Technology’s Role in Nevada’s Economy

This Nevada Business magazine article illustrates Nevada’s favorable business climate along with its tremendous talent is helping to foster growth within the tech industry. Not only have our traditional businesses (gaming, tourism, mining) expanded their tech footprint, but we are home to diversified businesses and incubators to expand the tech industry.

As Nevada grows in this space, business fundamentals must be maintained. Innovative business remains, at its core, business. As such, for new industries to flourish, they should take advantage of Nevada’s business friendly laws and work within our established business community to foster growth.

Read Technology’s Role In Nevada’s Economy By Jennifer Rachel Baumer – posted September 1st on Nevada Business magazine blog:

A diverse economy is stronger than one based on only one or two industries. Traditionally, Nevada’s economic foundations have depended on mining and travel, tourism and hospitality. When the last recession hit even the hospitality industry, a serious move to diversify the economy began.

“The biggest impetus that started everyone down the path of the new innovations and technologies or trying to develop new industries, is the recession,” said Zach Miles, associate vice president, Economic Development, University of Nevada, Las Vegas (UNLV). “Obviously supporting the industries that are here is important, but looking at a diverse set of companies or industries can bolster our main industry of hospitality and entertainment.”

Nevada’s technology industry itself is already diverse, which is one of its strengths. Dave Archer, CEO, Nevada Center for Entrepreneurship and Technology (NCET), an education and networking organization, has lived in San Francisco, Los Angeles and New York. It’s Reno where he’s found a tech industry without dominant sectors. “In Silicon Valley there’s the same kind of companies, or in Seattle, or Detroit. But come to Reno and you have a little bit of everything,” said Archer.

Uniquely Nevada
Ironic might not be the right word for it, but one of Nevada’s traditional industries is investing heavily in cutting edge technology. Casinos are moving into robotics, virtual and augmented reality and esports, online video game competitions played by professional players.

Casinos are also getting more into artificial intelligence (AI), said Debbie Banko, CEO, Link Technologies. Sometimes that’s automating processes to run autonomously, freeing up the person who once performed the tasks.

“On the commercial side, you’ve got robots delivering food and beverages to the hotel room and there are buttons that control the lights, the blinds and the radios. That’s all automation and some of it is generated by artificial intelligence,” Banko explained.

“What’s interesting about Nevada is, Nevada has existing industries, a lot of mining, a lot of manufacturing, a lot of hospitality, a lot of gaming. While we’re having a renaissance, growing tech momentum here and growing entrepreneurialism, we’re not growing into a Silicon Valley,” said Daniel Price, CEO, Breadware. “The ecosystem here is going to grow into a uniquely Ne – vada ecosystem where these new platform technologies are going to support and synergize with the existing and established Nevada industries. “

“Nevada’s technology industry is already pretty robust,” said Patrick Callihan, executive director of Tech Impact. Industries already present in Nevada tend to have a ton of IT jobs behind their doors and, more and more, every company relies on technology.

“I read an article recently from Barrick, the gold mining company, saying they have a shortage of IT people,” said Callihan. “I find that fascinating. We tend to think of IT as its own vertical but really it stretches across many types of business.”

“It seems like a lot of the businesses that are moving into Nevada, particularly the entrepreneurial and startup businesses that are moving in, have a tech focus,” said Price. “So there seems to be a momentum that’s being gained, based on the technology migration into Reno. I don’t know what percentage this is of the economy, I don’t know how rapidly it’s growing, but it seems to be drawing talent to Nevada, and that’s a good thing.”

New businesses aren’t just bringing new talent; they’re bringing new jobs and a demand for even more talent.

“Our workforce is growing. We are seeing it in the recruitment front even in creative digital performance,” said Jarrod Lopiccolo, CEO/co-founder, Noble Studios, a creative digital performance marketing agency. “About 20 percent of our candidates are looking to relocate to Reno, because they are looking for opportunities to grow professionally, they like the climate, and they have heard it’s a great place to live.”

Startups
Startup companies are locating and forming in Nevada due, in part, to the existence of the larger technology companies like Tesla and Panasonic that are creating an environment that fosters startups.

But can startup companies change Nevada’s tech industry? Yes and no, said Miles. They can definitely have an impact, but they need resources to survive and thrive.

“When you look at the East and West Coasts and the reasons why startups are either formed there or move there, it’s because you have a wealth of talent to help manage those startups,” said Miles. There’s more venture capital, more mentors, more entities they can sell to or merge with. “So you get this ecosystem within the area that supports startups,” he added.

Darik Volpa, CEO, Rehearsal, moved to Reno in 2003 from Boston and, before that, was in the Bay Area. So he’s had a chance to watch Reno’s tech industry develop.

“It’s getting easier to raise capital in Reno. There are more options, it’s a closer knit community, and you’ve got lots of folks really getting invested, making it far easier to raise money here than it has ever been. Not large amounts like in the Bay Area, but under a million.” Volpa is seeing higher quality startups with good traction, financial backing, impressive management teams, and customers.

Resources for startups are forming, like StartUpNV, a statewide organization that provides services to small businesses to help them with foundational documents, business plans and finding funding. It’s made up of seasoned entrepreneurs and veterans of other startups.

Another resource is University of Nevada, Reno’s InNEVation Center. Purposefully located off campus for accessibility, the center helps grow technology startup companies through their early phases of development.

“By help we mean, not just providing them with a desk and a place to work. [We also provide] access to mentors, introductions to capital and to people who help with the business process and give them a leg up in one of the most difficult phases of any business,” said James Sacherman, executive director.

“It’s nice to attract the Teslas and [other large tech companies], but it’s very interesting to see a small business which engages with a lot of those large companies and goes from 10 employees to 100 employees to 1,000 employees and the effect around them. The incidental jobs and other small businesses that want to be around them and are attracted to this state because of it,” said Sacherman.

By focusing too much on small businesses it’s possible, he said, to miss opportunities to bring in large entities that can foster certain types of outcomes. “So yes, startups can drive the economy, and yes, we are right in the midst of putting together all of the appropriate resources to support them and help them make that change in the community.“

In Southern Nevada, University of Nevada, Las Vegas (UNLV) is home to the Technology Assessment Committee (TAC), created in partnership with Las Vegas Global Economic Alliance (LVGEA) and Switch six years ago to create a single point of contact for economic development related activities at the University. One component of TAC is Black Fire Innovation, a public/private partnership between Caesars Entertainment Corporation and UNLV, meant to drive gaming and hospitality innovation.

Putting the Talent to Work
College of Southern Nevada (CSN) offers multiple degrees in three separate technology areas: a software degree that can have a concentration in programming with development or database; networking degrees which can concentrate in router/ switch technology, basically a Cisco degree with some security work added; and systems administration.

“And then there are the cybersecurity degrees,” said Margaret Taylor, chair, computer and information technology at CSN. There are degrees in digital forensics, network security, and a new degree in compliance.

“We went to the industry and everybody, [the consensus] was overwhelming, they couldn’t find compliance people,” said Taylor. Compliance involves making certain employees follow company guidelines and state and federal laws and regulations.

CSN doesn’t track its students after graduation regarding whether they find jobs, but many don’t graduate – they leave to take jobs in technology before they finish. One student was offered full-time work with a Texas company that flew her out to work on a network implementation project, flew her back to spend Fourth of July with her family, and flew her back to Texas.

When it comes to companies hiring talent, what isn’t homegrown has to found. “With all the growth, it’s getting more expensive and competitive to hire people,” said Volpa. “Housing is tough, rents are going up, it’s the downside to growth – it makes it more expensive for startups like me. Recruiters are calling people on my team every week. It’s good for the employee, but it makes it hard to grow a team.”

Banko started Link Technologies out of her home 18 years ago and now has branches in Colorado and Philadelphia along with Southern Nevada. The IT consulting firm works primarily in the area of security and project management, but also does systems integration and staff augmentation.

“You need leading, [cutting] edge types of contractors for hire even for companies like MGM and Caesars, and you can’t always find them in Las Vegas, so we’re responsible for relocating quite a few people here in the technology world,” said Banko. “I’ve seen the industry really grow and change and what we’re seeing now is huge from a casino standpoint and that trickles down to the schools, cities, state and county levels.”

One of the areas Nevada needs to recruit talent for is cyber security. There are between 1,700 and 2,000 jobs available, Taylor said. When CSN students open their own businesses, it’s often in cyber security. This trend is partly because the Internet of Things (IoT) is changing the footprint businesses and individuals leave online.

Internet of Things
“The more we’re connected to the internet, the more that we can be hacked,” said Taylor.

Internet-connected televisions listen all the time, not just when they receive commands. Digital assistants never sleep. Even smart refrigerators can be hacked, and smart doorbells can give away passwords along with entry to the house.

But just how does the IoT affect business? “At the highest level there’s really two types of Internet of Things products,” said Price. “There’s Internet of Things products built by businesses and then sold to their customers, and there’s connectivity on the products that provides new feature sets to the products and/or new revenue streams for the businesses selling the products.”

Those are the top line drivers of IoT. There’s also bottom line IoT type initiatives, incorporating connectivity and intelligence into manufacturing lines for more efficient manufacturing, or into HVAC systems for more efficient energy consumption, uses concerned with improving a business’s bottom line.

Either way, Price said, “If a business is incorporating the Internet of Things, they need to be very aware of the large cyber footprint they now occupy with all their connected devices.” They need to up their cyber security game.

“We’re working with businesses all around the globe and all around the U.S. that are building very innovative and novel products in the IoT space. We see most of our activity in one of four areas: smart cities, building automations, medical technology and sports technology.”

There are also uses of IoT connectivity that leave people wondering why – why would a dumpster be connected to the internet? But, smart dumpsters can send information to trash collection companies indicating whether or not they’re full, and help the company optimize driving routes.

With millennials on the cusp of becoming the largest adult population, they’re changing the playing field, said Lopiccolo. Millennials are used to living online, getting what they want now and they’re less interested in classic brands of products than they are in local brands. All of which points to companies ramping up their IoT game whether or not the need for additional cyber security accompanies the move.

Tech companies are moving to Nevada because we have a great power grid, great fiber network in Las Vegas, and great connectivity, said Taylor.

He added, “You can get to Vegas from almost anywhere with a straight shot or one stop because we’re Las Vegas. All of Nevada is really starting to pop, southern Nevada and northern Nevada, partly because of the low tax base and partly because of our lack of threats for taking out the system. Southern Nevada is one of the areas in the country least likely to be taken out by a man-made or natural disaster. If a tsunami hits Vegas, we’re all in trouble.”

“I don’t think any of us want [northern Nevada] to become another Silicon Valley,” said Lopiccolo. “Obviously the proximity means we can adopt talent and embrace companies from the world’s tech Mecca, and we should learn lessons from them. But, as always, Nevada’s going to do its own thing in its Nevada way. Maybe it’ll be Lithium Valley or Environmental Valley or Data Center Valley. Or maybe it’ll still just be good old Washoe Valley—it’s more real, has more sagebrush and way less taxes.”

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