Dispatches from the road: Lake Tahoe, NV

I am finishing up a few days visit with my brother in Nevada. I have mentioned him before in the blog. I have gotten a chance to get to know this state a lot better – this time around.

Here’s a message that we saw on the door of the local bank:

I have determined that Nevada must be one of the places with the least amount of ‘law’ and ‘government’ in the world. In this state, just about anyone can buy and carry around a handgun (provided you leave it in your truck when you go into the bank, please). Ordinary people walk around with a gun on their hip the way you might wear a cell phone. On your own land, you can hunt and fish at your pleasure – any amount – anytime of the year (I am told). Prostitution is legal. Gambling widespread. The spead limit is 70 and 75 miles per hour in some places.

The last frontier. The true wild west.

It’s certainly no nirvana. There are significant drug usage problems and I see the governor is being investigated for corruption.

But it’s a beautiful and fascinating place. We went from a high desert to a deep lush evergreen forest in a 20 minute drive. We drove out of 25 degree weather into snow and great skiiing.

But I, being me, was more interested in the economic development environment and did some considerable poking around in this area.

My brother made an unprompted but interesting comment. He said that he went from living in a ‘culture of entitlement’ (the Miramichi) to a ‘culture of anti-entitlement’. In Nevada, he says, you can make a great life – but you’ll have to earn it. Engrained in the culture is a suspicion of government – even among government officials. Welfare programs are among the least lucrative in the country but at the same time, the area is booming with new wealth and attracting investment and entrepreneurs from the whole southwest region of the USA.

Attracting Entrepreneurs
Another interesting finding for me was that the state is attracting entrepreneurs – primarily from California but other areas as well. This is an interesting economic development issue. In a place like New Brunswick we try to ‘nurture’ local entrepreneurs and attract ‘outside’ investment (existing, mostly large scale firms looking to build another plant or call centre, etc.).

However, here, many of the top entrepreneurs (successful ‘local’ businesses) came to the state from outside. There were examples in the local newspaper of people moving here, setting up successful businesses in a wide variety of industries – serving regional and national markets.

It might be interesting for a place like New Brunswick to try and ‘attract’ entrepreneurs and their ideas and investment. People with great ideas looking to start new businesses. People needing access to R&D support for a great new idea. People looking to locate in a region with a low cost of living (i.e. Nevada relative to California).

I could be wrong but I think many of our ‘entrepreneur’ support programs require the person to first be located in New Brunswick. Even if this is not the case, I don’t think I have ever seen an economic development agency in the Maritimes actually promoting their province/community to external entrepreneurs (i.e. either new start ups or entrepreneurs with a great idea).

I think this could be a great idea. Promote New Brunswick as a great place to start a business – not promoted at New Brunswickers – but at Ontarioians, Americans, immigrants.

Cream skimming
Another interesting economic development trend in this area particularly (Greater Reno) has been the ability of the region to attract industry out of California that California doesn’t particularly want – or at least seem to want. There is a large and growing distribution hub here (Amazon, Dell, etc.) serving California markets from here and attracting firms with specific tax programs. Of course, there is the gambling industry here that does not exist in California. I am no fan of gambling but there is no state income tax or sales tax – because the revenue comes mostly from gambling. The region is also promoting cheaper housing and attracting retirees and business people to move here.

I am convinced that New Brunswick should be able to find a few high growth, good wage industries that it could carve out a niche – and compete and win against larger urban centres in North America. Industries like data centres, animation/games development, e-Learning. I just heard that NSBI is going after ‘legal’ outsourcing. Attracting high paying back office legal jobs – jobs which are getting very expensive to do in the large urban centres.

I’ll close on this issue of ‘entitlement’. As Morrissey says “England is mine and she owes me a living. Ask me why and I’ll spit in your eye”.

I think, in Canada, a key differentiation has been efforts to build a social safety net. A system that takes care of those who are the most needy in society. Trying to ensure that as few people as possible are ‘left behind’ so to speak.

But it is vitally important for government and community efforts not to dampen too much the importance of work ethic. Of ambition. Of the desire to better ones self through education and ongoing learning. And yes, to put disincentives in place that encourage people not to better their ‘lot in life’.

We need to find a better balance, I would think, in New Brunswick. Despite large Equalization and an EI program that is among the most aggressive in the OECD, we still have one of the highest rates of people living below the poverty line. Our population has one of the lowest rates of university education in the 60 US states and Canadian provinces and our standard of living (admittedly measured only in economic terms) has been rated, again in the bottom three of the 60 states and provinces.

You can’t substitute real economic develpment with government spending. As you know, our dependence on Equalization grows every year (and soon will pass PEI on a per capita basis) and we are seeing an accelerated rate of out-migration of our people. I believe that the fact many Acadians want to stay in New Brunswick (read: Moncton/Dieppe) has been a limiting factor on even larger rates of out-migration.

I am certainly not saying we empose a ‘Nevada’ culture and economic/political system on New Brunswick. But we shouldn’t be afraid to learn some lessons from other places. We shouldn’t shy away and hide behind some notion of Canada as a social and economic nirvana. In 2002, the OECD said in a brief that one of the top issues that could imperil Canada’s long term economic health was the lack of successful regional development. The OECD itself realized that centralizing economic development into a few very concentrated regions in Canada – has broad political, economic and increasingly bad social outcomes.

Having said all that, I am not sure Nevada has a lot to teach New Brunswick. Walking through a local sporting goods store and browsing through shelf after shelf of guns and ammunition is a little creepy. Looking at a wall of photographs with young girls (as young as nine years of age) with their prey that they have shot (bears, mountain lions, etc.) is a little creepy. Seeing gambling everywhere – corner stores, grocery stores, gas stations is a bit over the top. I’m not being judgemental here but coming from New Brunswick, it’s a little weird.