Economic diversification is key to Wyoming’s future

Politicians and public commentators talk a lot about economic diversification in Wyoming, and with good reason: it’s likely the single most important issue for the long-term well-being of our state. If we don’t take it seriously, Wyoming’s future is bleak. 

For almost its entire history, Wyoming’s economy has centered around a few key industries. It began with agriculture in the late 1800s, as cattle and sheep formed the backbone of the state economy. By the 1920s, oil became a major economic driver, and it was not until the 1970s that the coal industry came to dominate. Looking at our state’s history holistically, we see that new industries rise and old ones recede over time. It is rare that our key historic industries disappear entirely, but the same factors that impact global markets impact Wyoming, and our industries develop and decline based on influences that are largely outside our control. This shows us that we cannot expect our “legacy industries” to support us forever, and we must be prepared to develop new key industries to drive our economy.

Beyond the simple reality that our core industries will change, there are other reasons to pursue economic diversification. First, it helps insulate our state from the “boom and bust” tendencies that reliance on a single industry causes. Markets fluctuate, and those fluctuations have big impacts on our state, particularly when it comes to the natural resource economy. For places with multiple industries and economic engines, fluctuations in a single industry are absorbed or offset by others. A decline in one does not necessarily mean a decline in all or in the economy as a whole. In the Wyoming economic landscape, however, a downturn in a single key industry can cause broad problems. Diversifying our economy can help smooth out the bumps of the ups and downs of our existing key industries.

Wyoming also experiences a very high rate of our young and our educated leaving the state to pursue opportunities elsewhere. We consistently lose more of our educated workforce than we bring in, and we especially lose higher than typical numbers of our Wyoming natives with college degrees. We suffer from a perception, fair or not, that there are not many good opportunities in Wyoming for college graduates. Expanding the range and type of economic options available to our younger workers is certain to keep more of our sons and daughters close to home.

Economic diversification is clearly needed and should be a primary focus of policymakers for the foreseeable future. The first step in tackling this problem is likely the hardest. We must change our attitudes. If we do not believe that diversification is something we want, we will never achieve it. We in Wyoming are proud of our heritage, and rightfully so. But we cannot let this reverence for our past keep us from looking to the future. Despite how it makes us feel, our major industries change, sometimes dramatically. Industrial lifecycles are finite. We should continue to support these industries and help them be as productive as possible for as long as possible, but it is economic suicide to exclude potential new industries for the benefit of our old ones. What if we had undertaken that course in the 1920s or 1970s? In either instance, our state would have floundered. We should not choose to flounder now.

The other attitude we must change is our skepticism, bordering on pessimism, about any suggestion that a new project or industry may be successful. A friend recently commented that Wyoming feels like it has lost its appetite for big ideas, and I worry that he may be correct. The part of our heritage that made Wyoming great was just what he alluded to — it was a place where common people could have big ideas. It was a land of opportunity, where we could build new things. We need to cultivate that mindset. There is still a lot of opportunity and room for big ideas here. 

Once we have adopted the right mindset, the work begins. We have already built a very business-friendly tax environment. If we are losing out on opportunities and industries, it is not because they are over-taxed. Rather, our challenges lie in infrastructure, personnel and opportunity. We need to build the physical infrastructure to allow our businesses to succeed. We must cultivate the kind of livable and attractive communities that can attract the workforce to support these industries. And we have to identify what will and will not work in our particular environment. Wyoming will not be the next leader in shipbuilding or citrus farming, but it can be the next leader in something else. 

It will not happen overnight and will not happen without hard work and vision. However, with our support and concentrated efforts, Wyoming’s future can still be bright.