These shows form ad hoc market exchanges that gather whole industries to a common space to make deals. The irony is that what happens in Las Vegas arguably reaches well beyond the city in terms of business activity. The city’s reputation for discretion in personal matters has enhanced its attractiveness as a public space.
As a place for business networking, Las Vegas is, in this sense, a leading world city of great importance to the American economy. The city has not reached this status by traditional means, and conventional data measuring economic activity do not easily capture its form of exchange.
In a world where face-to-face interaction still matters — and may be even more important than ever — Las Vegas offers world-class venues for people to meet and do business. To get a sense of this, consider the variety and size of some of the trade shows that have recently convened in Las Vegas, including the National Association of Broadcasters (110,000 attendees), the World of Concrete Exposition (85,000 attendees), and International Consumer Electronics Show (150,000 attendees).
Some organizations now have annual meetings that have grown so large that Las Vegas is the only venue big enough to hold their major annual trade shows. A good example is CTIA — The Wireless Association. This Washington, D.C.-based trade group could hold its largest exhibition in Orange County, Calif., as recently as 2007.
But as the cell phone industry took off, attendance shot up and future annual conventions are now scheduled for Las Vegas. Although to outsiders a trade show can seem trivial for a rapidly evolving technology such as wireless, these are make-or-break events for many start-up firms. Their ability to have access to the entire industry — if just for several days a year — can provide the basis for key contacts that lead to everything from patent licensing to venture capital deals.
Ironically, wireless is one of the most space-liberating technologies ever devised. Give many high-end white collar workers a 3G iPhone or BlackBerry and they can pretty much do their entire job from anywhere in the world. But in the end, business is all about trust, and that still requires face-to-face encounters.
Las Vegas now plays the highly critical role of gathering all the firms in key industries in one place where they can exchange ideas in person. The fact that Las Vegas is especially fun and frivolous — an adult Disneyland — creates even more incentive for people to attend its conferences, which is how it became the nation’s preeminent convention destination in the first place.
To all the killjoys who now want to shame people out of a Las Vegas convention visit, we say that a major stimulus for the country remains the social lubricant that Sin City provides business contacts.
They’re onto something. Las Vegas has emerged as an important center for business interaction. It also is home to a world class cluster of firms with talent specializing in gaming technology and entertainment staging and logistics, both which have sizeable export markets. Plus its proximity to the gargantuan So-Cal mega-region is a huge plus for the long term, and enables it to draw of a huge entertainment-technology complex.
These real underlying strengths of the Las Vegas economy were overwhelmed by the rush to fictitious wealth created by the housing bubble, which badly distorted the regional economy. The Case-Shiller Index shows a 30 percent decline in real estate values in the past year. And my own quick calculations estimate than in excess of a quarter of Las Vegas’ regional economy was bound up with real estate and construction during the boom – more than gaming or health care or education or government.
The question is, which Las Vegas economy will prevail? Or, as Lang wrote to me via e-mail:
Las Vegas’s fate now hangs in the balance between its failing real estate industry and more resilient convening/entertainment industries (also, throw in water shortages for good measure). The trick is for Las Vegas to find ways to exploit its advantages in temporary face-to-face exchanges that really only generate hospitality dollars into a more fixed regional-advantage in emerging sectors. There are some promising areas such as the furniture mart (a kind of permanent trade show for the interior design/building industry), which could attract architectural and design firms and even lead to industrial design with the right investments. Las Vegas is really a lab to see how major “convening regions” may leverage their now ephemeral advantages as world cities by capturing these exchanges in their year-round economy. Orlando fall in the same category.
Extra point question: Name the original source of this blog header?