Ones and Zeros -High Tech in Nevada Gets Mixed Reviews

Nevada’s development authorities say our state is the best place in the country to start a business. But what kind of business? The Bureau of Labor Statistics says the industries with the fastest-growing wages and employment are technology-based. Are these businesses coming to Nevada, staying here and flourishing?

Jessica Groach

http://www.nevadabusiness.com/current/feature2.html

(Thanks to Headwaters News http://www.headwatersnews.org for passing this along- Russ)

Problems to be Solved

The Milken Institute, an economic think tank, released its State Technology and Science Index in March. Surprisingly, Nevada’s numbers were low compared to the rest of the country. The Silver State ranked 43rd in the country – down from 42nd in 2002 – in the technology and science-based industries category. And it ranked a dismal 50th for technology and science workforce concentration. Is Nevada as business-friendly as it claims to be?

Alison Estee, co-founder and managing director of the Center for Entrepreneurship and Technology (CET) isn’t so sure. The CET, created in 2003, is a statewide agency working to support Nevada’s entrepreneurs and businesses owners in technology and high-growth industries.

The CET spoke with the state’s top 10 entrepreneurs about what issues they face in starting a business here. “We learned that while Nevada prides itself on being business-friendly, really the entrepreneurs here are fending for themselves,” said Estee. “In other states, you walk into one office, and you walk out with your permit, a business loan and three options for office space. Here, it’s not so easy. Entrepreneurs are very efficient people. They don’t want to be told to walk three blocks and wait in line.”

Inconvenience is just one problem the CET uncovered. Nevada currently has no statewide directory that lists who is doing business in our state. “That seems so simple,” said Estee, “but if you wanted to go scan for clients, you wouldn’t know where to start.”

Estee is also concerned about Nevada’s image problem. The Nevada Development Authority’s recent marketing strategy promotes Southern Nevada as the antidote to California’s problems, which include high income taxes, high workers’ compensation rates, high utility rates and high health insurance coverage. With a background in marketing, Estee disagrees with this strategy. “At some point it will be really nice for Nevada to stand on its own two feet and proclaim who we are, why we’re good, and why businesses should be based here, instead of just saying, ‘We’re the cheapest product on the shelf, so buy us,’” she stated.

Dave LaPlante is a board member for the CET, as well as CEO of Reno’s Twelve Horses, a company that provides email and Web-based marketing and business automation services. LaPlante says Nevada’s small population is a primary factor affecting growth. “Without critical mass, you’re not going to have start-ups. Silicon Valley bred its own entrepreneurism,” said LaPlante. “When a company gets big, a lot of very smart people get frustrated climbing the corporate ladder. They come up with their own ideas and decide to go start their own company. Now you’ve got your next big company and the cycle repeats itself. Nevada hasn’t had the opportunity yet to enjoy that cycle.”
According to CET members, if Nevada wants to grow its technology-based businesses, the state’s officials need to make it a priority with adequate funding. Scott Frost, a member of CET’s board, is past-chair and co-founder of the Technology Business Alliance of Nevada (TBAN). He has been deeply involved in Nevada’s efforts to lure technology businesses here.

“We are so far behind everyone else,” said Frost. “Nevada has yet to embrace efforts to attract entrepreneurs.” Frost said that when comparing dollars set aside for such efforts in other states, Nevada pales in comparison, and that the preoccupation with gaming may be a detriment. With Indian gaming putting a pinch on Nevada’s casinos, it’s clear to the CET that there needs to be more economic diversity. “It’s telltale about where our priorities lie,” noted Frost. “I’m not saying, ‘Just throw money at it.’ You have to dedicate manpower and resources to make it happen.”

Fellow CET board member Bob Goff, a venture capitalist from Silicon Valley, works every day to lure tech companies to Nevada. He agreed with Frost. “Gaming, mining and resort industries have traditionally dominated our landscape. There needs to be more emphasis on technology as a diversification strategy in our economy.”

Positive Solutions
The good news is that the CET is addressing these issues. It starts with “Nevada’s Innovation Roadmap.” The “Roadmap” is a project headed up by Estee and Goff. The idea resembles a marketing plan, and enables the CET to chart its progress, both short-term and long-term, in technology growth.

The CET’s new website, cetnv.com, will serve as a “one-stop shop” for new business owners in Nevada. It provides networking information, administrative procedures for starting a business and tips on training, funding and office space. Additionally, the CET is creating a “one-sheet” for starting a business, including which offices to visit and what paperwork to bring, to increase efficiency. And to aid in networking, its staff is working on a statewide business directory, which will list all Nevada companies, providing the ability to search by type or name of business. In addition, it will implement Educate 2005, a program to educate legislators on such issues as privacy laws, intellectual-property laws and other important factors that affect technology and innovation in our state.
In the private sector, people like Frost and Goff contribute to establishing these businesses. TBAN, which Frost helped create, assists with legislative issues, promotes awareness of technology-based businesses through networking, and addresses common issues for business owners. TBAN spawned the Vegas Valley Angels, a group that creates start-up funding for new businesses in the Las Vegas area. Similarly, in 1997, Goff formed the Sierra Angels, a venture capital funding group focusing on Northern Nevada, Lake Tahoe and the I-80 corridor. The Sierra Angels provides seed funding, coaching for professional development and connectivity to others in the business community. Organizations like these are seeing to it that new businesses in Nevada succeed and thrive, and many do believe they are thriving.

“It’s a great business climate here,” said Goff. “There’s a tremendous number of innovative people here. We’ve got business-friendly tax policies, superior quality of life, good housing costs, short commute times and great recreation. We’re capable of a lot, but the dots aren’t quite connected. I think what the CET is doing will connect those dots.”

“Nevada is an independent, progressive state,” said Frost. “If we put our minds to it, we can do anything.”

An Educated Workforce?
Is the complaint that Nevada’s workforce isn’t educated a valid one? Estee and her CET colleagues don’t believe so. They say it’s not fair to compare Nevada to places like California, Massachusetts or Illinois, where many colleges and universities are located within miles of each other. In addition, most technology businesses, such as Dave LaPlante’s Twelve Horses, recruit the top minds from around the country, not just from one area.
“No, Nevada doesn’t have as much of an educated workforce as those in the immediate vicinity of Stanford. We all agree on that,” noted LaPlante. “But you shouldn’t say Nevada’s workforce isn’t educated, because you’re comparing apples and oranges.” LaPlante has hired many interns from the Nevada university system who have worked their way up to management.

He added that lack of qualification is by no means a Nevada problem. “Technology companies are typically on the cutting edge, so a lot of the skills required may not even be in a textbook yet. You could point to any school out there that struggles with that. We see great programmers all the time who can program six ways to Sunday, but they lack some basic skills like writing and socialization. I can’t believe how many résumés I get with no cover letter, coming out of Stanford or any of those schools.”

Nevada is taking steps to better prepare its workforce. At the University of Nevada-Reno, a new advisory board is improving the curriculum. The school’s Corporate Partners program, initiated last fall by a former Microsoft executive, will work to tighten the link between schools and businesses, so students may be better prepared for their careers.

Beyond state universities there are other improvements: Students at the junior high level are learning basic IT skills. North Face University, a fully-accredited, four-year software engineering school, will soon open its newest campus in Reno. And Sierra Nevada College has a groundbreaking Entertainment Gaming program, which merges gaming with new technology.

Connecting the Dots
Will Nevada’s technology sector grow? “If we left it alone, it would slowly percolate and grow,” said Frost. He pointed out that companies like Microsoft, Cisco Systems, IGT and others have already employed thousands of Nevadans and boosted the economy. “Right now, we have a window, and we should take advantage. These businesses create lots of high-paying jobs. So let’s do more.”

“Nevada’s a great place to do business,” said Alison Estee. “And hopefully in five or 10 years we’ll be up a little bit in all these numbers. We’ll be making progress, embracing the growth that’s going on around us. It’s a bipartisan issue; everyone should be interested in promoting science and technology throughout our state. It’s not a negative thing, anyway you slice it.”

© 2004 Nevada Business Journal (A Division of Business Link, LLC