#DevTalks: Easy to Say, Hard to Do / Leading Economic Change in Wyoming

DISCLAIMER: This webinar transcript was loosely edited and there may be inaccuracies.

Ricardo Hausmann: Hello, everybody, and welcome. I'm Ricardo Hausmann. I am a professor here at the Kennedy School and I'm the director of the Harvard Growth Lab. And the Growth Lab organizes these Development Talks. And today we have the honor of featuring one of our counterparts in one of the projects that the Growth Lab is doing. The Growth Lab is a group of about 50 of us in here at Harvard. And we do academic research on issues of growth, but we also do applied research with governments around the world, both at the national, state and local level. And we have done work with Australian provinces and Mexican states. This is the first time we have the honor of working with U.S. State. So it's great to be able to interact with Josh Dorrell, CEO of the Wyoming Business Council, who's one of our counterparts in our relationship with the government of the state or the glorious state of Wyoming. And so Josh has a rich career in the private sector and has taught at the University of Wyoming College of Business. And the University of Wyoming is generally referred in Wyoming as U-Dub, which was not intuitive to me until I understood that it was U-W U-Dub. And so he took the helm of the Wyoming Business Council in February of 2020, just in time for COVID. And he's been leading the organization ever since. The Wyoming Business Council is working to support growth and transformation of economies across the state. The state is incredibly heterogeneous in terms of its economic structure, and I had the privilege of visiting different parts of the state accompanied by the Wyoming Business Council, and I could see the operations on the ground and the impact. I was really, really impressed. I mean, and it is the case of our state organization that is very much engaged in private sector development. So it was very, very insightful. The session is going to be moderated by our own Professor Gordon Hanson. Professor Hanson has done a path-breaking work on issues of migration, trade, labor markets, China shock, but in particular, he teaches urban economic policy and has thought a lot about the regional impacts and the regional economies of the world and the U.S. in particular. He, together with Professor Rodrik, leads the project of Reimagining the Economy here at HKS. Yes. And he has some personal affection to the state of Wyoming, which is one of the reasons why we asked him to moderate the panel. So without any further ado, Josh, it's an honor to have you.

Josh Dorrell: Thank you, Professor Hausmann, I appreciate the introduction. And as I'm as as you mentioned, I am from Wyoming and the CEO of the Wyoming Business Council, which is essentially the state's economic development agency. And but before that, I'm really a lifelong Wyoming guy. I'm someone who my family moved to Wyoming in 1975, which is a long, long time ago. And it was when I was about eight months old. So I'm neither a native of Wyoming nor someone from the other state, and I won't mention it that I come from. But I spent my childhood in Wyoming, and I was fortunate enough to also spend my career and my adulthood in Wyoming as well. I'm the son of a coal miner from a county called Carbon. And the funny thing is, is that there is no more carbon being taken out of Carbon County, at least in the form of coal. All those coal mines have been shut down and have been reclaimed. And now the mining industry is predominantly in other areas of the state and where I grew up. And so I got to see firsthand those booms and busts that you'll see some data about as well. But I got to see those firsthand. I was fortunate enough to live in a state that has a very well-funded education system and all the way up through college. And but unlike many of my college classmates, I did get to stay in Wyoming. I found a career in Wyoming. I got to work in the private sector a long, long time and travel all over the world, but always come home to Wyoming. A great place to spend with my family and raise my children and really enjoy the benefits of Wyoming while at the same time seeing other parts of the world.

And then in February of 2020, I was able to work with this team at the Wyoming Business Council, a team of 40 people to really reshape the economy of Wyoming and ly take what we call the you know, the economic development strategy in Wyoming and take it from a piece of paper and make it reality. And in a nutshell, that strategy is really, really simple. And it's probably not that different than most companies, most states. But the key. It's really tough to actually enact. And so that strategy is to take our core industries that we do really, really well and leverage them to activate new sectors. Again, it's not really that groundbreaking. In fact, that's a pretty darn good strategy for almost anything except that it's really hard to do on the ground. And so I'm going to walk you through a few of those things. But as I do that, I want to introduce you to a few of our core industries. And so as you can see here, you're probably used to this scene. Many of you have seen this scene. It's the Tetons. It's a pretty famous cabin. And thousands and thousands of people travel from all over the world to visit Wyoming every year. In fact, our tourist economy is our second largest industry. It's a really impressive thing if you haven't been to Wyoming. We have the first national park in Yellowstone. We have the first National Monument and Devils Tower, and we have a whole lot of beautiful scenery and wide open spaces. Now, if you're used to Boston, you're not sure what those are. But what I can say, what I can tell you is the roads go pretty straight in Wyoming and you can see a long, long way. Our third largest industry is agriculture. And this happens to be a picture taken at our agribusiness manager who happens to be in the room at her ranch in southeast Wyoming. And and agriculture, not just food production in terms of meat, but also in terms of hay production and sugar beets and other crops are a big piece of our not just our economy, but also our sense of being and who we are as a state. And so, again, it's our third largest industry, and it's really important to us because of those wide open spaces.

The next is our extraction industry and energy production. And Wyoming is, quite frankly, world renowned for all of those things. And if you take a look on the left hand side, you'll notice a dragline and a shovel loading coal into a into a giant bucket truck. And we produce 40% of the United States coal out of Wyoming. So that's a really, really large amount. We have enormous coal deposits and they will likely a lot of them will likely stay in place based on outside market forces and things like that. If you look down into the bottom left hand corner, you'll see of an underground mining operation for Trona, which is then processed into baking soda and it's utilized for glass production. If you've ever eaten a chocolate chip cookie, you'll likely have had a little taste of Wyoming. And if you've ever used glass, which again most of us have, that likely comes from Wyoming, because 90% of the soda ash in the United States comes from Wyoming. We have the world's largest deposit of natural soda ash, which is really important because it's very green, because you can create soda ash synthetically, but it takes an awful lot of energy. And a lot of the places where it is created today don't utilize green technologies to make their energy. And so that synthetic soda ash is not as green as that natural ash. And so these are our three big industries. And and there are a couple of things to note about these industries that I think are really important. First is that they were gifted to us the land that we have, the beauty above land, the natural resources below land were gifted to us and we have done a lot to extract as much value as we can out of them, and we'll continue to do so. The other thing is, is that these are all what I would call scarcity driven resources. They're not making into more land. You can only have so many hotel rooms to see all of the beautiful, beautiful places. And once you take a ton of coal or a ton of Trona out of the ground, you don't get it again. It's gone. And so that scarcity mindset is something that has developed a system in Wyoming that we're all used to. People who have lived in Wyoming a long, long time like me. We're used to that boom bust. We're used to scarcity being the thing. And if we take from this, it's gone forever. And so that's an important component because as we look to activate new sectors, that scarcity mindset can be a challenge. And so I'm going to walk through a few of those, those things.

But we always like to start with this whole idea as we're looking at the economy and our and our economic policy. We like to look at this as our starting point. Because for a long, long time, Wyoming really hasn't grown. We've kind of gone up and down, but we haven't really grown. And so is it even possible? And if it is possible, is it something that we can sustain? And so this is the way I might say it to this group here. But if I were talking to members of people in Wyoming who happen to have a family, they would see it differently. They would say it like this. They would say, will my children have opportunities in Wyoming? And that's something that far and wide people worry about and they have a right to worry about it because the data backs it up. Because if you look at the folks who are born in Wyoming and then move somewhere else compared to our neighbors. Well, I guess we're better at that is one way to look at this. But really, it's a challenge for us. We represent that top line where over half of the people that are born in Wyoming State are in leave Wyoming. So less than half stay. And that's a challenge for us. It's a big time challenge for us. And you might say to yourself, Well, that's not always bad, but it is. And it can be a big challenge for us, especially when the population growth has been occurring. But in the state, if you look at the bands on the excuse me, if you look at the columns on the right hand side of the graph, the last three columns represent population data from 2010, 2020 and 2030. Now, if you look at that, if you look at those bottom three sections of that, those are typically speaking. The generations or the ages that create change in a society. Those are not growing at all. In fact, they're staying the same or maybe even going down a little bit. But if you look at the other bands, the top two bands, those are bands where people tend to get a little bit more conservative. Maybe they're a little bit they're less averse to or they're more averse to change because they want things to stay the way they are. And unfortunately, those are the areas that are growing in Wyoming. And those are the groups that are growing. And if you want to know why, it's actually quite simple why the younger generations aren't growing. And the the older generations are in Wyoming. And I'll show you this first graph. Wyoming is represented by the black solid line. And this is the relative growth of jobs compared to our neighboring states. Well, you can see that our curve doesn't look like their curves. And it's also lower and has a downward trend from about 2008 on. Well, that explains some things. Right. That's pretty obvious, really. Here's the other thing. And I don't know if you can see it or not, but this is why or likely something that is related to why are the older bands in our demographics growing at a faster rate than our younger ones? Well, this graph demonstrates something that we tout at Wyoming as a great thing, which is our taxes are really, really low. In fact, we have one of the most tax friendly states in the nation, and we also have one of the most business friendly states in the nation, which is great for us at the Wyoming Business Council. We're trying to attract and recruit and grow businesses. However, it's also something where there is so little personal income tax or any tax burden on the individuals that it makes a lot of sense that those folks that might be retiring. I want to stick around Wyoming. Right. So those groups are growing and that does present an opportunity, but it also represents a challenge for us. And you'll see why here in a bit.

Just to give you an idea of the difference between these two. An average family of three of a moderate middle income type of family pays about $4,000 in taxes per year. The services that they get from their city or the state is $27,000. So you start to do the math on that. The mineral economy is a pretty big deal in Wyoming. This is also one of the reasons that I believe that some of the younger generations are not in Wyoming, or at least they're finding other places to work. And it's the whole idea of instability on their employment. Now, I don't know how many of you are looking at employment in the future or looking at your employment today. And you're saying one of the things that's important to me is do I have a job somewhere else if the one I have goes away? Do I have a job in the same town? Can I support my family? Can I do that in a way that is sustainable and really with some security? And if you look at the blue curve, the blue curve is Wyoming's employment and the red shaded red area is the United States. And of course, they're not at the same scale. But if you look at those two curves, they don't look alike. Fact, you can see that ours are boom and bust. It's up and down. And that instability causes some challenges for us. Now I'm going to take the same exact graph and I'm going to compare it to some of our neighbors, because maybe you're thinking to yourself, yeah, but gosh, maybe the coasts just bump up the United States's numbers and make it look really good. And I won't say it's the West Coast because, you know. That's not factual. I have no idea. So I should check the. I changed that part of the speech from when I go to the other coast as well. But I think if you look at our neighbors and us, you can see the exact same thing play out. Wyoming has an instability that our neighbors do not. And so if you look at Wyoming, we have that up and down. You look at Montana. Montana is actually looks very, very similar to the United States. They had a very dramatic event in 2020, just as all of us did, dropped way down to the bottom there. And they're there. They're climbing back up. But if you look at Idaho's, Idaho's is actually quite a bit different. Idaho's climbs much like Montana's. But the drop off that they saw in 2020 was not as deep. And if you look closely at the end of that curve, you'll notice that they're actually at a level above where they were entering in to the pandemic. So that is something that we look at and go, Oh, wait a second. How come Idaho can do it? What can we do? And of course, we do know that Idaho's make up of their economy is based more on knowledge sector jobs. It's based more on those things that are not as as damaged. Maybe by one industries. UPS and downs. And so, again, you take a look at all of this data and you ask the big question, does Wyoming have a growth problem?

One more thing. This is the industrial diversity index of Wyoming. And so if you look at the red curve here, you'll notice that our in our diversity in our industries has gone up and down as well. And generally speaking, that has to do with the energy markets of the nation. And as you look at that, you think to yourself, and this is what I get really excited about. Where we are today is higher than we've ever been. As long as we've been recording this since 1970. That's pretty good, right? That's a really big deal for Wyoming, and we're excited about that. It's something that we're proud of. It's something that we work hard on every day. But if you look closely. We're still last, so we're doing better than we were before. But in the United States, our diversity index is the lowest. So that tells me we've got some room for improvement, which is a really exciting thing. It's an opportunity for change. But it's also, again, a contributing factor to the challenges that we face. And so do we have a growth problem? I think it's pretty clear that we do. In fact, it's so clear. That the work that we're doing with Ricardo's group and in the Growth Lab in their growth assessment of Wyoming states just that, that we do have a growth problem. And if you look at the middle section of this, this is the area that we that I really want to focus on today. And if the area that we've been focusing on for a number of years, how do we look at local capabilities and capacity and build that up so that we can deal with this growth problem, not just from high level policy and high level funding mechanisms, but also from the ground up? How do we really build the local capacity so that as new companies come in or companies come in and they want to grow, that they can sustain that growth for a long, long time, and so that our local communities can really define the way they want to see the world and define their approach to a market. And so that's something that's really exciting for us. And it's an but it's also a big challenge. In fact, the funny thing is this was done in November of 2022.

In the summer of 2019, we laid out our economic development strategy, and these are our purpose and vision. You'll see that these are a direct response. So it's almost like we could see the future, but these are a direct response to that growth problem that we all see. And this is what we've been working on for the last few years especially, but also over the course of our 25 years in existence in the state. And so you can see that we wanted to really understand and realize that diverse, broad and more than anything, lasting growth so that we can prosper no matter what. Now, one or two industries do and have that resilience that we need. And so to do that, we have we have devised a number of ways to to do that. And I'll talk about a few of them specifically today. But before we do that, I want to introduce you to what we call the triangle, which is a way to look at the framework for state level economic development and local level economic development. So the Wyoming Business Council was created in a way to develop the policies, funding mechanisms and really develop the programs that would help our local economies grow on their own. We sort of want to work ourselves out of a job is essentially what we want to do. We want to make it so that our communities are so strong that we don't have to exist now at the local level. We want those unique economies. We want them to fund their own economic development operations. And we really want them to do and take the lead on recruiting and business retention. So those are things that we feel really strongly about. And if you ask people in Wyoming, we love local control. We want the top of that triangle to be as small as possible to any state control. We want that to go away. But in reality, it's not really like that. In fact, if you look at the 99 communities in Wyoming and the 23 counties, the amount of capacity or capabilities that they have at each of those in each of those areas, it varies wildly. And what I mean is, is that there are some places that have a very mature and astute and professional economic development organization that their community can thrive on its own and then in other places, and not through lack of effort, but mostly lack of resources. There are other places where the same person who's doing economic development is wearing like three or four different hats. They're the town clerk. They happen to be on the county commissioners. They happen to do a whole lot of things. Well, that's pretty challenging. It's pretty challenging to do with that kind of scale. And at the state, it's hard for us to say, here are the policies and the funding mechanisms, but if you don't have the capabilities to take advantage of them, it's almost like they don't exist. And so our real challenge is how do we close the gap? So while we could come up with or we could we can make our policies better, we could get more funding from the legislature to do more programs. What I really feel like is we've got to do both of those things. We've got to look at the policies. We've got to get the funding. But we also have to close the gap in capabilities at the local level. And so here are a number of things that we've been doing to do just that. The first thing that we've been doing is resetting some of the expectations.

There was a period of time in the state's history where the Business Council would fund almost any project that came before it, if it fit the rules. We would fund it. Now, that's kind of a nice thing to have. It means you probably have a decent amount of money in your budget. But over time that money has been eroded, likely by funding everything that we could. And also, it's not really created the economic development that we want. It's created some really good projects. It's created some really good facilities in our communities, but they haven't really spurred on that economic development growth that we wanted. And so over time, we've heard you need to create great jobs. You need to make it so that people can fund their own economic development activities. And you need to get rid of any kind of barriers to growth. Yes, we do. The tough part of that is actually saying no to projects. It's easy to say that on paper. It's really hard to look at the mayor of a community and say, we don't want to fund your community center because it doesn't spur on economic development. It's really, really hard to say, but it's something that we take seriously. And over the last three years, we've said no to about $25 million worth of projects. That's probably about half of the projects that we see we've said no to. And it's important. It's not made us very popular, but we weren't there for popularity. We're there to actually make the economy work. The other thing that people love to say, and it's really easy to say, is you should fund clusters. Clusters are great, in fact, in economic development. If you can start an ecosystem or a cluster or whatever word you want to use for that, you have won. That's fantastic. That's a really big deal. Here's a graph of a couple of the different clusters in Wyoming that we have helped fund or we've created policy to support and the difference that it makes. You can see that in both of those cases, there's almost like hockey stick growth in in the employment there. That's great. We want that. However, there's a tough part about that, which is that that means you have to disproportionately invest in communities, specific communities. And one thing about Wyoming is that I don't know if many of you have heard of the game "Six degrees of Kevin Bacon." The idea of that is it's more like three degrees of Wyoming. Trust me, we were just talking earlier and and Ricardo was mentioning the places he'd been in Wyoming and the people that he talked to. I said, Oh, I went to school with that person. I know that person through this person. Everybody knows everybody. And so when you're investing heavily in one community, you're leaving out 90, 98 other communities. And they all know somebody, probably the governor. So that makes it really tough to do. But it's our job to shield to really basically be able to do that and to have the broad enough shoulders to say we are going to invest in clusters. This idea of increasing know how. It seems like it's really easy, right? Our local economic development boards and the community leaders. They should know more about economic development. They should understand that it's a long game. They should understand that sometimes you have to take a step in this direction to make it in this direction. Well, that's tougher to do because it turns out that a lot of those folks don't have the leadership training in economic development to really make those decisions. Yet they're the ones making those decisions. There are some communities who are defunding their economic development boards. And we're not exactly sure why. And so what we decide is, like, we've got to be we've got to make it so that they understand that they see the long game.

The communities that win in Wyoming are the ones with leadership that see the long game, that invest in things that make those unpopular moves, that risk reelection so that they can do the right thing. And so we've developed what's called the Wyoming Academy, which is a 30 person cohort of leaders from all over the state. And we're going to teach them economic development principles. We're going to teach them about how hard it is to lead and how sometimes that means being unpopular so that you can do the right thing in the long run. Net first class launches in January of 2023. It's pretty exciting. Excuse me, June 2023. The other thing, and this is something that when you're developing policy or when you become part of the state government, you hear a lot. You hear you hear a lot of excuses. You hear a lot of silver bullets. If we only would do this one thing, everything would change. Like, wow, I don't know if that's true. Simplicity is probably for the past because things are a little more complex now. But you hear a lot of these things or somebody will say, You know what, We can't do that. Because if we bring in a new company into our town, what are we going to do about all these new people? Our classrooms are going to be full. Our streets are going to be busy. All those things, we're like, yes, that's actually true. That's not necessarily a bad thing. But we face those questions when we do these. And so one of the challenges that we have really taken on head on is this whole idea of how do we give people the right framework for solving those problems rather than just having that surface level excuse. And by the way, you're just here's where you say, why can't you grow? Oh, we don't have the workforce, we don't have the housing. Well, that's and then that's as far as it goes. And we don't want that. We want to give people a framework to dig a little deeper. Just by the way, here's a quick, ironic thing. We lose more than half of the people who are born in Wyoming. That's workforce leaving. So if somebody says to me, we don't have the workforce, I'm like, Well, they're leaving. Could just maybe retain a few of them, and maybe we wouldn't have that excuse. But digging down is what we're doing with the Growth Lab and what we call Pathways to Prosperity is a big reason for the work there, is to really kind of help people understand that there are ways to prosper and that there is a framework from getting from those surface level excuses and digging down into the true problems, because as I'm sure the team would tell you at the Growth Lab, No. Two Wyoming communities are the same and heterogeneous is the way to say it. But that's that is true. It's really, really challenging. So we might say workforce in one area that means something different in two different places in the state. And so we've worked we've been working with the growth Lab to develop that methodology. And then through the academy, we'll continue to teach that methodology. So we've painted a pretty bleak picture for many of you, like, wow, this is or if you're one of those people who just sees opportunities and everything, you're like, this is the greatest place on earth because there are a lot of opportunities.

But we do have some really big advantages in Wyoming, and I think that there are real advantages and they're things that we're going to continue to leverage as we face these challenges head on. The first winner or maybe the zeroth thing that we have is that we're not afraid to say what's wrong. We're not afraid to gloss it over. We're not afraid. Excuse me. We don't want to gloss over. We're not afraid to say. These are the challenges that we face and we're going to take them head on. Couple of other things. We have an understanding of natural resources and energy that much of the United States actually doesn't have. So we've done studies to understand how do people respond to things like small modular reactors and how do people respond to the various types of energy that are being able to be utilized? Carbon capture, utilization and storage, hydrogen production. How does the Wyoming's populace respond? We respond favorably to those things. In fact, this happens to be a picture from a town hall meeting in Kemmerer, Wyoming, where the demonstration of the first the United States first small modular reactor is occurring. So a nuclear reactor is going into Kemmerer. Our population understands that and is not necessarily afraid of that. And so we're really we think that that's a that's a big advantage for us. Plus, we have enormous uranium reserves and we also have enormous rare earth element reserves in our state. So things that are moving into the future. The other thing is that everyone will tell you that they collaborate in any state. All of the agencies will say, Yes, we do collaborate. Of course we collaborate, you know, but we actually collaborate. And and what I can tell you is that that three degrees of of of the governor will say in Wyoming it's real and it's important and we utilize that network dramatically. So when, for example, the three entities that you see here have all been part of the Growth Lab in some way, they've recently worked on a definitely a project that would be in one of their camps, but it was led by another camp. And we didn't care. We didn't care who got the credit. We don't care who is is to blame. We all shoulder it together. And in Wyoming, the speed at which we can do that with our agencies is impressive. When we recruit new businesses, they always come to us and say, you know, everybody tells us that it's really easy to do business in places with the government. But in Wyoming, it's actually true. We can actually get you to the right people and we should use that small size to our advantage.

The other thing, and I mentioned this before, was the three degrees joke is that you really do have access to leadership in Wyoming. So our legislators as well as our agencies and of course, the governor, very accessible, very accessible. And the fact is we can turn legislation around really, really quickly and that we have things like the L.L.C. legislation way back in the seventies. We created that a lot of the cryptocurrency or excuse me, the digital assets legislation that is very, very hot in the world right now. We created that. We were the first to do that. The challenge that we have is that we didn't always have the things to back it up and in the system to utilize it. And so that's what we're really trying to build. But when you when you need access to leadership, Wyoming has it. In fact, a one of my friends in the governor's office was giving a speech at an industry event. They said, if you don't know the governor of Wyoming or you haven't met the governor of Wyoming, that's on you. Because we are extremely accessible and our legislature turns things around really, really quickly. The key is to do the right things, which again, is all about building that local capacity and making sure that we take our knowledge and utilize it in the best framework we can. And with that, I'll open the floor to Gordon and then answer any questions we have. So thank you very much.

Gordon Hanson: So thanks very much, Josh. It's really interesting to see what you guys are up to. And, you know, a very clear and honest assessment of the challenges that you face, but also a promising assessment of the of the capabilities of Wyoming. Wyoming is near and dear to my heart because it's where my father in law was born and raised. And so my wife's family hails from from that part of the world. I think part of our first house was financed by mineral rights from somewhere in the south eastern part of the state. So since we're, you know, Wyoming has the reputation as a place that believes strongly in limited government. And so before we get into some of the details, how do you justify what you do to the rest of Wyoming? What you know, it's Wyoming, after all. Why don't we just let the market do what it does? What are the market failures or government failures from the federal government, wherever that that you all are trying to address?

Josh Dorrell: Yeah, we get that question a lot, which is we'll just let the market decide. And and I think I think what we usually do is say the market is deciding and that may not be a great thing sometimes. And so I look at it as how do we introduce imperfections into the market to help Wyoming win. I think sometimes that people utilize that, especially in Wyoming, that's said a lot and they don't necessarily take a look at what's going on outside of Wyoming because other states and other entities are introducing those imperfections and we need to be able to deal with that. And so we look at it as this is us helping spur on the economy. This is us competing with other states and and perhaps even at different levels of government, but making sure that we we really utilize that as an even playing field because and you nailed it Wyoming sometimes sees itself and only look at looks at itself because we have this whole self reliance culture. But we need to realize that we're competing across our borders, so we utilize that.

Gordon Hanson: So I want to push you a little bit more on that and think about the specific ways in which markets might get things wrong from your perspective. So one way markets might get things wrong has to do with the whole cluster idea. Wyoming is small and the logic of economic development globally is that resources are drawn to our resources already obsessed. And so pushing back against that is something that we teach our students in our classes can work, can also not work. You can also design things that may not make sense, but then there's there's a different motivation, which isn't that's kind of an economic efficiency rationale. Another rationale is, look, we have people who are here and we want to take care of them, and it's more of an equity rationale. This might not go far in the Wyoming context, but as you think about what you're trying to accomplish, this balance of trying to address ways in which the market might engineer the distribution of resources out of the state, and we think there's a reason why we want to counter that versus taking care of the people who are in our backyard, because that's what we're supposed to do.

Josh Dorrell: Yeah, that's well, that yeah, you nailed another one. That's a that is a big challenge for us. And, and that whole idea that what you did five years ago or ten years ago, you may not get to do again and it may not be the same person doing it. And that is a challenge for us. One of the things that you mentioned it with clusters that we're really trying to develop is what are some areas where there isn't a single competitive advantage anywhere in the world? What are some new areas that we could develop a cluster around? Some of what are the new industries? And obviously energy and natural resources is something that we are looking really hard at because it's something we've done for a long time. So you take a take a look at the whole idea of small modular reactors and how do we take the capabilities that we have in energy production today and oil and gas and coal and change some of that into utilizing that for developing what are modular reactors and redoing those parts over and over again with the same workforce. The other part is looking at things that are completely new. For example, we've got a lot of controlled environment, precision agriculture, and we have a lot of that research that resides in Wyoming at the University of Wyoming and in companies that are nearby. And that is an area where we think that there's no one with an advantage. And even the folks in the Netherlands who are have a greenhouse advantage. They don't have the advantage in the in that controlled environment precision and in vertical farming that Wyoming is developing right now in the cluster. And so that's an area where we think what are some of the things that are not even being addressed? Can we go up and compete against huge industries that are already there? Probably not. We're going to have to be pretty, pretty choosy on that.

Gordon Hanson: So, you know, that raises this really interesting challenge that Wyoming faces, along with a lot of other places that have discovered that they have reserves of minerals that all of a sudden are vitally important for what economic developments going to look like globally over the next couple of decades. Congo has cobalt. Indonesia has nickel. Argentina has tons of lithium. So does Bolivia. The Bolivian lithium doesn't seem to make it out of Bolivia very often. All of those countries are talking about how do we develop manufacturing capacity That puts us on not just on that mineral extraction part of the new green economy, but on the manufacturing, but on the production side. An alternative approach is what you might think of the Norwegian approach. We've got oil. Let's extract all of that oil and let's invest it very, very wisely. And we're going to ride the ups and downs by making use of our rainy day fund. That comes from knowing that we're good at this one thing. We're a small country and we're going to just do that. So you all are kind of in on the first strategy. But talk to us about how you think about talking yourselves down from the second strategy.

Josh Dorrell: You mean the Norwegian strategy?

Gordon Hanson: The Norwegian strategy.

Josh Dorrell: Well, in a lot of ways that is something that we already do. So we have had, you know, tremendous mineral wealth. And we I think we have the largest rainy day fund in the United States. We have a very large rainy day fund. But at the same time, I think my agency is is less is a little less concerned with those things. And my agency is more concerned with how do we make sure that we don't pick one or two of those strategies, but we actually enable economic growth at that local level. And so how do we start with the capability? I think the whole idea of adding value to your first strategy that you mentioned, that one's pretty challenging because the market decides a lot more on that one. And we've been I think we've been riding the Norwegian we've actually been utilizing that strategy, maybe not on purpose, but we've been utilizing that strategy for a number of years. And I think what we're saying is you don't want to continue to we want to utilize that game, but we want to have an end strategy as well. So and these other things that can help maybe make it a little less bumpy, I guess.

Gordon Hanson: So you're your leadership training program for economic developers is a really intriguing thing. And, you know, one of the things got a lot of folks that in a part of the Growth Lab, part of the Center for International Development that studied economic development in other contexts. Many other countries development strategy gets articulated at a central government level and gets articulated down. Subnational governments are following orders. There are exceptions to that. U.S. is not like that. The U.S. is chaos. You even in a small state like Wyoming, the number of district boundaries and jurisdictional fragmentation and it's just is is kind of mind blowing. And in that world, we have developed this kind of special layer of economic development organizations that play this role somewhere between the private sector and the public sector and civil society. And if I am hearing you right, you understand that those capabilities, leadership capabilities at the local level in that domain are really important. And we've got to play a role in imparting those skills. So I'd like to hear more about that in terms of is this about just leadership per se, that we have a sector of the economy that needs people who have basic management leadership skills to run an organization? Or is this more about training folks and specific strategies for economic development, better about the sectors, about credit markets, about workforce development? Or is it some combination of the two?

Josh Dorrell: I would say it's actually more the first where we're trying to generally do general leadership capabilities, because one of the things that and this is a it's a pretty interesting thing that I realized I utilized a triangle or a pyramid in that. But you have the constellation idea where you have a lot of these distributed groups doing their own thing, but utilizing the resources of others and the methodologies of others where you have that top down approach. And, and the challenge, I think, is that the top down approach doesn't work. And it is it's more like a constellation or chaos in the United States and in Wyoming as well. But for us, it's more about the general basic level of leadership and how to take a community from one place to another, rather than saying here are the specific things that you should do and now execute. Because quite frankly, as you look at the differences amongst Wyoming communities, I don't think we can do that very well. I think we could we could help a couple communities win with that first approach of saying here's top down to do these specific objects. But what we're trying to do with the with the Growth Lab and work there is build a methodology and help people solve problems with the right methodology, no matter what the problem is. And so it's it's a little bit more philosophical and it's less directed.

Gordon Hanson: So one more question before we open it up to the to the audience. As you were talking about learning how to say no and this kind of strategy change that you undertook a couple of years ago, just saying no to at least kind of half the dollar value of projects that are coming your way. This is a challenge that lots of economic development organizations face with when you're have more of the Regional Industrial Development Corporation model, you have a portfolio of real estate, you have metrics of return on investment, and it's a lot easier to say, okay, you need to show us ROI above this or you're not in the game. You now have such a wide range of activities that measuring ROI is complicated. It's a mix of private return on investment, but also this more nebulous concept of the social return on investment. And one, how do you think through that prioritization as the projects come to you? And then if you could say a bit more about how you communicate that idea without telling people flatly, sorry, your ROI is just too low for us to count.

Josh Dorrell: Yeah. And that's that's a it can be a bit of a trap. You're right. For a for a particular company or a particular regional industrial Development Board that that can be a little more simple for them. But where we have a very broad range of communities and needs and, and places that are in a different stage of their development where sometimes the ROI doesn't really pencil out on that project, but it might on the future things. We go through a pretty rigorous scoring method and it's and it's not all just numbers. We work with the board of our board of directors is 13 people from around the state and they have regional as well as industry representation and they all look at those two. So we kind of go through as our team. We look at it and say, okay, does this create great jobs and does it are those jobs going to be around long term? Does this help the community actually do the next in economic development project or two or three? Does that get rid of a barrier to growth that we see? Maybe it's a water line for the infrastructure or maybe it's no, it's getting a project over the hump in terms of its own project or why does it get rid of that barrier for growth. So we look really, really closely at those things. Then our board as an investment committee looks at them and then our board of directors looks at them and then we make a decision and communicate it back out. Is it hard? It is. I don't know if it's ever going to be easy and we'll never have a number, will never have this number that says, Oh, you're above a 2.4. Funded. You know, we'll never have that because we have such a disparate amount of folks along the spectrum. And so what we're working to do is get in to the project before the project happens and after the project happens so that we kind of take a more holistic approach. I think for a long time we funded the project and expected that it wouldn't happen, that things would just happen on its own. So we're asking people to really look ahead of time and paint us the picture of the future. And in some cases, we're going to get it wrong. Like, we will get wrong. I mean, the investments that I think the state makes in those has to be an economic development, has to be more risky than a private investor. And so we're never going to have that ROI cut off. But we're always going to be let's just say we're always going to be in the spotlight answering tough questions. And I think that's just part of the game in Wyoming.

Gordon Hanson: Well, thanks for just sharing a couple of minutes to chat. I am super interested in what you guys are doing and it connects with some of the things that we're trying to work on in Kennedy School right now. Let's open it up to the floor. I think what we're going to do is to take two or three questions at a time and then give you a chance to answer. Attendee Hi. Thank you. I was wondering if you could tell us the story of two types of businesses, the big multinational or big American company that comes and tries to do business in Wyoming. And then the story of innovation, entrepreneurship, new things.

Attendee: (Inaudible)

Josh Dorrell: I only pick winners and losers is the so. So I'll cover. Maybe I can cover both in one particular answer. So the story of the large organizations that come to our state, typically speaking, has been a story of energy. So if you look at the large multinational organizations that are in Wyoming, those tend to be the large that Peabody calls the ExxonMobil of the world, the Chevron, those big companies. And and they utilize and and look at our kind of our natural gifts that are under the ground. And they create great jobs for folks. Wyoming has one of the things that they have in that that they brought to us is they've brought a really high standard of living in Wyoming. And so they find it fairly easy to do business in Wyoming. They find a workforce that is willing to work in those industries, and they do a good job of paying people really well to do that. And so I think by and large, it's been a very successful example of how those large companies can utilize a great workforce and utilize the resources that we have on the innovation side. And maybe this touches on a little bit about your question about some of the projects that we have that are really exciting. On the innovation side, I think we have a lot of room for improvement. One of the things that we haven't done very well over the course of our history is commercialize research out of our university system. We just haven't done a great job of that. We have some of the resources in place. I think it's getting better, but that's an area where I really want us to grow more. In fact, we just recently are now utilizing our state small business credit initiative, which is the CPI. We're utilizing it all for venture. So all forward, we're able to use that for funding those high growth companies and that's super exciting for us. But it also is going to I think it's going to highlight how challenging it is to get deal flow in a small state because we are going to have that. We have one university. I know that that's going to sound a little bit odd to to a place where I guess you could throw a couple rocks and hit other ones, right? You shouldn't. But we have one university and a number of community colleges around the state. So the scale that we have to innovate is tough. And that leads me to one of the projects, and I won't say it's my favorite project, but it's a very recent project that has a lot of promise in and demonstrates the fact that one researcher from the University of Wyoming had an idea, started working on that research, commercialize that research, pivoted a bunch of times like startups do, and then developed a type of farming that is breaking yield records for things like tomatoes and strawberries and lettuce, and is now doing that on a global scale and has been, you know, as has attracted $1,000,000,000 in investment from around the nation. So I think it's really exciting and we need to take that model and do it over and over and over again. And that's something that we've been a part of because we're developing the first big research and development facility for that company in Wyoming right next to the university. So it's a it's a very exciting time for us in that particular agriculture space. And that's a that's a project that I think has a lot of promise, but it's not perfect. Great questions. Thank.

Attendee: I was curious how you guys feel about remote work. Like, obviously Wyoming's a beautiful state. Do you have low tax incidence and you have a lot of people who are now finding out that they can work from anywhere in the world. So it seems like a great opportunity to attract those kind of people to Wyoming at the same time. Locals hate those kind of people. They push up property prices and, you know, they just they have different ways. So I'm curious how you sort of navigate that.

Attendee: So the youth aspect that there were demand for so that ash coming from lithium carbonate could be something that would move their the industry. They they they so that industry or that it might not be enough to change the picture. Thanks.

Attendee: I'm interested in the sort of good jobs commitment and that sort of long term relationship that you have with the fundies, kind of once the money's gone out the door. Have you got any sort of examples of experiences of where money's out the door? Funding's gone and then the jobs that you'd predicted to come haven't materialized and sort of what you've done with those sort of funds and that relationship after that point?

Josh Dorrell: Excellent questions. All of those are excellent questions. I'll go and handle an order. So. So in terms of remote work, you know, it's not the I'll say it like this. There is no perfect answer. I think what I like about remote work is that we're able to offer all of the amenities that Wyoming has, like open spaces, low tax burden and things like that. And we're able to hopefully from the remote workers, get that capabilities boosted up. I look at it as a positive because if we can bring people in that have more capabilities or that want to get involved in their communities and continue to help their communities grow, that's a great thing. And we do hear from locals a lot like, well, their kids are going to go to school, too. And I turn to them and I say, like yours do. I mean, we kind of sometimes you just have to reframe that. And I do think that you you know, you have to as a remote worker, you have to consider all of the factors when you're when you're moving into a into a place. The one thing that I don't have a I have a bit of a hypothesis about remote work and I want to I don't I probably won't discuss it out. But I wonder, too, if without the corporate headquarters and the management structure and the varying types of people that you have in an actual business being in a location, do you get the engagement with the community? Do you get all of the kind of those capabilities really leveraged or not? And I just don't know the answer to that yet. And so that's something that I think remote work has some promise it's going to have some challenges. To your next question, I think it was about was it about sodium by carbonate or lithium carbonate? Right. Yep. Yeah. So I admire my mechanical engineering background and chemical engineering background is not super solid right now. But but what I can tell you is that we do have, you know, a lot of resources in terms of the rare earth elements as well as as our target of mines. We have a system in place to mine. So we understand that. I think it'll be pretty interesting to see whether that can be done economically and what that's going to do. Just in terms of soda ash, I think we have like a 5000 year supply at the world's current demand. Of course, that's going to change. But also 5000 years is a long time. It might be 2500, but bottom lines, thousands of years of of of natural Trona. That's amazing. So thank you. Yeah. And then thank you for asking that question. That's, you know, it's unpopular when you tell people no, it's also unpopular when you tell them, hey, you said you were going to do all these great things and you didn't. Right. And I would say up until this point, we we report on projects for a five year period of time after the project occurs. And that's something that we have to provide to the legislature who helps us establish our budget. And it's something that we have to do to own up to when people say, well, this project didn't pan out, but you spent millions of dollars on over time, we have been less about holding people to those numbers and more about hoping that they hit those numbers. But over the last year, we've really looked at how do we tie the to things like payback or things like, you know, what they're responsible for to the actual project so that we have that, you know, sort of I'm not super happy with these terms, but carrot and the stick, right? We've given you this, but you haven't haven't performed. What we have, what we will do into the future is continue to tighten that up so that when a project doesn't perform, they may have some standards that they have to meet more than anything. What we've done to this point is we want to we want to talk to them early and often so that if they see themselves dropping in what they said they would do, we can help build that gap back up. Because ultimately when you're building capacity, you want them to hit those metrics, right? We don't want to punish them when they don't. We want to help them hit them. So that begins that cycle of learning. So great question. Thank you.

Gordon Hanson: So lots of interest and and what you're doing, I think for a lot of folks here, you know, Wyoming doesn't come up every day. And what we and what we do in the Kennedy School, it should because you guys are at the center of a bunch of really important challenges. How do we bring these new material reserves into production in a way that's good for the global economy, good for the economies that are producing these, are producing these materials for us? And how do we think about developing the capabilities of the organizations that ensure development works kind of all the way along the production chain? And you guys are at the forefront of that. Thank you for sharing with us. Great to meet you. And just best of luck on the project you guys are undertaking.

Josh Dorrell: Thank you. Thank you very much. Thank you all. Thank you.