A Small State with an Expanding Global Footprint: Utah is the Place for Foreign Direct Investment.
Salt Lake City was once simply a layover stop for people travelling across the country, but in the last decade it has figuratively become a giant for growth in the United States, proving it can compete on a global stage and triumph as an international business destination. For those who have not been to Utah, this may seem unlikely.
“Unlikely” is a word that can be easily associated with Utah. It is notable that a state of three million people was able to increase the number of businesses that sell goods abroad from less than 1 per cent to just under 4 per cent in the past five years, and that during a recession. It is surprising that an estimated 20 per cent of jobs in Utah are export related and it is unique that Utah exports have nearly tripled since 2007. All of this activity has occurred in a state that accounts for less than 1 per cent of the nation’s total population.
What initially may seem like a conundrum can be explained by looking at the effort and resources the State of Utah has dedicated to becoming an export supportive economy and global business destination. Utah is convenient to get to. It is massively multilingual. It is business friendly, predictable, welcoming and increasingly diverse.
After bursting onto the international stage in 2002 with the only profitable Olympics in decades, state officials and the business community have picked up the international torch and have not stopped running. In the heart of the economic downturn Governor Gary R. Herbert set the audacious goal to become the nation’s best performing economy and be recognised as a premier global business destination. At a time when things looked bleak, it was a lofty goal. Then he followed that goal with a challenge to the Utah business community to accelerate the creation of 100,000 jobs in 1000 days.
Five years have passed since Governor Herbert threw down the gauntlet to set Utah apart as a national leader and international business hub and it is clear that Utah was up for the challenge. The state has been widely recognised as a best place for business and careers and international companies have chosen Utah as the place for their US expansions. Most recently, Utah beat the job creation challenge and has now built more than 103,000 jobs in less than three years. Being recognised as a premier global business destination is no longer a goal, but a reality.
Part of the Beehive State’s success can be attributed to another unlikely aspect – its diverse economy. Utah is credited with having the fourth most diverse economy in the nation. With manufacturing in the north, tech firms in Provo-Orem, mining/oil and gas in the eastern region of the state and leisure and hospitality in Summit County and southern Utah, it is clear Utah is not a one trick pony.
In fact, Salt Lake City was named ninth on a recent international ranking of the top 25 cities for Global Trade, and as one of the 15 best new cities for business by Fortune Magazine.
These accolades have come as a result of a colossal push by the state to cultivate new business and expand its international presence by bringing in industry leading companies like Adobe, Goldman Sachs, OOCL, Procter & Gamble, Boeing, ATK and eBay to name a few.
UTAH’S RESOURCES
Utah has rich resources available to companies interested in growing internationally. The International Trade and Diplomacy Office housed in the Governor’s Office of Economic Development has an experienced local staff and employs in-country trade representatives who are available to provide advice and connections to companies looking to export and investors looking to fi nd safe and productive places to put their capital. The office also organises six to eight trade missions a year. Most recently the Governor led a delegation of businesses and government leaders to Mexico and Brazil with the purpose of capitalising on new investment opportunities and building an even stronger trade relationship with one of the state’s closest neighbours.
And on the topic of international trade, Utah’s international presence is strong. Exports from Utah totalled $16.1 billion in 2013 of which $7.6 billion were value-add exports. From 2009 to 2013, Utah’s exports grew by 35.8 per cent, compared to the national average of 29.5 per cent. As a result, Utah businesses that exported goods were able to employ more than 150,000 Utahns across all sectors of our state’s economy.
Utah businesses have customers in over 195 countries. International trade in Utah – both exports and imports –supports 350,000 Utah jobs. And Utah is also multi-lingual, with more than 130 languages spoken in the course of business every day.
Other resources Utah provides for international expansion include university and federally supported Small Business Development Centers, 14 state-supported Business Resource Centers that provide “one-stop” business services and World Trade Center Utah, one of only a handful of “certified” world trade offices in the country. The list of support services goes on with the Utah District Export Council and a State Trade and Export support programme for new firms just starting into or growing exports (STEP). Utah’s comprehensive export assistance network opens the international marketplace for small businesses, which Utah has in large supply in some part due to the focus universities are placing on entrepreneurship.
The University of Utah is a one of the top universities in the nation in creating successful start-ups and Utah’s five other universities have programmes dedicated to growing successful entrepreneurs. This focus on entrepreneurship has bred success, and provides a pipeline for potential investment.
INCENTIVES
It is important to Utah to keep home grown companies in the state while also recruiting new companies. To this end Utah offers a highly successful post-performance refundable tax credits – economic development tax increment financing (EDTIF) incentives – to both companies that want to expand and those that would like to relocate to the state.
Companies such as Boeing, Procter & Gamble, Merit Medical, Edwards Lifesciences, Adobe, Oracle and IM Flash are a few of the notable companies that have received incentives to expand in Utah. The incentives Utah offers are not its lead recruiting card; Utah’s energy and real estate costs are low, its healthy young workforce is constantly recognised as exceptionally productive, and the state’s quality of life is considered second to none. With these factors, a competitive incentive seals the deal.
UTAH IS GROWING AND INVESTORS ARE CALLING
Realising the potential Utah holds, people have been reaching out to enquire about what investment opportunities are available in the state. To quickly and efficiently serve the needs of these individuals, the Governor’s Office of Economic Development has created a registry for investors and companies looking to partner. Foreign Direct Investment (FDI) is actively being courted by the state and its partners. This database allows the state to connect investors to companies and then step out of the way and let the free market take its course.
Yet another benefit of investing in Utah is that financing is readily available. Utah is home to one of the largest banking centres in the country as measured by assets and deposits. It also has the country’s largest concentration of Industrial Loan Corporations (ILC), which are financial institutions in the US that lend money and may be owned by non-financial institutions. When companies are interested in setting up an industrial bank, they look to Utah. BMW bank, GE Capital and 18 other banks are headquartered in Utah. Many international financing firms have major offices in the state such as Goldman Sachs, Zions Bank and Wells Fargo.
UTAH’S CONTRASTS THAT MAKE IT SUCCESSFUL
Utah is a state that exports primary metals, sports equipment, and medical and IT devices. It is a state that houses world renowned companies, but also the mom-and-pop stores and start-ups that keep an economy vibrant. It is a state that incorporates its rich heritage into everyday life, but also looks toward the future and growth. Finally, it is an unlikely “David” that has entered the “Goliath” of the global arena and held its own.
Full of contrasts, Utah is a premier place to do business. If you have not considered doing business in Utah, you should. We invite you to see for yourself at the Utah Global Forum event in Salt Lake City on 23 September 2015 – www.utahglobalforum.com
