GOED Releases Study Findings of Utah’s Strategic Industry Clusters

Pete CodellaNews

The Utah Governor’s Office of Economic Development (GOED) commissioned the Kem C. Gardner Policy Institute report on “Utah’s Strategic Clusters: Performance, Benefits, Workforce Needs and Rural Utah.” The report evaluates Utah’s six strategic clusters’ performance before and since inception relative to the rest of the state’s economy and their performance nationwide. The findings were released during a rural legislative retreat at Snow College in Richfield, Utah last week. Leaders met to discuss these challenges and ways we might be able to overcome them.

Utah’s strategic clusters were designated in June 2005 and became the focus of economic development efforts at GOED. The report analyzes the clusters’ resilience during the Great Recession, its recovery, supply chain effects and assesses prospects for future growth. It evaluates the performance before and since inception relative to the rest of the state’s economy and relative to cluster industry performance nationwide. More importantly, determining if the six identified clusters are still those we should focus on, or if new clusters should be considered.

Highlights from the report include:

  1. In 2017, employment in Utah’s strategic clusters represented 16.6 percent of total state employment.
  2. From January 2001 through June 2005, employment in all clusters combined grew at a compound annual growth rate of 0.3 percent, much slower than non-cluster employment.
  3. The Software and Information Technology, Life Sciences and Finance clusters have performed the best since 2005, with growth rates exceeding those of the other clusters, as well as the rest of the economy.
  4. Since the clusters were identified in 2005, combined, they have grown about one-third faster than the rest of the state’s economy, contributing about 20 percent of total state employment growth.
  5. The top 25 occupations in the Aerospace and Defense cluster account for 61 percent of total cluster employment and 53 percent in the Life Sciences cluster.
  6. Across all of Utah’s strategic clusters, over the next five years, the most significant labor force needs are likely to be for software application developers, market research analysts, marketing specialists, computer and information systems managers, computer support specialists, and systems software developers.

Though there were many positive findings, Utah still has improvements to make with its clusters and rural areas. While some clusters have grown faster than the rest of the economy, others have stagnated or declined. Aerospace and Defense, Energy and Natural Resources and Outdoor Recreation have all increased more slowly than the rest of the economy.

The study determined the state may want to include transportation and distribution among its strategic clusters.

Due to isolation and lower education and skill levels, Utah’s rural counties provide challenges for cluster-based development. The challenges include increasing the educational attainment and skill levels of residents to expand their professional options, but it may not improve outcomes for rural places if there are not sufficient local opportunities.

However, rural broadband and the airports found in most rural counties could provide avenues for growth. On the positive side, all but Rich and Summit counties have at least one public airport. There are 41 higher-education campuses across the 25 rural counties, providing opportunities for residents to build their skills.

“Utah’s Strategic Cluster report is an excellent resource for the state and will benefit GOED’s economic development efforts,” said Ginger Chinn, GOED managing director of business services. “This report gives us a better understanding of our workforce needs and opportunities for improvement.”

For more information, access the full report from the Kem C. Gardner Policy Institute.