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Export West: Utah is the Place!

Utah’s three large metropolitan areas generated more than $10 billion dollars worth of exports in 2008.  At 11.2 percent of the metros’ total production, this equated to an export intensity almost one full percentage point higher than that of the nation’s top 100 metro areas. And even more strikingly, the three metros of the Wasatch Front--the eight-county megapolitan region stretching along I-15 from Ogden-Clearfield in the north, through Salt Lake City and to Provo-Orem in the south--grew their exports by more than 70 percent each from 2003 to 2008.  National exports, in comparison, grew by only 46.2 percent.

Metropolitan Utah’s export competitiveness is just one of many findings to emerge from our recent work on the nation's metropolitan export strengths. And there’s much to learn by taking a closer look at Utah’s recipe for success, whose key ingredients--which include a deeply-ingrained entrepreneurial spirit, an outwards-looking culture, vigorous industry clusters, and an explicit and sustained policy focus--seem to have precipitated the foundations of a high-performance 21st century economy on the western edge of the Wasatch Range.

Firstly, the Utah export economy benefits in some important ways from the unique cultural and religious characteristics of the state’s residents--an entrepreneurial lot endowed with strong social capital, a particular business acumen (see this fascinating piece by Alan Wolfe of The New Republic), and a general worldliness, such that over 85 percent of Utah’s impressive export earnings in 2006 were generated by small and medium firms, according to the governor’s office. 

And in an increasingly globalized economy it could be the associated experience of mission--and the language, interpersonal skills, and contacts acquired abroad during a two-year stint in any of over 120 countries--that gives Utah business a leg up in the global market.  As a BYU professor shrewdly noted in a Wall Street Journal article on this very subject from 1996, “our competitive advantage is language.”  Over a decade later Utah’s erstwhile Gov. Huntsman was of the same mind: In 2008 he convened a Governor’s Language Summit of key stakeholders with the specific intention of “preparing the rising generation of global professionals in Utah” and “beginning an unprecedented movement toward the globalization of Utah's most important asset: its language-rich workforce.” And with over 52,000 young men and women living abroad on mission at any given point in time, added small business expert, David Birch, “Mormons have a friend in every city in the world.”  Such a network can’t help but facilitate trade.

Important as culture may be, however, Utah exporters have benefited from smart policy too--the second key factor in Utah’s success.  In 2008 the Pew Center for the States lauded Utah as the best-managed state in the nation.  Former Gov. Huntsman, previously CEO of an eponymous multinational chemical company and before that a deputy U.S. trade representative (who coincidentally spent two years on mission in Taiwan, is fluent in mandarin Chinese, and currently serves as the U.S. ambassador to China), made economic development a cornerstone of his policy suite, which the new Gov. Herbert has continued.  To achieve its goals the state has adopted a cluster-based economic development strategy that targets key industries like outdoor products and recreation, aerospace and defense (captured in Export West under transportation equipment manufacturing), financial services and software (captured under business, professional, and technical services), and others.  The Utah Cluster Acceleration Partnership--a collaboration between industry, government, higher education, and workforce leaders--convened this year to devise and now implement a strategy to grow the region’s aerospace and defense industries, with digital media and energy soon to follow. 

In this vein a whole host of institutions actively engage to bolster Utah’s clusters and the state’s competitiveness. Trade organizations like World Trade Center Utah and the Salt Lake Chamber, public-private partnerships like the Economic Development Corporation of Utah, and public bodies like the U.S. Commercial Service, the Small Business Administration, the Governor’s Office of Economic Development, and the Utah System of Higher Education, to name a few, recognize the synergies inherent in their respective missions and work together to advance a shared vision for the region’s economy. The University of Utah, for its part, spun off 20 companies in 2008, more than any other university in the country except MIT (which it tied).  Brigham Young University plays an important role in training the region’s international workforce and as a node in the LDS’s global network.  And the Salt Lake Community College has aligned course offerings with cluster workforce needs.

At first glance, Utah’s success might look less replicable than it actually is.  But despite some local peculiarities, metro Utah’s export prowess is built fundamentally on a few basics: a talented, entrepreneurial, and globally-minded workforce; vigorous industry clusters; strong institutions; and focused, strategic policymaking in key realms.  Other metro and state export strategies will need to be locally-tailored to maximize success and kick-start the nation’s sputtering economy, but it sure does seem to us like there’s something to be learned by looking to Utah.