Tesla’s Gigafactory is a Giga-Opportunity for Nevada

Nevada Gov. Brian Sandoval looked pretty happy yesterday when he announced that Tesla Motors had chosen Reno as the site for its proposed $5 billion “Gigafactory” battery plant and its 6,500 high-tech manufacturing jobs. As well he might: While the $1.3 billion potential cost of the state’s attraction package could haunt the state, the win is clearly huge.

So what now? Nevadans have a right to gloat for, oh, maybe a day or two (or a week!)—but then get to work fully leveraging the opportunity. To do that, the state should think urgently about how to boot-strap its present good fortune into permanent, self-perpetuating and broader advantage in advanced industries. Here are three strategies:

Pile onto workforce training and education.

The first priority for Nevada has to be: Train, train, train and educate, educate, educate. By all reports, the Tesla plant is going to require thousands of “middle skill” assembly workers, operators, and maintenance technicians as well as hundreds of engineers and technical supervisors. That will be welcome to a state that was hammered during the crisis. And the great news is that many of the jobs will be accessible to the state’s high school and community college graduates. However, the numbers involved alone will challenge Nevada, as will the state’s relatively thin cadre of STEM-skilled workers. Given that, the state and its regions should use the Gigafactory’s arrival to kick-start a major workforce training and STEM education campaign aimed at turning the urgency of near-term hiring needs into a longer-term habit of preparation—not just in Reno but statewide. At the center of this push should be a statewide push to promote the importance of STEM skills-building aligned to the specific needs of the state’s industries. Such a push would do more than anything else to convert the Tesla opportunity into a lasting sea change that truly helps diversify the state economy and reduce its overreliance on the recession-hammered gaming and real estate industries. 

Build the ecosystem.

Nearly as important as building a superb STEM-trained skills base in Nevada is the need to build up the state’s regional industrial ecosystems. The arrival of the Gigafactory will bring with it a need for numerous suppliers and service providers, new and existing. Those firms can then—if nurtured—emerge as the base of a denser industrial ecosystem in Nevada that will yield further opportunities in other industries. To the extent, then, that the state and its regions help foster the emergence of vibrant, varied and nimble industrial clusters they will make the most of the coming Tesla supply chain.

Commit to innovation.

Finally, the state should seize this moment to set a platform for higher-value growth in Nevada through technology-development and innovation. Innovation, after all, remains the only lasting source of advantage both for high-value firms and high-wage locations. However, Nevada—as a 2011 economic development strategy developed by the Metro Program, Brookings Mountain West and SRI International noted—has much work to do to construct a serious presence in technology-based economic development. Significant investment in the university system’s research and technology programs is going to be essential if the state is going to boot-strap true technology competitiveness. So are investments in “impact scholars” and university-industry research and technology collaborations. Only in that way will the state build the kind of synergistic R&D relationships with Tesla, its suppliers and future tech arrivals.

The bottom line: Nevada—a state that has suffered mightily since the crisis—has worked hard to secure a huge opportunity to improve its economy for the long haul. Now it should turn to building lasting advantage.