By Anne Cosgrove
From the September / October 2023 Issue
In Nevada, there’s a focus on growing the economy in an intentional fashion, and with a proactive approach there’s a transformation in the works. The Silver State offers a low-regulation environment, streamlined licensing and approval processes, a favorable tax environment for business and industry, and strategic location and transportation assets.
Business Facilities (BF) recently spoke with Nevada Governor Joe Lombardo about the business climate in his state and the latest developments.
BF: Please tell us about the current business climate in Nevada. What are recent achievements, and what is driving its success?
Gov. Lombardo: Your publication Business Facilities just ranked Nevada as having the eighth best business climate in the U.S. According to the Tax Foundation, in 2023 Nevada had the seventh best business tax climate in the U.S. In my inaugural State of the State address, I declared Nevada “open for business” and additionally announced a new $3.6 billion investment from Tesla into the state. Nevada is an attractive place to land and grow due to a variety of factors including proximity to California’s large market, lower cost of living, business-friendly governance, and innovative spirit.
BF: What are target industries for Nevada? Would you highlight a few projects that have chosen the state for their business?
“Nevada will be a global leader in the development and utilization of clean energy innovations.”
— Governor Joe Lombardo
Gov. Lombardo: Nevada’s target industries are Advanced Manufacturing, Transportation & Logistics, Natural Resources & Technologies, Information Technology, and Hospitality, Tourism, and Sports and Creative Industries.
The major economic development story in Nevada over the past decade has transpired at the Tahoe Reno Industrial Center where Tesla, Panasonic, Redwood Materials, Google, and Switch, to mention a few, have invested billions of dollars and created tens of thousands of jobs.
BF: What incentives or programs are being emphasized for retention of businesses and to encourage others to come to the state?
Gov. Lombardo: The State of Nevada, through GOED [Governor’s Office of Economic Development], offers a variety of incentives, including sales tax abatements on capital equipment purchases, sales and use tax deferral on capital equipment purchases, abatements on personal and modified business taxes, real property tax abatements for recycling, assistance with the cost of intellectual property development, and employee training grants. The State offers abatements on aviation parts and data centers, as well.
BF: How is the manufacturing sector playing a role in the diversification of Nevada’s economy? We see the state growing the sector in several ways, including the construction of the Center of Excellence in Henderson, NV, for example.
Gov. Lombardo: By positioning itself as a business friendly, logistically attractive, low tax, and low regulatory climate, Nevada has seen significant growth in manufacturing. The availability of industrial parks and lower energy costs has also been a contributing factor. The state is now home to well-known manufacturing operations that did not exist within the state a decade ago at GOED’s inception.
There has been significant activity in the lithium, electric vehicle, E-mobility, aerospace and defense, and other advanced manufacturing sectors. This has enabled the state to attract quality employers and job creation and contributed to economic diversity and resilience.
The [Debra March] Center of Excellence and other numerous statewide educational and workforce program investments serve as proactive initiatives to address the workforce needs of Nevada’s growing manufacturing sector. The state and its municipal partners realize the importance of creating and fostering a skilled workforce for current and future manufacturing sector growth in the state. The center [located in Henderson, NV] is a public-private ecosystem connecting industrial, educational, and governmental stakeholders to ensure a strategically aligned talent pipeline.
Additional programs within the state also serve to address Nevada’s growing industry workforce needs. To date, GOED’s Workforce Innovations for a New Nevada (WINN) program in coordination with Nevada System of Higher Education (NSHE), the Governor’s Office of Workforce Innovations (GOWINN), the Department of Employment, Training and Rehabilitation (DETR), and the Nevada Department of Education DOE) have worked together to develop and implement training/education programs aligned with the needs of growing sectors. To date, WINN has made more than $19 million in strategic investments to enable accelerated on-ramps and talent pipelines.
Half of incentivized companies since GOED’s inception have been manufacturers. From 2012 through 2022, manufacturing jobs in Nevada increased by 61%, while overall employment in the state grew 26%.
BF: Energy is a growing focus for relocating and expanding companies. How does energy, and transition around energy, fit into your Plan for Nevada?
Gov. Lombardo: Energy is a critical factor in the plan GOED released earlier this year. GOED’s vision is a vibrant, innovative, and sustainable economy with high-paying jobs for Nevadans. This economic future will be realized by pursuing clean energy, strengthening innovative ecosystems, and bolstering critical infrastructure. Nevada will be a global leader in the development and utilization of clean energy innovations. It will capitalize on its strengths and export innovative processes and products in mining and production of batteries and solar energy to new global markets supported by a robust, statewide electric vehicle (EV) and energy storage infrastructure.
Nevada will be ground zero for the energy transition. Nevada’s economy will be supported by a thriving innovation ecosystem that builds on state assets, history, and culture, and strengthened by collaboration between academia, industry, and government. It will engage a workforce with technical skills at all levels, attract a diverse portfolio of investments, and develop and commercialize world-changing new ideas.
Nevada will lead on next generation infrastructure that connects industries and businesses within the state to accelerate new economic opportunities. The state will capitalize on its strengths and enhance its connectivity efforts by updating multimodal inland ports and industrial parks, adding new rail links, and expanding broadband infrastructure. Nevada will make investments as necessary to convert its unique geographic locations in the northern and southern regions into connected hubs for reshored supply chains and digital networks.
BF: The environment, including water resources, represent a growing concern. How does your Plan for Nevada address these issues?
Gov. Lombardo: GOED’s state plan recognizes that overall demand for water will rise as Nevada plans to focus on batteries, renewable energy, and other green technologies, and therefore, the importance of prioritizing climate change-induced water shortages. Southern Nevada has done an effective job responding to the drought through water conservation.
However, the state continues its focus on accelerating the development and application of new, innovative smart infrastructures and technologies to scale water conservation efforts. GOED’s strategic plan identifies the opportunities to address the water scarcity issue as well as to support growth of the water technologies sector, by introducing specific water technology development programs in partnership with the southern Nevada Water Authority (SNWA) to help innovative companies and startups develop, test, and commercialize new water-smart related technologies.
With a robust transportation system already in place, Nevada focuses on low emissions and utilizing natural resources. Read more…
Recently, WaterStart, a global water technology accelerator based in Henderson, announced a first-in-the-nation approach to integrate water consumption into economic development planning and incentives in Nevada. This initiative, funded by GOED puts optimizing future water consumption at the forefront of the state’s economic development efforts, an essential component to sustaining economic growth in an increasingly arid West.
BF: What are the other key issues facing the state?
Gov. Lombardo: The obvious challenge is diversifying Nevada’s economy which has been dominated by historically successful hospitality, gaming, and leisure sectors. Las Vegas has a global brand, but recent manufacturing success in the Reno area has become a blueprint for success throughout the state. The Las Vegas economy accounts for the vast majority of Nevada’s economy but we need to be strategic about the kinds of industry to attract due to challenges being a fast-growing metropolitan area in an arid desert.