Utah’s Tech Economy: What the new Gardner Institute Research Means

Pete CodellaArticles

On July 30, leading technology organizations gathered at the Kem C. Gardner Policy Institute for the unveiling of a new research report authorized by the Utah Legislature titled “Utah’s Tech Economy — Volume One: Economic Impacts, Industry Trends, Occupations, and Workers.”

The report is authored by Levi Pace, a senior research economist at the Gardner Institute at the University of Utah, and is available on the Gardner Institute’s website. It summarizes contributions to Utah’s economy in 2018 by the tech industry, defined as information technology capabilities and support services.

Volume two, due in four-to-six weeks, will provide an abbreviated four-decade history of Utah’s tech economy, going back to the days of WordPerfect and Novell in Utah County. The two-volume report will illuminate an evolving and rapidly growing innovation economy in a large and diverse collection of industries and companies that contribute significantly to Utah’s economy.

Salt Lake and Utah counties provided more than 80 percent of tech industry jobs in Utah. Silicon Slopes is part of the story, but, as detailed in this week’s report, a map showing tech company locations in Utah (figure 1.2; data from Utah Department of Workforce Services and other sources) reveals there are tech companies in every county in the state, except Daggett County. Tech companies operated last year in 143 cities and towns throughout the state. However, the map doesn’t include locations of self-employed IT professionals.

The report delineated the compensation differential between Utah’s tech sector and other industries. In tech, the average compensation last year was 80 percent higher than in other industries ($106,100 versus $58,500). If you want a high-paying job, finding your way into Utah’s tech economy is one way to meet that goal.

Looking at Utah, compared to other states’ average annual tech industry wage last year, we ranked eighth, following states ranked from one to seven as follows: California, Georgia, Indiana, Massachusetts, Michigan, Ohio and Oregon

According to the Gardner report, “Utah’s relatively lower tech wages compared with both the U.S. average and states with the largest tech sectors may reflect the attractiveness of Utah’s quality of life, cost of living and labor affordability advantages to workers and employers.”

In other words, locating tech jobs in Utah still provides a value-added proposition for companies, whether it’s a headquarters, second headquarters, satellite office or remote workers.

With the fast growth of Utah’s tech economy comes challenges. A drive on I-15 in northern Utah County will demonstrate some of those roadblocks first-hand.

Utah needs to ensure a bright future for its children, and providing an opportunity for students in K-12 to learn computer science is part of that puzzle.

As a state, we need to strengthen pathways for women and non-white workers to build greater diversity in Utah’s tech industry as well as every other sector.

Utah’s economy continues to have a strong correlation between the construction and retail industries to the tech industry. “Besides its direct economic activity, the tech industry supported indirect and induced activity outside the tech industry that amounted to 191,939 jobs, which contributed $11.0 billion in earnings and $16.7 billion in GDP in 2018… …construction depended the most on the tech industry. Just over one-fifth of construction jobs were supported by tech industry activity in Utah.”

Utah is uniquely poised to capitalize on its Silicon Slopes brand. The state continues to be an attractive place for tech companies to do business, and the growth of the industry helps fuel Utah’s economic success.

As we look to tomorrow, with continued automation and forthcoming autonomous transportation, building a workforce with strong information technology skills will help weather future economic storms.