

Governor’s plans: Big employment growth, careful accountability

John Seelmeyer
Northern Nevada Business Weekly

RENO, Nev. – Speaking into television cameras jammed into an auditorium at the University of Nevada, Reno, last week, Gov. Brian Sandoval said his administration seeks to create 50,000 new jobs in the state by the end of 2014.

It was a perfect-sized sound bite to accompany footage of the governor as he moved on to tour the growing operations of Pacific Cheese in Reno’s South Meadows industrial area.

But only briefly did the governor or Steve Hill, executive director of the Governor’s Office of Economic Development, address how they will hold the state government accountable to meeting that goal.

For those details, readers of the state’s 64-page plan for economic development needed to turn to page 60, where the accountability standards are laid out in detail.

The creation of 50,000 jobs would take a fair-sized bite out of unemployment in the state. With the total number of jobless estimated at 166,300 statewide in December, the 50,000 new jobs would reduce unemployment by about 30 percent.

Existing companies in Nevada will account for the largest share of those new jobs, Hill says.

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While recruitment of new employers to the state creates big headlines, Hill notes that recruitment typically accounts for only about 7 percent of job creation. The other 93 percent comes one or two jobs at a time as existing companies grow and launch new operations.

Job growth is only one of five statistical measures that the Office of Economic Development will track as they measure progress.

The other four include:

-The number of new businesses that are formed in the state.

-The growth in wages and salaries paid by employers in Nevada.

-The economic impact of business relocations and expansions, a figure that can be developed through sophisticated software currently in place at economic-development agencies.

-The state’s share of the national economic pie.

The Office of Economic Development plans an annual report – probably each November – on its progress, and the state also plans to develop an online dashboard that can be accessed by the state’s residents.

In some instances, the state’s plan acknowledges that no one is collecting the data it needs to measure the success of economic development.

Among the topics that it wants to follow, the Office of Economic Development says, are spending on research and development, efforts on business recruitment and retention, exports and the skills of the state’s labor force.

However success is measured, Sandoval says the goal of 50,000 new jobs needs to be approached one bit at a time, whether it’s the creation of 500 technology jobs in Reno or a handful of new positions in a rural community.

“Nothing is too small,” the governor said. “None is insignificant.”

The role of state government, he said, will be creation of a good infrastructure for business growth, education of a skilled workforce and advocacy for the interests of the state’s employers.

But most of the success will be driven by the private sector, and much of the organization of economic-development efforts will be regional, rather than statewide.

Among the jobs to be handled by business leaders will be identification of missing links in their supply chains and mentoring of entrepreneurs.

The private sector also will play key roles in finding commercial applications for research discoveries at colleges and universities in the state and will build much of the physical infrastructure that’s needed for the economic recovery.

During the next year, economic development officials want to capitalize on what they consider some near-term opportunities to build new employment. Among the targeted sectors: E-commerce fulfillment operations, customer-service and back-office operations, manufacturing and national defense research.

At the same time, they expect to get a handle on the existing companies in sectors targeted for growth, develop an inventory of unused or under-used facilities in the state, develop marketing plans and begin developing teams to lead the economic development effort.

Already, the state’s economic development plan notes that Nevada has some solid ground upon which it rebuild its economy. Among them:

– A strong and growing export sector. (Nevada leads the nation in export growth.)

– A strong mining sector.

– A significant presence in national defense.

– A tourism industry that draws more than 40 million visitors a year. On the other hand, the state plan draws upon Brooking Institute research that acknowledges Nevada faces some big challenges.

Its economy, for instance, has been based largely on consumption-oriented sectors such as tourism, gaming and construction.

The state’s workforce isn’t sufficiently trained to fill some of the vacancies that exist even today, the plan says.

Further, the plans says venture capital and innovation are sparse, energy costs are higher than most neighboring states, and the state suffers from an image that doesn’t accurately reflect the opportunities that are available in the state.