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Nevada Business Journal - December 2000
by Shusuke Ogihara & Tom Lorentzen

GOVERNOR KENNY GUINN in a recent speech emphasized the need for Nevada to export. “We need to become exporters of ourselves,” Guinn said. His use of the term was not in the traditional sense of manufactured products or of the tourist industry, but of the talents and skills inherent in the people of our state. It reflected bold thinking and captured our attention. It is the type of vision worthy of 21st century focus and has sound potential not only for business development, but also for strategic image-building for Nevada.

Nevada has already taken a solid step in this direction by making Nevada the “Delaware of the West” for business incorporations. Secretary of State Dean Heller's technological modernization, which both facilitates and expedites the incorporation process, is a key building block for a business-friendly Nevada. Online capabilities in this area, when coupled with new standards to legalize electronic signatures, can provide Nevada with a significant advantage over other states as a locale to not just incorporate, but to conduct business operations. The foundation being laid by the secretary of state's office and the vision being advocated by Governor Guinn have potential in positioning Nevada as a location for international business activity.

Four prerequisites are needed for Nevada to succeed in this initiative: One is a vision of the state's future as a center for international business. Another is the willingness of business and political leaders to move in the direction of that future. The third is a decision to proceed. And the fourth is a commitment of the necessary time and resources.

Using Governor Guinn's advocacy of a new economic vision for Nevada, we believe there is an excellent opportunity to design a prototype with an individual nation that can provide significant long-term return for our state. Using Japan as the model, Nevada is in a position to develop an infrastructure that will allow it to become a leading state for foreign business activity. This infrastructure could become a turnkey mechanism that could be replicated with other nations.

When one of the authors of this article, Shusuke Ogihara, worked for the Sakura Bank in Japan (now in a merger with Sumitomo Bank to become the second largest bank in the world), he saw the problems that Japanese-based companies have in conducting business in the United States. Stereotypes tend to dominate perceptions, and, with that, the practices of businesses. In Japan approximately 63 percent of business is generated by large companies (1998 statistics), while the same percentage (63 percent) of employees work in small to mid-sized firms. When it comes to international business activity, the smaller companies have not had the access, comfort zone, or mechanism from which to actively pursue foreign business possibilities, particularly in the U.S. Because of this, they have relied on the large corporations to develop foreign market opportunities, and the smaller firms then serve in a sub-servient manner to them.

The rise of modern technology for information- sharing has dramatically changed this landscape, however, providing new possibilities for these smaller concerns. What is lacking, however, are both the mechanism to enable them to conduct business and the comfort zone to make the process easier. In these areas, Nevada is positioned to fill the vacuum. Nevada's provision of expertise and assistance through formal and informal protocols would be of tremendous value to Japan. Such agreements could also have quid-pro-quo value not only for our tourism industry, but also for establishing Nevada as a location for international business activity.

When the average mid-sized or small business in Japan looks at the U.S., it sees a labyrinth of 50 separate states with different laws and personalities. In its eyes, there is no clearinghouse or platform from which to function. Hence its hesitancy to become proactive in its pursuits and practices, which, in turn, restricts the development of a more competitive and market-oriented Japanese economy. Nevada is a state ready-made to perform this clearing-house function for several reasons.

One is that Nevada is a tourism state. Not only is our entertainment/gaming industry an international attraction, but we are also the gateway to the Sierras and Lake Tahoe in the north, and Zion, Bryce Canyon, Death Valley and Grand Canyon in the south. The Japanese people are also among the most traveled tourists in the world, (16.4 million visits to foreign countries annually), with over 29 percent of them traveling to U.S. destinations (4.8 million annually). There are at least a half-million visits to Nevada each year. With this volume of Japanese tourists coming to Nevada, many are already familiar with the state and are comfortable visiting here, which positions Nevada to also become Japan's economic gateway to conducting business in the United States.

An example of where this process could begin is the field of motion picture and television production. Japan is now experiencing a major expansion of cable TV channels and digital satellite TV similar to what has transpired in the U.S. This spread is creating a tremendous need for new programming (including entertainment). Nevada could become a gateway facilitator and provider of services and locations for entertainment programming.

Supporting this “economic gateway” concept is the fact that in 1997 Japanese venture capitalists made 4,457 investments in Japan, including 1,910 repeat or continuation investments. In the same year, American venture capitalists made 2,672 investments in the U.S., with 1,296 of them being repeat or continuation investments. The volume of this activity reveals that, even though Japan has suffered a decline in its economic growth in recent years, the Japanese still have ready cash and money to invest. They are also hungry for new investment opportunities, particularly in the U.S., which, with the proper relationship and mechanism, could be directed to and through Nevada. Recent discussions regarding incubator development in Las Vegas could provide a unique mechanism for processing this need.

In defining this process, there needs to be a focus on developing an informational infrastructure and clearinghouse for Japanese businesses, particularly those that are small-to-mid sized, for conducting business in the U.S. This would require further expansion of the language and cultural capabilities that already exist in our tourism industry. This expansion would be used to develop formal and informal linkages for information-gathering and relationship-building nationwide. It would be dedicated to developing a national and international awareness of the opportunities that Nevada offers in the arena of international business.

Instruments that could be used in developing this infrastructure include both UNR and UNLV (including their Small Business Development Centers operated under auspices of the Small Business Administration), key banks like Citibank and Bank of America that have operations in Japan, and hotels with international emphasis and character. The state could play a role, as could its international airports and the cities of Reno and Las Vegas.

Upon completion, this infrastructure could be replicated for other nations and provide a value-added enhancement to the state song – Home Means Nevada. The message we want to convey to Japanese business people is that Nevada can be their home in the U.S. for business purposes, and their preferred destination for tourism as well.


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