Utah: Out of Great Recession Thanks to Tech

02 Apr, 2015

By Rachel Hamilton

“Our IT sector is growing very rapidly,” says Val Hale, executive director, Utah Governor’s Office of Economic Development. “It has really been the industry that got us through the Great Recession. We are fertile soil for growing tech businesses.”

The tech industry strengths are a combination of three factors: the higher education institutions, the young workforce, and the low tax rates and other business-friendly laws.

In fact, STEM-related industries are all strong in Utah.

Box Elder County is focusing on composites and aerospace, says Mitch Zundel, economic development director of Box Elder County. ATK, he says, is a company that manufactures solid rocket motor boosters and other parts for missiles and space shuttles and is now working on the Orion space launch modules.

“ATK has been here since the 1950s,” adds Rebecca Dilg, commission administrative secretary for Box Elder County. She says that ATK attracts many companies in its supply chain as well.

Utah’s other huge strength is its natural surroundings and lifestyle.

“In 2012, we were the second-fastest growing city in the country, and then the third-fastest in 2013,” says Brian Preece, director of city commerce for the city of South Jordan, about his city. “Within our boundaries we have the community of Daybreak. It is all zoned the same zone to plan as the market dictates.”

Daybreak is a place where CEOs and employees can all live comfortably together and in the same community as the facilities where they work, and it takes up about one third of South Jordan.

“You don’t have to only be the best of the best at everything,” Hale says; Utah has seen so much success from its diversity of industries and collaborative economy.

“We focus a lot of our energy on helping people find jobs,” Zundel says, “but we do it to help our families out.” That togetherness and collaboration was part of why Procter & Gamble liked Box Elder County and stayed and expanded there.

Utah has now received the Enterprising States Project Award two years in a row from the U.S. Chamber of Commerce. The award compares all 50 states across 30 metrics, Hale says, and those metrics are split into six categories: economic performance, exports, business climate, technology and entrepreneurship, talent pipeline and infrastructure.

“Utah was not top in any one category,” Hale says. Instead they were among the top five in five of the categories and sixth in the other one. Utah is the only state to be among the top 10 in all categories ever, and they have now achieved that feat two years in a row.

Down to Business

• From 2006 to 2013, Utah has incented the creation of more than 19,000 jobs.

• Utah’s Recycling Market Development Zones offer incentives including tax credits on machinery and operating expenses and technical assistance from experts to qualifying recycling businesses located inside the zones.

• Utah’s state corporate tax rate is a flat 5 percent across the board.

• Utah is a right to work state.

Industries and Innovations

“The thing that has made Utah what it is is the diversity of our economy — specifically the diversity in our tech economy,” Hale says. He lists The Boeing Co., Hexcel Corp., IM Flash Technologies LLC, Intel Corp., Micron Technology Inc. and eBay Inc. among Utah’s technology and STEM companies.

IM Flash manufactures flash memory devices, and Hale says IM Flash holds 12 percent of the nanoflash market because their flash memory is the world’s fastest.

Xactware Solutions, Inc., received an incentive from GOED in 2012, and the ribbon cutting for their state-of-the-art building took place in May. Photo: Matt Weir of Xactware

ATK Aerospace is capable of testing many kinds of composite materials, which Dilg says has attracted many spinoffs or symbiotic companies. Autoliv is one of the biggest ones, and they manufacture automobile parts including airbags; Autoliv has more than one site in Box Elder County, and their airbags are in almost every car that has one, Dilg says.

She also mentions HyPerComp Inc., which develops computing tools for use in electromagnetic, hydrodynamic and magneto-hydro engineering and Optimum Composite Technologies LLC, which manufactures composite materials.

Steel is a big metal in Box Elder County. “We have three Nucor Steel plants, Vulcraft does trusses for big box store roofs, and GEM Buildings competes with Nucor’s building systems,” Zundel explains.

One other big metal in Utah is copper, and there is a mine outside the city limits of South Jordan. “It’s the largest open pit copper mine in the world,” Preece says. “You can see it from space.” The Rio Tinto Kennecott mine also yields some gold, silver and molybdenum.

Utah also processes food, and Malt-O-Meal, now known as MOM has recently merged with Post. Zundel and Dilg noted that there is a MOM manufacturing plant in Box Elder County. Post spent $1.5 billion on MOM in the merger.

“Life science is very active [in Utah],” Hale says. He notes Fresenius, Edward’s Lifesciences Corp., Varian Medical Systems, GE and Toshiba as examples of life science companies. He says Fresenius produces about 90 percent of the diabetic supplies in the world. Varian produces mechanical parts for CAT scan and MRI machines, and has announced a $40 million expansion that is expected to create 1,000 new high-wage jobs in Salt Lake City.

Merit Medical Systems Inc. and Ultradent Products Inc. are both in the eastern edge of South Jordan City. “Merit Medical has about 1,700 employees and Ultradent about 1,000,” Preece says. Merit Medial manufactures medical devices for heart surgeries and Ultradent manufactures both consumer dental products and products and hardware for dentists’ offices.

Outdoors and recreation businesses are also big in Utah. “We are the host of the outdoor retailers industry show here each winter and fall. It’s a huge economic boon to our state,” Hale says. Zundel and Dilg both cite examples pointing out their sport-shooting cluster in Box Elder County, and Hale points out Backcountry.com in Ogden.

Financial institutions are also thriving in Utah. “Our laws are favorable to industrial banks,” Hale explains. Goldman Sachs has a large presence in Utah, second in North America only to its corporate headquarters.
Talent and Education

“Our unemployment is down around 3.4 percent, which creates, obviously, some workforce challenges,” Hale says. “It’s a nice problem to have.” To solve that problem in the long term, Utah has created a “robust STEM education program” and poured $30 million into it over the last two years, he explains.

Utah public school students use iSchool technology to help them learn science, technology, engineering and math (STEM). Photo courtesy of GOED.

In the short term, they are marketing out of state in various tech centers “to hopefully entice some workers to come to Utah and take a job here,” Hale says.

Utah’s universities and community colleges are nearly all inside the Salt Lake Valley, which is about 80 miles long, north to south. Therefore Brigham Young University, the University of Utah and Utah State University are all in proximity to each other, and can be reached in well under an hour from the center of the valley.

Utah has a high density of college and high school graduates, and South Jordan has an even higher percentage than the rest of the state. In South Jordan, Preece says 38.4 percent of the population over age 25 has at least a bachelor’s degree and 96.4 percent of that population has a high school diploma.

“We have actual rocket scientists here,” Zundel says of Box Elder County. ATK has been attracting scientists and engineers to the rocketry field since the 1950s after all, as Dilg points out.
Assets

“The ecosystem that the governor has created [is] one of the things that have made Utah so attractive,” Hale says. Gov. Gary Herbert has been governing Utah since 2009 and has been promoting the collaborative economy.

“The legislature and the governor have purposefully tried to create an environment in which it is good to do business,” Hale says. They call themselves Silicon Slopes.

In August, Varian Medical Systems broke ground on new construction that will expand its current Salt Lake City manufacturing facility and allow for the consolidation of operations currently underway outside of Utah to ultimately create 1,000 new full time jobs in the state over the next 20 years. Photo courtesy of GOED.

Being a center for the technology industry, Utah has room for data centers. EBay has a large data center in South Jordan. “The Daybreak folks have got a good backbone of Internet and power running into the place with the idea of attracting other data centers,” Preece explains.

Running east to west, I-80 dives through the center of the Salt Lake Valley, providing a crucial road for trade in and out of the state. Going north and south, I-15 provides another.

Salt Lake City International Airport services the whole area, and is within much less than an hour’s drive away from most of Salt Lake Valley.

Transit trains connect the municipalities to each other; for example, South Jordan City has two Trax light rail stops and one FrontRunner high-speed commuter train, as Preece says.

Outdoors and Recreation

Alkali Ridge is a National Historic Landmark site in San Juan County, where intrepid visitors can view archaeological remains of the earliest form of Puebloan architecture from 900 C.E. to 1100 C.E.

Lifestyle

“Mother Nature has been very generous to Utah,” Hale says. “We have beautiful country here.” That beautiful country drew $7.5 billion in tourist money into the state in 2014, he says, and more than a billion dollars in state and local taxes.
Box Elder County is also home to the Bear River Migratory Bird Refuge, one of the country’s largest bird refuges.

Utah is also home to a myriad of ski resorts and other outdoor recreation, from hiking on trails inside and outside of the cities, to bicycling events like the Larry H. Miller Tour of Utah, to fishing, to golf, to watersports. The skiing is of course where the “slopes” half of Silicon Slopes comes from.

“One thing that seems to happen is,” Preece says, “people locate companies where the boss wants to live.”

More Info

Utah Governor’s Office of Economic Development
Box Elder County
City of South Jordan

Illustration by hyena reality at Free Digital Photos.net

Rachel Hamilton

Rachel Hamilton is a freelance writer based in Lawrence, Kansas. She can be reached at rachelelizabethm@gmail.com.

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