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he technology industry has long been an important component of Utah’s economy, and indications are that its |
position in the state’s economic hierarchy is likely to increase in the coming years.
The birthplace of such legendary technology companies as WordPerfect, Novell, and Iomega, Utah today finds itself ranking 17th nationally for per capita employment in the high-tech industry, according to Cyberstates 2006: A Complete State-by-State Overview of the High Technology Industry, a study by the American Electronics Association (AeA) of the 50 states, plus the District of Columbia and Puerto Rico. The AeA report also notes that Utah ranks 12th in electromedical equipment manufacturing employment, 13th in Internet services employment, 13th in software publisher employment, and 17th in communications equipment manufacturing employment.
Another indicator of technology’s role in the state’s economy is the acceptance of Utah products around the world. Utah exported about $1 billion in high-tech goods in 2005, accounting for roughly 16 percent of the state’s exports.
Today, more than 3,200 information technology companies operate in the state, employing 41,000, with another 500-plus life sciences companies operating in Utah and employing 18,500.
In its November 2005 issue, Fast Company magazine identified what it called the nation’s 10 “fastest” cities. These were cities the magazine said had the highest rates of growth in what it called the “creative class,” which included scientists, engineers, artists, managers, and high-paid professionals. Salt Lake City was listed as one of the ten “fastest” cities, and scored particularly high in the talent and technology categories.
Princeton, N.J.-based site selection firm The Boyd Co., in its most recent survey of the cost of doing business, conducted for the biomedical industry, ranked 50 metropolitan areas using such variables as wages, and the cost of utilities, real estate, equipment, and corporate travel. Salt Lake City was found to be the 11th most affordable.
USTAR
Utah’s technology future looks especially promising, making the state an excellent location for companies looking for places to expand. Part of this promising future is due to the establishment of USTAR—the Utah Science, Technology, and Research economic development initiative. Created by an act of the state legislature in 2006, the USTAR initiative will build, recruit, and fund carefully targeted, world-class science and technology research teams. The teams will be focused in specific disciplines, including genomics, where Utah already has competitive advantages.
These teams, some of which will have 50 or more scientists, researchers, lab assistants, and graduate assistants, will be housed in new research facilities with state-of-the-art laboratories, at the University of Utah and Utah State University—the state’s leading research institutions. In addition, five Innovation Centers with close ties to the research teams will be located at other higher education facilities. These will promote research and business creation throughout the state.
The Bureau of Economic and Business Research projects that over the next 30 years, USTAR could generate $4.9 billion in new external research funds, 422 new companies, 123,400 jobs paying $62 billion in salaries, and $5 billion in new tax revenues for the state. |
USTAR is, in fact, a continuation of a history where university research and business creation have long be strongly linked. During the past 20 years, more than 180 Utah companies were founded on university technologies. Most of these continue to prosper, and today are important players in the state and national technology marketplaces. These include Myriad Genetics, HyClone Laboratories, Sorenson Communications, NPS Pharmaceuticals, Watson Laboratories, and Evans and Sutherland. Funding for USTAR includes $25 million a year over the next 10 years.
Venture Capital
Utah had $248 million in venture capital investments in 2005, up 23 percent from the previous year. During the first quarter of 2006, Utah was 15th among the 50 states when ranked by number of deals and 16th by money raised, according to MoneyTree Venture Capital Profile for the United States, a survey by PricewaterhouseCoopers/Venture Economics/National Venture Capital Association. Utah placed higher than such larger states as Arizona, Ohio, and Minnesota. In November 2005, Fast Company magazine wrote about Salt Lake City, “The money local VCs have available to invest in the past five years has grown from $75 million to $700 million.”
Mountain West Capital Network reported that overall Utah financial transactions in 2005 were $9.2 billion, well over twice 2004’s total of $3.9 billion. These figures include not just venture capital deals, but also mergers and acquisitions, public offerings, and others. The biggest aspect of these financial transactions was 32 merger and acquisition deals worth $6.9 billion.
Insfrastructure
Utah has as up-to-date infrastructure as can be found. In preparation for hosting the 2002 Winter Olympics and as part of ongoing improvements, a number of infrastructure projects were completed, including an expanded airport, rebuilt freeways, a new light-rail public transportation system, an expanded convention center, as well as new hotels, restaurants, and shopping venues. And, of course, there were Olympic venues that were constructed.
The expansion of state-of-the-art infrastructure has continued during the time since the Olympics. An example is Daybreak, a massive residential real estate development being developed by Kennecott Land in the Salt Lake Valley. The first phase of this development, which started in 2004, involves 4,100 acres that will eventually have over 13,000 homes. The development, which will take decades to fully build out in all its phases, is on the largest piece of privately owned land next to a U.S. city and will be twice the size of San Francisco.
It was announced in late 2005 that Kennecott Land and Qwest will partner to provide fiber optic connections to all homes built at Daybreak from that date forward. The homes will have three strands of fiber optic lines running directly into them that allow Internet connections at a speed of 5 megabits of data per second. The fiber optic lines will carry both video and data. This is an example of the technology leadership to be found in Utah.
Another project that has garnered national attention is UTOPIA (Utah Telecommunication Open Infrastructure Agency). A consortium of 14 Utah cities, UTOPIA is deploying and operating a 100% fiber optic network to every business and household (about 140,000) within its footprint. UTOPIA is a publicly owned fiber network.
Through government initiatives, superior technology training at its public and private universities and colleges, its access to venture capital, its up-to-date infrastructure and its well educated, well trained workforce, Utah is today a technology heavyweight. It has been an important world player for the past quarter century or more, and continues to have an important presence in the world of technology. |
