Is Reno Really The Next Silicon Valley?

Dec 11, 2017

Credit Michelle Matus

Northern Nevada has garnered national attention as a major technology hub, particularly since Tesla began building its Gigafactory.

But is that characterization accurate? 

Reno Public Radio’s Noah Glick explores the current state of the tech industry in the region.

Lately, the national stories about Reno sound something like this.

“For decades, the city was a gambling mecca. But when casinos fell on hard times, Reno struggled. The city has re-invented itself as a tech hub, thanks to recent arrivals like Tesla.”

That’s a clip from CBS This Morning, talking about Reno’s economic recovery.

Several big names in tech have moved or expanded to northern Nevada in recent years, including Apple, Switch and Google.

This momentum has brought a lot of coverage, with Bloomberg saying Reno is starting to look more like Silicon Valley.

But not everyone agrees with that comparison.

“We want to be tech-y and grow our tech connections with the Bay Area, but we don’t want all the baggage that comes with the Bay Area.”

That’s Mike Kazmierski. He’s the president of the Economic Development Authority of Western Nevada, or EDAWN. He says northern Nevada offers a higher quality of life and lower taxes than Silicon Valley—advantages officials have been using to overhaul the region’s image.

“Well you’ve got a brand that has transformed itself over time. And when you bring in Tesla, that’s an advanced manufacturing company that is a technology company, so it’s part of the brand," he says. "And you start adding to the ones that were here: the Microsofts, the Intuits and the others. And you start to see there’s a fairly good concentration of technology in this region.”

It wasn’t always this way. Northern Nevada was hit particularly hard during the Great Recession, which encouraged leaders to look for ways to diversify the state economy. With its proximity to the Bay Area, tech seemed like a natural fit.

“But we couldn’t bring straight tech into the region six years ago, because we didn’t have any belief locally or outside the region that we had that tech talent,” he says.

That was also a concern for Daniel Price. He’s the CEO of Breadware, an “Internet of Things” electronic development company that moved from Santa Barbara, California to Reno earlier this year. He says Reno ultimately won him over because costs are lower and there are no state taxes—and he’s not alone.

“I know that a bunch of other businesses are either in that process or considering it and several of the startups or midsize businesses that I’ve met in Reno have had a similar story of moving in the past to Reno for those advantages,” he says.

The state of Nevada has also offered some controversial tax incentives to companies, most notably the $1.3 billion package to bring the Tesla Gigafactory to the Tahoe Reno Industrial Center—or TRIC—in Storey County.

More than 1,000 local full-time employees currently work there, and once completed, the automaker plans to employ 6,500 people.

But Reno City Councilman Paul McKenzie is not impressed.

“The majority of jobs at Tesla are in the $15 an hour range at the high end for entry. And those people cannot find housing," he says. "And then they’ve got to transport themselves all the way out to TRIC every day to work, add that cost to the cost of housing, and those are very, very low-income jobs.”

KUNR made multiple interview requests to Tesla representatives who said they were unavailable.

McKenzie has been a vocal critic of EDAWN and the Governor’s Office of Economic Development for bringing these types of positions to the area.

“Being a bedroom community for low-income jobs in Storey County is not a benefit to our community,” he says.

While that’s a concern for local leaders in the short term, attracting high profile companies can help lift a region’s image in the long run. Dilek Uz is an assistant professor of economics at the University of Nevada, Reno.

“So, think about it. If you are a really good high school student shopping for a university to go," she says, "so then if you think ‘Well maybe if I go to UNR, then I can get a job at Tesla,’ then that will put UNR on the map for a lot of good high school students. If you can attract those good students, they’re going to graduate to become really good employees, inventors, entrepreneurs, business people, etc.”

And that, she says, is at the core of any economic development.

“Really the secret for example to Silicon Valley," she says, "is none of the tax packages or anything but their ability to attract the best human capital from not only United States, but all over the world.”

While Silicon Valley has been building a tech culture for decades, Nevada lawmakers crafted an economic development plan to bolster this industry six years ago, meaning the Silver State is really just getting started.