Utah: Targeting Silicon
Valley's High-Tech Firms

Utah intends to benefit from the "negative congestion effects" plaguing Silicon Valley and other high-tech meccas; chief among these are the costs associated with wages, rents transportation and real estate. The Economic Development Corp. of Utah (EDCU, www.edcUTAH.org) has issued a blueprint for doing just that with the release of "Targeted High Technology Manufacturing Industries for Utah," a comprehensive analysis of the state's prospects for luring more New Economy businesses. The report, issued Aug. 31, 2000, was prepared by the Bureau of Economic and Business Research (BEBR) at the Univ. of Utah. EDCU is a private, non-profit organization seeking increased capital investment and job growth in Utah.
        High-tech industries of every stripe have a presence in Utah already, the report acknowledges. In fact, every high-tech industry under the Bureau of Labor Statistics' broad definition of the term is represented in the state. But a concerted business development effort will be successful only if key industries are targeted, which is the objective of the research report. (Gov. Mike Leavitt is championing efforts to bring more high-tech businesses to Utah and knows well the importance of a skilled work force in achieving that goal. At press time, the governor was lobbying legislators to support his proposal to spend $5 million to expand engineering and computer science programs at state colleges and universities. He hopes to double the number of graduates in such programs in five years and triple the number in eight.)
        Emerging from a list of nearly two dozen high-tech manufacturing industries are four deemed especially well suited for Utah. The report identifies as target industries computer and office equipment, communications equipment, electronic components and accessories and measuring and control devices. Researchers applied four criteria to the state's high-tech industries, the first of which identified which industries already have a presence in the state. The second criteria involved determining which of these industries also have a presence in Silicon Valley, which is estimated by the Milkin Institute to produce 10.9 percent of high-technology manufacturing in the United States. (Again, Utah is specifically competing with Silicon Valley, because state officials believe they can demonstrate significant cost advantages to industries the two locations have in common.)
        The third, somewhat more complex, criterion concerns so-called cost-push pressures in Silicon Valley. These pertain mainly to the cost of living and operating businesses in such regions. The report makes the point that service-producing, high-tech industries are less sensitive to rising cost pressures than goods-producing, high-tech industries.

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