January 26, 2021

The Opportunity of the Century

By Joe Wallace

The COVID19 pandemic has certainly changed the way that most of us live our daily lives. Whether one has been deemed to be an essential worker, or is fortunate enough to be among those who can work from home, or even for those who have been in and out of work due to the lockdowns, we have all seen our daily routines disrupted for nearly a year. The virus of the century has exposed nearly every weakness across all spectrums of the economy and thus created the opportunity of the century to take actions to strengthen these newly exposed weaknesses and to plan for a future where these weaknesses become irrelevant. Cities, towns, states and even nations that move into a post pandemic world with plans followed up by actions to improve will reap the benefits of the inevitable changes that emergence from our safe spaces will bring.  Here are some significant and important opportunities for the Coachella Valley to consider.

Regional Acknowledgement: The Coachella Valley enjoys and almost ideal climate to grow a tourism based economy and we have been leveraging it for nearly 100 years. Pre pandemic, roughly 25% of the jobs in the Greater Palm Springs region were directly in the tourism space while another 25% of our jobs were indirectly dependent on tourism. The pandemic has negatively impacted the leisure and hospitality industry across the world and we have been no exception. When the rest of the nation saw its unemployment rate skyrocket to nearly 20%, the Coachella Valley experienced nearly 35% unemployment and our recovery still lags most regions by a wide margin along with places like Hawaii and Las Vegas that have economies that are overly dependent on tourism.

Over the course of the 75+ years, the Coachella Valley has spent hundreds of millions of dollars in building one of the most highly developed tourism industries on earth. There has always been an underlying assumption that if something ever happened to negatively impact tourism that we would be hit very hard.  From an economic perspective, the pandemic was probably the worst thing possible for the Coachella Valley including a major earthquake or an ecological event from the Salton Sea. While there has always been a “feeling” that dependence on a single industry would catch up to us one day, there has never been a sense of urgency to do so. Now is the time for the leaders of the valley to openly acknowledge the economic disaster that we have been living through and resolve to invest in diversification of the economy with the same sense of urgency that we have invested in tourism.

Imagine what the valley would be today if the same level of investments that have been made to develop tourism had been invested in diversification into essential business sectors.  We could have been like Austin, Boulder, Raleigh, or Huntsville that all made deliberate investments that have transformed their economies into sustainable and powerful business sectors. Now is the time to make that choice as a region and to act regionally in a committed way.

The Building Blocks of the Future:  Whether diversification efforts are from organic entrepreneurship or from business attraction there are some fundamental requirements that must be in place to foster success. When seeking a location for an expansion the three legged stool for that decision starts with an analysis to determine whether or not a specific business can be done in a specific location.  If all of the things that a business “needs” are not fulfilled by a target location, it will not succeed and in most cases it will not even try.  A modern example is bandwidth. If a certain business has a need for over a Gbps (giga-bit-per-second) and a region does not have this, that business will not seek to operate where they cannot communicate at the speed that is needed.  Bandwidth is one of those things that is always in a state of improvement. What is acceptable today will not be acceptable in two years so this is one building block for the future that needs to be broader (the Coachella Valley does have some places that are over 1 Gbps) with continuous improvement as part of the sustainability plan.

The second leg of the decision stool is an analysis of the state of the workforce. Many companies start out small with the founders and early stage workers having the skills to get started.  As these businesses grow and need more talent, can a location deliver that talent is the question of interest. For modern high wage essential businesses that means colleges and universities that offer degrees in engineering and computer science. The top educational priority for the Coachella Valley is to expand our college base to address these needs. This is a major undertaking but online programs like those offered by Southern New Hampshire University or Western Governor’s University are already serving students across the nation and may fill any gap that exists locally for students who have the background to succeed online.  The bottom line though is that most population projections for the Coachella Valley have our population approaching a million by 2050 and that merits an independent state university that offers comprehensive degrees.

Finally, the third leg of the business development stool has to do with lifestyle.  This is a place that the Coachella Valley measures up very well on.  Our outdoor recreation, relatively affordable housing, easy commutes and friendliness puts us in a good position to show well if the fundamentals for success are in place.  This third leg of the stool is often a competition between locations. In addition to lifestyle some of the metrics that need to be performing at high levels are K-12 education, crime, taxes, business friendliness, and proximity to customers. There are opportunities to improve in all of these metrics because these competitions will only be won by regions that rise to the top of the candidates under consideration.

The Best Immediate Opportunity: The pandemic has created a situation where people of means and talent are leaving big cities in droves. Attracting a critical mass of these talented people in targeted business clusters who can telecommute solves many problems. Our local workforce has always been lacking in technology professionals.  Attracting telecommuters will greatly improve our workforce in high wage business sectors, will create customers for state-of-the-art bandwidth and drive the elevation of our educational institutions. It will also bring people to the valley who have disposable income to fuel the growth of our retail sector.

Finally, the pandemic of the century is a catalyst for us all to come out better that we were before March of 2020.  A renewed sense of belonging can come from regional efforts to make improvements that are needed.  Perhaps we can start to have respect for those who think differently too.  Lastly, a shared vision of the future of the Coachella Valley will go a long way toward adapting to a post pandemic region of essential sustainable prosperity.

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