Watch your back, Silicon Valley. Utah is coming.
A recent report from Engine and the Kauffman Foundation showed that the Provo-Orem cluster was 11th in the country for information and communications high-tech startup density.
The Salt Lake area was a close 12th. That makes Utah one of the leaders in high-tech startup growth in the nation. The Wasatch Front is part of a growing trend with several other states and their urban areas thriving in innovations and technology growth.
"For the third straight year, Forbes ranked Utah No. 1 as the best place for business. That is no accident. Business continues to benefit from Utah's stable environment and educated workforce," Gov. Gary Herbert said at the January State of Utah address.
He also has said repeatedly that "Utah is where it's at" and Silicone Slopes -- coined by a Utah Valley entrepreneur -- is thriving along the Wasatch Front.
"With companies like Adobe and Microsoft expanding in northern Utah Valley, and eBay and Oracle in southern Salt Lake Valley, this area is rapidly becoming an IT hub," Herbert said.
According to the joint study released in early August, he may be right -- with some clarification.
Data backs up the governor's message SEmD to an extent -- and Utah County leaders say the vision of a strong technology hub in Utah along the Wasatch Front is becoming a reality.
"The city of Orem is not surprised by the Kauffman Foundation's finding that Orem is a leader in communications and technology startups. As the birthplace of many of this country's great technology innovators, we continue to foster the growth and development of tomorrow's ideas by way of relationships with Utah Valley University and its business resource center, expansion of fiber infrastructure throughout the community and by encouraging fledging technology businesses to grow and develop in Orem," Orem city manager Jamie Davidson said.
The king of the hill still is Silicon Valley in California. Together with Greater San Francisco, this power hub accounts for $10 billion, or 40 percent of all dollars invested in the U.S., and nearly one third of all venture capital deals.
Provo-Orem accounts for $162 million with the Salt Lake City area showing an investment of slightly more than $100 million. Consequently, northern California is the home to thousands of startups compared to Utah's hundreds.
Greater contenders than Provo-Orem are the high tech clusters located in Maryland, Colorado and the Northwest. That may change soon, as high tech startups grow exponentially in Salt Lake City and Utah County.
"One thing that we like to do is get out of the way and let businesses do their thing. We think there is a role for government and oftentimes we try and play that role; and that is as facilitator to remove the road blocks. But the other thing that we do is we try to foster a pro business environment and attitude. We try to get to the 'yes' rather than the 'no,'" economic development director Dixon Holmes said.
The U.S. Chamber of Commerce Foundation published its annual "Enterprising States" study in April, rating states by its policies to support small business. What they found underscores the joint study Engine and the Kauffman Foundation just released.
The USCCF used five policy performance areas for its rankings -- exports, the business climate, innovation and entrepreneurship, infrastructure and talent supply.
Utah was unique, receiving a top 10 finish across all of the five policy areas and in a sixth area for overall economic performance and growth.
Encouraging business and investing in the state's future as an ITC high tech hub reflects what the Engine and Kauffman Foundation study uncovered, that the trend is toward high-tech clusters growing in urban areas.
Ian Hathaway, an economic adviser for Engine, said a fertile environment for fostering a cluster appears to have one or more of three characteristics: they are well-known tech hubs with highly skilled work forces, they have a strong defense or aerospace presence and they are university cities.
With its two major universities, Camp Williams, a strong National Guard presence and a well-educated work force, the Provo-Orem area was listed as 20th in the nation for venture capital investing in Hathaway's summation.
Beyond those three characteristics of a high tech hub, there is the entrepreneurial environment and culture. Dixon said he has gotten to know what appeals to entrepreneurs.
"The high-tech sector likes the urban environment. They like things a little bit gritty, non-traditional. They like different things going on, things that are eclectic; and Provo downtown offers that variety, some of that environment," Holmes said.
Another tidbit from Chris Mims of Quartz while reporting on the study showed that the Provo-Orem area creates more than twice as many high-tech startups as the national average.
Brigham Young University and Utah Valley University have become entrepreneurially progressive, giving students the tools and knowledge to forward their success. Dixon said the two entities are collaborative and work together, bouncing ideas off of each other.
There is also Camp 4, an incubator housing incubators for startups, as well as shared offices found at Innovation Networks and the Provo Dojo for young companies. Accelerated learning programs for creating the needed computer programmers for the high tech industry have also been established within the Dojo and Camp 4.
And then there is Google Fiber, which has established Provo as one of its pilot cities.
"We just don't know the effect that Google Fiber is going to have. We haven't plumbed the depths of the possibilities there," Holmes said.
By following failure rates and employment numbers, studies have shown that small non-tech private businesses as a whole lose as many or more jobs than they create, while the high-tech startups create more jobs than they destroy. In other words, high tech startups drive job creation leading to a healthy, vibrant economy.
"My vision for Utah remains steadfast: Utah will continue to lead the nation as the premier business location that provides opportunity for all Utahns. Thanks to Utah's economic engine, we are well on the road to economic prosperity," Herbert said.