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A Small World

Utah is a Global Business destination and export leader

By Gaylen Webb

Utah’s regional leadership derives from a combination of business best practices and geographical centrality at the crossroads of the western United States. It makes sense: Despite being far from the coasts and the nation’s borders, Utah has also positioned itself as a global business destination and a leader for trade and diplomacy. Understanding Utah’s global leadership requires a closer look.

Utah State Capitol and Salt Lake City at night

The independent research firm Pollina Corporate Real Estate articulated Utah’s success in 2012 when it ranked Utah the No. 1 pro-business state in the nation. Pollina said, “Utah has positioned itself as a leader in export growth, in part as a result of the collaboration between private sector exporting companies and the state’s commitment to growing Utah’s presence in the international marketplace.”

Collaboration

As Pollina recognized, becoming a leader in export growth requires a significant amount of collaboration between the private sector and the state. It also requires coordination, efficiency and effectiveness. “We call the formula C2+E2, which equals success for Utah,” says Spencer Eccles, executive director of the Governor’s Office of Economic Development (GOED).

Creating an ecosystem of support has helped the State double its exports over the past five years and has lured companies with international operations, including eBay, Goldman Sachs, Oracle and Procter & Gamble. Forbes cited that ecosystem, among several other assets, when it ranked Utah the No. 1 state for business for the third consecutive year.

The ecosystem of support actually involves many factors and many organizations. One specific factor Forbes points to is the foreign language skills of Utah’s young, educated workforce, one-third of which speaks a foreign language. Other factors include Utah’s stable, predictable, business-friendly environment; low taxes; low energy costs; exceptional quality of life; international airport; inland port; foreign trade zone; and the global reach of its businesses and world-class universities.

Coordination

GOED’s International Trade and Diplomacy Office (ITDO) directs Utah’s coordinated effort to help businesses flourish in the global marketplace. Harvey Scott, ITDO’s director, says GOED works with its partners — the World Trade Center Utah and the U.S. Commercial Service — to help Utah companies access and thrive within the global marketplace.

“Our responsibilities are to help companies that have never exported before to understand how to get in the game, how to understand the risks, how to build an international business development plan and then support them in those efforts,” he explains. “We also help companies that are new to market, meaning companies that have exported to one market but now want to enter a new market. We will help them leverage their strategy for the previous market to build a strategy for the new market.”

Diplomacy

Diplomacy is also a major portion of ITDO’s work. Brett Heimburger, ITDO’s regional director for Asia, explains that businesses in many countries aren’t interested in making connections with their foreign counterparts until they have established relationships of trust.
“In many of the Asian countries, for example, relationships are the most important part about doing any kind of deal. Establishing a relationship is key. Consequently, the purpose for many of our trade missions and diplomatic visits is to develop and foster those relationships. If the foreign leaders feel comfortable doing business in Utah, they will recommend that their companies go to Utah to find the right partner.”

Just such an experience happened recently when His Excellency Harold W. Forsyth, Ambassador of Peru to the United States, visited Utah. “At first he was a bit standoffish,” explains Scott, “but the fourth day of the visit he was directing his people from the embassy in Washington, from Peru and from California, where his major representatives for trade are located, that they needed to come to Utah and they needed to engage with us here because there are some great and wonderful things happening.”

As Scott points out, the Forsyth experience is not unique. “It happens over and over as diplomats come, as VIPs come — at first they are standoffish, but after they see what is happening in Utah they are enthralled with the State and what we are doing here and then they return again and again.”

Trade Relationships

The economic and social ties Utah shares with Peru are now helping Utah businesses establish important trade relationships in the country. It’s these economic and social connections that Utah shares with other countries that make the State unique.

Franz Kolb, ITDO regional director for Europe, Middle East, Africa and India, points out that Utah has shared a productive relationship with Saarland, Germany, for more than 12 years. Germany is Utah’s 12th largest trading partner and Saarland’s economic impact is vital to both Germany and to Utah. In fact, Utah shares many of the same economic clusters with Saarland, including life sciences, nanotechnology, information systems and renewable energy. Saarland has also been a member of the Utah Information Technology Association for more than six years.

Kolb recently returned from a mini trade mission to Saarland, where several Utah companies accompanied him. “Saarland is not only important to Utah for trade, but also as a springboard to other markets. Over the past 10 years, many Utah companies have used their relationships in Saarland as the launch pad into other European markets,” he says.

In addition to developing economic and social ties through trade and diplomacy, ITDO also works to assist international companies looking to invest in or establish partnerships with businesses here in Utah, says Heimburger. Numerous foreign companies have made strategic investments in Utah. One of the most recent is a company from Estonia that has made a significant investment in Utah’s energy-rich Uintah Basin, where the company is working to produce oil in the region.

Magic Happens

Magic happens when the supportive nature of a state government committed to expanding international trade collaborates with private sector businesses and institutions to help build the economy. In Utah, the result is a state government-private sector partnership that has eliminated many of the regulatory roadblocks to growth and has reduced the tax burden.

One needs to look no further than IM Flash Technologies, headquartered in Lehi, Utah, to see how a business can thrive under such an ecosystem.

IM Flash is a global leader in the innovation and manufacturing of NAND flash memory. The company was formed in 2006 as a joint venture partnership between Intel Corporation, based in Santa Clara, Calif., and Micron Technology, Inc., based in Boise, Idaho. In need of a manufacturing facility, Micron and Intel scoured the globe, but realized they had everything they needed right here in Utah.

Micron had previously built a 2.3-million-square-foot manufacturing facility in Lehi, which it had mothballed due to business conditions in the memory market. The facility was readily available for the newly formed company. Through a partnership and great support from the State of Utah, IM Flash was able to start up the facility in record time and attract the top talent needed to be successful.

“The ability to draw upon the population of skilled workers in Utah as well as strong partnership with local universities and community colleges proved to be a critical factor in IM Flash’s growth and success. The company maintains close partnerships with schools and other institutions to foster and strengthen the pipeline of talent for engineers, physicists, materials scientists and other skilled workers in the state,” says IM Flash Co-CEO Keyvan Esfarjani.

NAND flash memory is currently one of the fastest-growing segments in the semiconductor industry, thanks in no small part to the demand for applications that use NAND flash memory, such as consumer electronics, removable storage and handheld communication products. Today, IM Flash leads the world in producing the most innovative and least expensive NAND memory products. Its products command 18 percent of market share and appear in electronic devices across the globe.

“Technology scaling and innovation is the core part of our strategy and business success. We have led the industry over the last three technology generations and we are now producing our products at the 20 nanometer dimension with the best reliability in the industry,” says Esfarjani.

Computer components account for Utah’s second-largest export category (second only to precious metals), totaling approximately $6.8 billion in export value. To be sure, IM Flash’s NAND flash memory products are a big part of the computer components that Utah companies export across the globe. Moreover, IM Flash’s technology is enabling other Utah companies, such as consumer electronics companies and data centers, to be successful.

Supporting STEM

“With our leadership comes responsibility and involvement in the community,” says Esfarjani.

IM Flash is heavily involved in the State’s growing tech sector and educational community. For example, the leadership team is actively engaged and supportive of the Utah Technology Council, Utah Valley Chamber of Commerce and other non-profit boards. IM Flash is an active supporter of STEM and K-12 education in math and science. In fact, IM Flash recently initiated and funded a math immersion program in Alpine School District to promote student interest in math. Further, IM Flash leaders work closely with the engineering departments in Utah’s universities to help them design courses that produce workers with the knowledge and skills that the technology industry requires.

“Partnerships like ours are truly unique and rarely successful. With my Co-CEO Jason Dunn, we are able to leverage the best practices of Micron and Intel into our own world-class product placement and development, manufacturing technology leadership and high-quality production. This truly makes IM Flash unique,” Esfarjani explains. And the company’s Lehi headquarters is at the epicenter of it all.

Indeed, IM Flash has developed scores of manufacturing firsts in terms of best practices that are leading its technology development and manufacturing processes. “The company is a global model of innovation, productivity, collaboration and effectiveness, which is a significant achievement for any American company in today’s global marketplace,” says GOED’s Spencer Eccles.

Annual Insight Award

As a confirmation of its leadership and innovation, in April 2012 IM Flash’s industry-leading 20 nanometer (nm) NAND flash memory was named Semiconductor of the Year in the 10th Annual Insight Awards hosted by UBM TechInsights. The Insight Awards recognize achievements in the semiconductor and electronics industry and are one of the most highly regarded awards for technical innovation. Devices are analyzed by UBM’s team of experts and are subjected to a rigorous judging process.

IM Flash’s leading-edge 20nm NAND flash process technology and products are enabling new breakthroughs in storage for consumer and computer applications. The 20nm process is used for high capacity, multilevel cell (MLC) NAND flash devices, which are in volume production today. They provide a dense, small form factor storage option for saving music, video, e-books and other data on smartphones, tablets and computing solutions such as solid-state drives, explains Esfarjani.

“IM Flash’s technology is well ahead of the competition, and we are pleased that Utah’s business-friendly environment has helped this great company to grow,” says Eccles. “IM Flash is demonstrating in living color what can happen through collaboration and cooperation, efficiency and effectiveness.”

Collaboration as a “best in Business”

Christopher M. Conabee, GOED managing director for corporate recruitment and incentives, adds that IM Flash’s management and ownership style is not only an example of collaboration and cooperation, but so is the company’s collaboration and cooperation with the State of Utah. “We have been able to assist the company with sufficient incentives to help it grow and have provided a stable, predictable business environment with a focus on quality education and low tax and operating expenses that have allowed IM Flash to flourish in Utah like it could in no other place.”

Collaboration and coordination are key factors in Utah’s ability to lead the nation in export growth. They are also driving factors in growing Utah’s “Silicon Slopes” technology sector, which has welcomed companies like EMC, Adobe, Oracle, eBay, Microsoft and the hundreds of small supplier companies that have clustered around them. More than 3,000 IT and software companies are now centered in and around the core of Utah’s Silicon Slopes, an area that extends from northern Utah County into southern Salt Lake County. Not surprisingly, IM Flash is at the center of it all.

Introducing Utah to the World Through Trade Missions

“The theory of ‘six degrees of separation’ is more like two degrees in Utah,” says Harvey Scott, director of the International Trade and Diplomacy Office (ITDO) in the Governor’s Office of Economic Development (GOED).

What Scott means is that Utah’s population is so connected internationally that the idea of everyone being connected within six steps in a chain of “a friend of a friend” relationships has been reduced to two steps in Utah. Perhaps that’s why foreign trade missions are so important and so successful for Utah.
Scott says the trade missions are critical to expanding ties and opening doors for Utah businesses. Further, they are also essential to achieve Governor Herbert’s goal of positioning Utah as a global leader.

Foreign trade missions are especially beneficial for Utah companies that are new to market, or new to exporting. The fact that the Utah businesses are in the country, meeting the people, meeting the executives and government officials and creating relationships makes it much less risky for the Utah businesses.

“They can measure the benefits and costs and make informed decisions about whether they want to do business in the country,” Scott observes. “Our leadership in terms of making the right connections in these countries around the world where Utah can have success is truly making Utah one of the premier global destinations for business.”