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op quiz. What does the following list of technological innovations have in common?
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- The first electronic hearing aid (Harvey Fletcher)
- The first red-green electric traffic light (Lester Wire)
- The first electronic television (Philo Farnsworth)
- The first electronically-amplified guitar (Alvino Rey)
- The first computer game (Nolan Bushnell)
- The first computer graphics (Professors Evans and Sutherland)
- The first artificial arm (Stephen Jacobsen)
- The modern word processor (Alan Ashton & Bruce Bastian)
- ARPANET (precursor of the Internet)
- The first artificial heart (Dr. Robert Jarvik)
The answer is that all the above were developed in Utah or by Utahns.
Add to the list the many famous tech companies founded by Utahns including Pixar (Ed Catmull), Adobe (John Warnock), Silicon Graphics and Netscape (Jim Clark), Novell, Iomega, Folio, MegaHertz, and others.
The technology industry has long been an important component of Utah’s economy… as history shows Utahns are natural entrepreneurs and problem solvers… and indications are that technology will continue to pace the State’s economy for years to come.
For instance, Utah ranks 17th nationally among the 50 States, the District of Columbia and Puerto Rico, 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. Utah also ranks 12th in electromedical equipment manufacturing employment, 13th in Internet services employment, 13th in software publisher employment, and 17th in communications equipment manufacturing employment, according to the report.
Raw numbers tell Utah’s tech story, too. Currently 5.3 percent of the state’s employment is in the tech sector. And Utah exported about $1 billion in high-tech goods in 2005, accounting for approximately 16 percent of the State’s exports.
Today more than 4,300 information technology and life science companies operate in the State, an increase of 10.4 percent from Sept. 2005 to Sept. 2006. Among the western states, only Oregon had a faster percentage gain. When measured by tech companies per capita Utah has 1.86 tech companies per 1,000 residents, nearly 47 percent higher than the U.S. average. Combined, Utah’s tech and biotech companies employ nearly 63,000 Utahns and generate more than $3.4 billion in annual wages.
This vitality has attracted the admiration of many outside the State. A report from Kansas City’s Kauffman Foundation… the most prominent keeper of the America’s entrepreneurial flame… named Utah as tops for economic dynamism, second in investor patents, four in fastest-growing firms, and fifth in venture capital.
All this in an affordable place to do business. Princeton, N.J.-based site selection firm The Boyd Co., in a recent survey of the cost of doing business, ranked 50 metropolitan areas using such variables as wages, the cost of utilities, real estate, equipment, and corporate travel, and found Salt Lake City to be the 11th most affordable.
USTAR
Technology leadership can just happen to a State. Witness what Microsoft has done for the Puget Sound and Washington State. But absent a company like Microsoft, or the yeasty and unique environment of Silicon Valley, ongoing technology leadership is something that must be planned for and nurtured. Utah’s government leaders realized this and in March 2006 enacted and funded Senate Bill 75, aka the Utah Science Technology and Research economic development initiative (USTAR).
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A plasma disruption in Fusion Data |
USTAR is meant to enhance collaboration between Utah’s tech companies and Utah’s universities, with special emphasis on areas where Utah already enjoys competitive advantage. The goal is to get ideas out of university labs and into commercial markets, and thereby increase the number of high-quality, high-pay jobs in Utah. The preliminary target areas for the University of Utah and Utah State University facilities include: Nano-technology – bio-sensors; Biomedical device, innovation; IT networks and memory; Imaging technology; Diagnostic imaging; Personalized medicine; Circuits of the brain; Fossil energy; Bio fuels; and Directed energy sensor initiative.
Teams for these target areas, some of which will employ 50 or more scientists, researchers, lab assistants, and graduate assistants, will be housed in newly-built research facilities with state-of-the-art laboratories, at the University of Utah and Utah State University—the state’s |
leading research institutions. Another five Innovation Centers with close ties to the research teams will be located at other higher education facilities so as to spread research and business creation throughout the State.
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, according to a study by the Bureau of Economic and Business Research.
Although the investment amount will total $200 million, it wasn’t such a hard sell for the State Legislature. The core premise of USTAR, in fact, is a formalization of what has already happened informally in Utah for years. During the past 20 years, more than 180 Utah companies and technologies were spun out of the State’s university labs. 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.
Venture Capital
Venture capital deal flow in Utah was down 78 percent to $109 million in 2006, according to MoneyTree Venture Capital Profile for the United States, a survey by Pricewaterhouse Coopers / Venture Economics / National Venture Capital Association.
Because Utah’s active entrepreneurial climate leaves so many deals unfunded, in January 2003 the State Legislature enacted the “Utah Venture Capital Enhancement Act” popularly known as the Utah Fund of Funds. The Utah Fund of Funds was created to enhance the venture capital culture and infrastructure in Utah and increase venture capital investment in the state.
“The Fund’s goals include encouraging the availability of venture capital in the state and helping to build a significant, permanent source of capital available to serve the needs of Utah businesses. The legislation states that the Utah Fund of Funds shall invest its funds in private venture capital funds and not make direct investments in individual businesses, thus allowing seasoned investment professionals to make prudent investment decisions,” according to Utah Business Magazine.
“The legislation provides $100 million in contingent tax credits to assist the Fund of Funds in seeking new capital investment. The tax credits [are] used as a backstop for investments in the Fund to ensure a return in investment. The objective is to repay investors from the Fund’s long-term performance and not to utilize the contingent tax credits.”
Infrastructure
Utah’s infrastructure is still sparkling and gleaming after the makeover it got leading up to the 2002 Winter Olympic Games. Pre-Games projects included an expansion of Salt Lake International 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, more than half-dozen state-of-the-art Olympic venues were built.
But the State’s growth has brought new demands on the existing infrastructure. An example is Daybreak, a massive residential real estate development being developed by Kennecott Land in the Salt Lake Valley’s west side. The first phase of this development, which started in 2004, involves 4,100 acres and will eventually have more than 13,000 homes. The development, which is on the largest piece of privately-owned land next to a U.S. city, will take decades to fully build out. For the sake of comparison, Kennecott’s land in the Salt Lake Valley is twice the area of the city of San Francisco.
With this development comes opportunity to rethink traditional notions of homebuilding. The homes being built at Daybreak are ‘greener’ and more energy efficient and the neighborhoods are built to be more liveable and walkable. And all the homes built there 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. Technology leadership can be found even in the homes of Utah.
Utah and its citizens have been innovators since before 1921, when Philo Farnsworth, an intellectually-curious farmboy from Utah looked at the field he’d just plowed and saw in the parallel lines the solution for how to make electronic television work. Thanks to bold government initiatives, superior technology training at its universities and colleges, its access to venture capital, its up-to-date infrastructure and its well educated, well trained workforce, Utah further the innovative legacy of people like Farnsworth and continue to play an important role in the world of technology. |
