By: Emily Haggstrom Issue: Innovation, Growth, Job Creation Section: Government
Salt Lake City’s Economic Prosperity
It’s a city perfectly situated for a balanced life of work and play. Nobody knows this better than residents of the greater Salt Lake metropolitan communities, nestled between the Great Salt Lake and the steep Wasatch and Oquirrh mountain ranges, lending to dramatic sunsets and staggering colorful vistas fit for an artist’s pallet.
For the most part, Salt Lake has been attributed to The Church of Jesus Christ of Latter-day Saints (LDS), weekend ski trips, and films at its annual Sundance Film Festival. But what businesses are slowly figuring out and what outsiders will soon embrace about this quiet city, is that Salt Lake is a prominent source of business and employment with a renowned and undeniably reliable workforce. Whether this is attributed to a trifling nightlife, a rich outdoor lifestyle or simply the desire for rich family culture, residents and transplants of Salt Lake’s metropolitan communities are proud to live in this ever-growing and vibrant state.
It is during one of the nation’s worst economic slumps that Salt Lake and the state of Utah have had what some may consider an economic deliverance. The city and its surrounding metropolitan areas are thriving with new manufacturing facilities, sprawling new business campuses, and data centers popping up in every part of the city, while other parts of the country are experiencing development stagnation.
Growth persists in key industries as Salt Lake continues to lead the charge nationally in a quest for sustainable economic recovery, courting some of the biggest names in business by offering huge economic incentives in the form of tax breaks. Global companies like Oracle, eBay, Adobe, Goldman Sachs, and Proctor & Gamble are either expanding or locating to the Salt Lake valley and working with all that Utah has to offer. “Success breeds success, and we want companies that fit together and offer opportunities to each other,” said Jeffrey Edwards, president and CEO of the Economic Development Corporation of Utah (EDCUtah), a public-private partnership that assists businesses in relocating or expanding into the state.
However, most of the state’s success can be attributed to the government of Utah — it shines as a bright light among states in the West with a balanced and stable budget that offers consistency in the face of an on-going fiscal crises. In what could be considered a truly conservative move, the Republican-forward state cut a third of the government functions, saving money and allowing contracted private sector entities to fill many former government roles. The Governor’s Office of Economic Development, an executive branch agency of the state, believed there was no reason to do what the private sector could do better, so the state gave EDCUtah the ability to offer performance-based incentives and site selections to ensure a fair-minded approach for all parties involved.
“We manage the state taxpayers’ money, and are very proud of the fact that we manage it with a high degree of private sector professionalism. And even though it is tax dollars, we expect a return on our investment. One of the key factors of what we do is post performance,” said Michael Sullivan, director of communications at Utah Governor’s Office of Economic Development.
By strategically courting companies that fit the model of each individual community’s economic climate and workforce, EDCUtah and the Office of Economic Development use a targeted approach to insure businesses and communities succeed despite individual business volatility. This helps support incentive programs whereby companies receive a percentage of their tax credits based on population and job growth.
“Economic Development in Utah is a team sport. Governor Gary Herbert has set his vision for the State, ‘That we will lead the nation as the best performing economy and be recognized as a premier global business destination.’ This goal relies on unprecedented partnerships forged between the business community and government at all levels,” said Spencer P. Eccles, executive director of the Utah Governor’s Office of Economic Development. “We utilize a mix of natural incentives found in our unparalleled quality of life, we maintain a business-friendly environment through low taxes and sensible regulations, and we offer competitive post-performance tax credit incentives to bring the best companies, globally, into the Utah business community.”
With the recent addition of international consumer products giant, Proctor & Gamble, who expanded its manufacturing arm into Utah, the state is poised for continued growth and development. “Our experience in Utah — opening P&G’s first new plant in the U.S. in more than 40 years — has been outstanding,” said Joe Tomon, plant manager of the P&G facility, based in Box Elder County, Utah. “We chose this site for many reasons, including the availability of appropriate land and space, its location relative to the areas we most needed to ship to customers and consumers in the west and northwestern portions of the U.S., availability of adequate natural resources, the skilled work force, and a strong partnership with state and local leaders. Overall it has been a wonderful experience, and we deeply appreciate the warm reception we have received from folks in the community and across the state.”
Although Utah is known primarily for manufacturing, producing everything from paper to aircraft, it is courting other key industries to diversify its economic climate. “There really is some of everything, which is a real strength for us, so that as one particular industry has a downturn we don’t feel the effects of that like other cities have felt,” said Edwards.
Lehi, Utah — labeled the new Silicon Valley — is being targeted for its ever expanding technology sector. And while most tech companies that start in Utah often leave after experiencing substantial growth, Omniture, a Web analytics company recently acquired by creative software company Adobe, has decided that it will remain in Salt Lake, allowing the local talent to stay while Adobe continues to grow its presence across the country. “Adobe’s previously announced expansion plans in Utah are a natural extension of the growth and success of our Omniture Business Unit operations. And, Utah has proven to be a great place for Adobe to do business. We’ve found the region to offer vibrant communities, a skilled talent base, and a business-friendly environment,” said a representative from Adobe Systems Incorporated.
Playing its role, Utah University, one of the original locations linked by a packet satellite to the ARPANet, aides in maintaining Utah’s technology industry’s long standing historical relationship with Silicon Valley. As technology is developed, having local organizations like Adobe, that are catalysts for business and understand the need for new and innovative ideas, these universities become more important than ever. Now companies like Microsoft, Twitter, eBay, Oracle, NSA Federal Data Center, and a major Fortune 100 company are set to announce their presence in the valley and will become beneficiaries of the local schools.
And to stay competitive with other schools like Massachusetts Institute of Technology (MIT), Utah universities have been integral in creating over 40 new businesses through on-going research and development. “Universities are economic engines. If you treat them correctly and give them the resources that they need, they really are drivers of the economy,” said Edwards.
Capitalizing on the strength of their resident talent and seeing the progress made by the local universities, which have been catapulted to the top of national statistics, a special program called Utah Science Technology and Research Organization (USTAR) was created to attract national and international thought leaders to Utah, and was awarded $250 million in funding by the state legislature. By bringing in these elite research teams, Utah is poised to set new standards in research and innovation, improving the economic environment for graduates, residents, and transplants to the city and across the state.
With the addition of these new companies and the steadfast entrepreneurial spirit of Utah’s existing businesses, the state is also leading the nation in trade, doubling its exports on the heels of President Obama’s State of the Union address where he emphasized that, “To help businesses sell more products abroad, we set a goal of doubling our exports by 2014 — because the more we export, the more jobs we create here at home.” And this is just what Utah is doing. With the collective support from the Governor’s Office of Economic Development coupled with the Economic Development Corporation of Utah (EDCUtah), Utah is on track to retain stable and sustainable businesses across the state. “Exports are a wonderful barometer of economic health,” said Jeffrey Edwards, president and CEO of EDCUtah.
Over the last five years, Salt Lake has seen 3.5 percent annualized growth, with almost 70 percent of the new jobs in the Salt Lake City metro area. Like other urban cities, sections of Salt Lake’s downtown include run-down industrial areas that are more of an eye-sore than an economic driver. However, the city devised a plan to transform areas of disrepair into attractive areas. One such example is the City Creek project, described as a “sustainably designed, walkable urban community of residences, offices, and retail stores rising over the next two years on approximately 20 acres across three blocks in the heart of downtown Salt Lake City.” Primary funding from the private sector helps to drive the project and avoids bureaucracies that exist within any city. With the completion of the City Creek project in 2012 the three square block development will serve as an example of community capitalism at its finest.
It is clear that Utah and the City of Salt Lake are brimming with capitalism and pride. Despite the many misconceptions about this state, luring businesses in is not one of them. Over 250 possible new business ventures sit in the pipeline ready to break ground and move in. With low taxes, access to multi-faceted skilled workers, and a zest for businesses that produce return on investment comparable to other large states, why wouldn’t companies want to be in Utah?