WHY IS UTAH CALLED THE SILICON SLOPES?
What do Vivint Solar, Ancestry.com, Qualtrics, Omniture, and Domo have in common? They are all tech start-ups in Utah worth $1 billion or more. The entrepreneurial spirit has swept across California and hit Utah in dramatic fashion. According to TechCrunch, $1 billion of private investment has been invested in Utah in the last 18 months, ranking in at number 9 on the top most investment in the U.S. In all the flurry, Utah is no longer just the Beehive state, but many are calling it the Silicon Slopes, a spin-off from the famous Silicon Valley in Northern California. So what factors have put Utah in the number 9 position and climbing?
Talent, Low Taxes, and Affordable Real Estate
The bulk of the commotion takes place mostly between Lehi and Provo, nested right between two great sources for talent: the University of Utah and BYU. Firms don’t have to look too far to build a great sales force or accounting department. Even the large cap investment bank Goldman Sachs has established a large operations office in Salt Lake City in recognition of Utah’s talent. The Utah culture also facilitates the ability to retain talent. People in Utah are less likely to leave because their family is often here and they enjoy the environment.
As of 2013, Utah has the 20th lowest overall tax rate in the nation. Its property tax rate is the 33rd highest in the nation and its corporate income tax rate is 27th highest. However, the state has a higher-than-average corporate income tax rate ranked at 17th. The lower tax rate makes it much more attractive for companies to start up here. In addition, Utah’s cost of living is comparatively cheap, especially in relation to some of the central hubs for business in the U.S. such as New York, San Francisco, and Chicago.
Real estate prices are also a large incentive for companies, evidenced by large companies like Adobe who are building vast complexes. Lehi was mostly farmland not too long ago, but has grown rapidly, now housing companies such as IM Flash Technologies, iTOK, and Adobe.
Sure, there are no big household names such as Apple, Facebook, and Google, but no one can deny that the Utah economy is growing fast. About $300 million was invested in 2013, and that number jumped up to $800 million in 2014.
One struggle has been to find talented senior management willing to move to Utah to run these companies; but with all the growing opportunity, that has become a more minor obstacle. Also, you can’t ignore the beautiful scenery and proximity to the airport. Utah is home to various national parks, mountains, lakes, and almost every other outdoors adventure you could ask for.
With Utah’s strong talent base and attractive financial attributes, it’s easy to understand why people are calling it the Silicon Slopes.