|In Northern Nevada, the basic economic paradigm has literally changed in the space of half a decade.|
Nissim H. Ezekiel is actively engaged in attracting hi-tech companies to Nevada, particularly from Israel, through his new partnership at the Nevada Innovation Center LLC and the ongoing effort to create The Israel Innovation Center in Las Vegas.
Tesla established its Gigafactory outside of Reno in 2014.
The major downturn that affected Las Vegas and Nevada, most noticeably felt by its real estate market, following the global financial crisis of 2007-08, has experienced a steady recovery in both economic growth and employment over the past five years. More striking is the significant change in the structure of the economy, from one driven by tourism, mining and defense, to a major emphasis on hi-tech investments. None is more pronounced than that which began with Tesla’s decision in 2014 to locate its Gigafactory in Reno. Other major names have followed, including Apple, Amazon, and Switch - with its very visible presence in Las Vegas. In Northern Nevada, the basic economic paradigm has literally changed in the space of half a decade.
Here in Las Vegas and Southern Nevada, change is also evident, though the resort industry continues to dominate the headlines. The cities of Las Vegas and Henderson are each implementing their visions of a future driven increasingly by smart-city models and in making the region a showcase for new domestic and global technology. Very high profile, new resort projects, the forthcoming Las Vegas Raiders Stadium, the new Las Vegas Convention Center, and the work of the Regional Transportation Commission of Southern Nevada (RTC) will offer major opportunities to use technologies that will define the region and be visible to the diverse group of tourists and business people that are regular visitors to the region.
The Las Vegas Strip
|Start-up and small and medium-sized companies are the core of the economy in terms of their contribution to employment, economic dynamism, competition and innovation.|
The challenge for economic planners in facilitating a new hi-tech economy will be to create a model that is unique to the region. Silicon Valley cannot be replicated in Las Vegas – nor does it need to be. In the ongoing efforts that my partners and I are making to bring appropriate Israeli technology to Nevada, we have learned that Israel has a well demonstrated and successful approach to developing new technologies. This involves an active partnership between government and private entrepreneurs, and one which has addressed the “first mile” challenges facing new companies. This is the model that has led to Israel’s reputation as the Start-Up Nation. Essentially, entrepreneurs with investment from family and friends begin to develop a new idea, and this initial capital is supplemented by an infusion of critical seed money from the Israel Innovation Authority at the appropriate time. Additional risk capital is then put into play by Israeli and global investors and venture capital firms.
The site of the new Raiders Stadium in Las Vegas.
The partnerships that will be required here in Vegas will also involve governments (both state and local), academia, the private sector and non-profits. However, direct funding of new companies through capital subsidies, cash grants and other mechanisms – such as in Israel – is not the Nevada model. That scenario relies on an unrealistic expectation of surplus resources in government budgets. Rather, a sustainable model will build on the unique features of the local economy, which includes a relatively low-cost structure and a supportive regulatory environment. Most importantly, Las Vegas will continually offer the opportunity to showcase new technologies to a global audience – and hence makes the region an attractive base for hi-tech companies to locate and to be actively associated with the major new investments that dot the local landscape. Large, established companies will always be attracted to the market. However, start-up and small and medium-sized companies are the core of the economy in terms of their contribution to employment, economic dynamism, competition and innovation. They will continue to need the targeted policy and operational support of all the major players in the region – government, private and academic – to ensure the economic transformation that is underway becomes self-sustaining.
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