Silicon Slopes

Silicon Slopes refers to the metropolitan area that primarily originates in the Salt Lake City, Utah metropolitan area but also includes Provo, Utah and Park City, Utah and surrounding areas. Served by the Salt Lake City International Airport and less than a two hour flight from Silicon Valley, CA, Silicon Slopes has been mentioned in news media, including NPR coverage about the NSA Utah Data Center in the region.

In reference to California's Silicon Valley, Utah's "Silicon Slopes" encompasses a cluster of information technology, software development, and hardware manufacturing and research firms along the Wasatch Front. In particular, this grouping includes memory process technology companies SanDisk and the Intel/Micron joint venture IM Flash Technologies, video game software development companies EA Sports and Disney Interactive Studios and data analysis software including Adobe Systems.

It is one of a growing number of technology communities (List of places with "Silicon" names) and technology centers (List of technology centers) gaining their status from their relationship to or similarity with Silicon Valley, California. Other examples include "Silicon Forest", a technology community in Hillsboro, Oregon, a suburb of western Portland.

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Silicon Slopes' Salt Lake City Winter Skyline

Origin of the Term

The term ‘Silicon Slopes’ is the brainchild of Josh James (founder and CEO of Domo) for the purpose of creating a branding campaign to promote Utah’s growing technology community. The nickname is derived from the famous “Silicon Valley”, substituting Utah’s mountains (slopes) for Northern California’s Santa Clara valley.

History

Utah did not simply become a great attraction for high tech business overnight. It has a long history of government contract work and innovative local businesses that were early players in the tech industry. These foundations were built on over the years to establish Utah’s ability to become a leading technology center. Utah also has a strong Internet backbone and Google Fiber is now available in Provo and soon to be available in Salt Lake City.

Government Partnerships

Utah has a long history of partnerships with the U.S. Department of Defense that have contributed to laying the groundwork for the state's high-tech business environment and infrastructure. David C. Evans, a native of Salt Lake City, was one of the original pioneers of computer science in Utah and its groundbreaking work with the DoD. During the early 1960's, Evans worked as the head of the computer science department at the University of California at Berkeley, where he was also in charge of the university's work for the Pentagon's Advanced Research Project Agency (ARPA). In 1965, Evans was recruited back to Salt Lake City to create a computer science department at the University of Utah, and he brought his DoD contacts with him, including Ivan Sutherland. Evans and Sutherland continued their work on ARPA for the DoD with their colleagues in California and helped to establish ARPANET, an "early packet switching network and the first network to implement the protocol suite TCP/IP." Both of these technologies form the technical foundation of the internet. In 1969, the University of Utah was one of the original four nodes of ARPANET, cementing its place in military and technological history.

Due to this early partnership with the DoD, Utah was able to encourage more joint ventures with the military. Not only was Utah capable of developing high-tech infrastructure, many geographic and natural characteristics were appealing to the DoD. Utah is geographically isolated from both the east and west coasts, providing higher security and less vulnerability to attacks. Utah also has a low incidence of large-scale natural disasters and wide open spaces that provide enough room for chemical weapons testing and drone pilot training.

Some notable Utah partnerships with the U.S. military include Hill Air Force Base, Utah Test and Training Range, Dugway Proving Ground, and the Tooele Chemical Agent Disposal Facility.

In recent years, Utah has also become home to a growing number of big data processing centers. Some of these are government partnerships, such as the largest NSA data storage facility in the U.S. located in Bluffdale, Utah. In order to meet the demand and facilitate more partnerships, the University of Utah recently added a new Big Data certificate program within its School of Computing. The program began in the Fall of 2014. Utah is already ahead of the curve in the national trend on big data, and training students how to understand the technicality of big data analysis will continue to attract business and military operations to Utah.

Local Tech Businesses

Utah has many examples of local tech businesses that arrived early and helped attract more start-ups to the area. Evans & Sutherland, founded in Salt Lake City by David Evans and Ivan Sutherland in 1968, is the world's first computer graphics company and has "developed advanced computer graphics technologies for almost four decades." Evans was also head of the computer science program at the University of Utah during this time, and mentored many students who would become tech giants in their own right: Jim Clark, founder of Silicon Graphics, Inc; John Warnock, a co-founder of Adobe; Alan Ashton, co-founder of Wordperfect; and Edwin Catmull, co-founder of Pixar.

Novell, Inc. is an example of a Provo software company that became a giant player in the technology world in the 1990’s. Novell was founded in 1979 by Ray Noorda and began producing software to hook desktop computers together so they could share peripheral devices, like printers and hard disks. As the price of desktop computers began to fall, Novell was perfectly positioned to capture the market with its Netware program. Microsoft developed its own program, but it was too late and too far behind Novell's progress. In the early 90's, Novell controlled 65% of the market for network operating systems and was a powerhouse in the high-tech industry. Although Novell has declined in the current tech world, it is responsible for attracting many new start-ups and capital and helped pave the way for the technology-rich economy the Salt Lake valley is experiencing today.

Past Political Leadership

Governor Michael Leavitt (1993-2003) was instrumental in luring many tech companies to Utah. During his time in office, Leavitt made monthly trips to Silicon Valley and used his slogan, “We have workers, we have space, we have proximity”, to increase his influence there. He specifically highlighted the challenges facing the Silicon Valley region: natural geographic boundaries and traffic congestion. Utah, he maintained, was the place to grow with ease. Leavitt was a key factor in enticing eBay to locate their main customer service center in Utah and in bringing in new research operations for Intel. Governor Leavitt laid the groundwork for his successors to build on his achievements and continue to make Utah a business-friendly state, particularly for high-tech companies.

Banking History

Utah’s economic stability is also reflected in its history as a center for industrial banks and as a secondary financial hub for investment banks like Goldman Sachs that encourage venture capitalism in the state. Industrial banks, also known as Industrial Loan Corporations (ILCs), are a niche form of banking that is nearly exclusively located in Utah. Examples of Utah ILCs include BMW Bank, Pitney Bowes Bank, and Target Bank. Due to this distinction, Utah is the fourth-largest center for state-chartered banking in the nation with nearly $280 billion in assets within its borders.

Utah's industrial banks began in the early 1900's before Congress passed the Bank Holding Company Act of 1956, which severed the ties between banking and commercial corporations. Utah's ILCs were grandfathered in, so Utah's industrial-bank charter is not subject to the Bank Holding Company Act. This means that the ILCs are not regulated by the Federal Reserve; they are overseen by the FDIC and Utah's Department of Financial Services. This allows the banks to be free from more onerous federal regulation and also allows them to be more responsive to changes in the economy. By providing sound oversight in this area of banking, Utah has built credibility in the marketplace and earned a distinguished reputation in banking. This has helped to create the pro-business climate that is very attractive to venture capitalists and start-up technology companies.

Evidence of the prominence of the Silicon Slopes tech industry is the growing amount of venture capital coming into the area. In the first nine months of 2014, the dollar-per-deal average in the Silicon Slopes was the highest in the country at an average of $51.3 million per deal. This high average can be attributed to big deals with key players such as Qualtrics and Domo. Qualtrics, a customer analytics software firm, brought in $150 million in venture capital funding in September 2014.

Economy

Utah has continually ranked number one for best state for businesses. There is a continuous focus to create partnerships between businesses, government, education and communities. The Governor’s Office of Economic Development is based on Governor Gary Herbert’s commitment to economic development statewide. In the most recent State New Economy Index, performed by the Kauffman Foundation in 2010, Utah was ranked first in the nation for Economic Dynamism and inventor patents, while placing third in fastest growing firms.

Notable companies

• 1-800 Contacts
• Adobe
• Ancestry.com
• Authorize.Net
• Backcountry
• Bluehost
• Boostability
• DevMountain
• Domo
• Entrata (Property Solutions)
• IM Flash
• Impartner
• InsideSales.com
• Instructure
• Jive
• LANDesk
• MaritzCX
• Micro Focus (formerly NOVELL)
• MokiMobility
• MX
• Nature's Sunshine
• Nu Skin
• ObservePoint
• Overstock
• Pluralsight
• Progrexion
• Proofpoint
• Qualtrics
• Solutionreach
• Swipeclock
• Usana
• Vivint
• Workfront
• Xactware

Notable government facilities

• NSA Utah Data Center
• Hill Air Force Base
• Utah Test and Training Range
• Dugway Proving Ground
• Tooele Chemical Agent Disposal Facility

Economic Development

Utah’s economic stability has grown to meet the standards of the tech giants that occupy the Silicon Slopes area made possible in 2009 by Governor Gary Herbert who focused on four cornerstones to strengthen the economy of Utah: jobs, energy, education and self-determination. Governor Herbert credits the economic momentum in Utah to collaboration between corporate and government partnerships. The Governors Office of Economic Development, led by Spencer P. Eccles, coordinated with Governor Herbert to build on the economic development cornerstones, calling it economic development 2.0. The updated objectives to help sustain the economic growth in Utah, allowing the Silicon Slope regions to expand, strengthen and grow existing Utah businesses, increase innovation, entrepreneurship and investment, national and international business, and prioritize education to develop the workforce of the future.

Demographics

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Fall colors in Utah

Location, Climate and Geography

Utah's location is very enticing to both companies and employees. With the Rocky Mountains very close, many activities are available year-round. Four distinct seasons offer year round activities including skiing, hiking, and rock climbing. Utah also has many national parks including Zions National Park, Bryce Canyon National Park, Canyonlands National Park. Salt Lake City is a Delta Airlines hub and is perfectly situated to allow for business day trips from Silicon Valley due to direct, 90-minute flights that cut travel expenses and limits travel time.

Utah offers many incentives that are more attractive than other cities in the Western region: the cost of living is lower than Seattle or Portland; the climate is not as hot as Phoenix or Albuquerque; geographic proximity is closer than Austin, allowing for less travel time and cost; and the ski slopes can be reached in less than an hour, unlike Denver.

Culture

With Salt Lake City as the headquarters for The Church of Jesus Christ of Latter Day Saints, the "Mormon culture" is predominant within Utah. This has both positives and negatives for attracting technology companies to the state. Utah workers have a reputation for being hard-working, dedicated, and loyal. This "Mormon work ethic" is attractive to tech executives because the workforce in Utah is known for its reliability and stability. Silicon Valley workers are notorious for short job tenure and frequently bouncing between multiple tech ventures. However, workers in Silicon Valley are also willing to stretch themselves to the limits - working extreme hours and participating in marathon sessions over weekends and holidays when deadlines are looming. They spend a lot of time after work together as well, making connections and forming networks. "Mormon culture" values family over all else, and many Silicon Slopes workers are unwilling to put in the same amount of hours as their counterparts in Silicon Valley, and they are much less likely to spend extracurricular time with their coworkers.

"Mormon culture" can also explain the diverse and multi-linguistic workforce. Thousands of young Utahns serve missions for their church around the world and return to Utah with language skills they are able to apply in their education and future workforce participation. Mormons also tend to marry early and are more likely to have larger-than-average families. They value education and encourage their children to go to college and earn degrees.

Workforce

Utah boasts a highly educated, technologically proficient, multilingual workforce, speaking over 130 languages. Many residents of Utah lived and worked abroad which contributes to the flexibility and capabilities of immediately contributing to companies. Utah also maintains the youngest population in the United States due to its higher-than-average birth rate. The median age in Utah is 29.6 years, compared to the nationwide median of 37.3 years. This young labor force is very attractive to employers as baby-boomers throughout the nation retire and many states are unable to replenish their workforce due to falling birth rates.

Schools

Prominent schools that contribute to the workforce in the State of Utah consist of Brigham Young University, University of Utah, Utah State University, Utah Valley University, Weber State University, and Westminster College. In the early 2000s, the Utah Legislature allocated around $100 million to the state's universities in order to bolster their computer science programs and significantly increase the number of graduates in the field. The universities also provided matching funding and created many new courses and areas of technological study. Computer science graduates continue to rise in Utah, with Northern Utah universities boasting 663 graduate students in 2013, up 47 percent from 2009. Of the six schools listed above, students graduating in Computer Science with a Bachelor Degree have risen 44 percent since 2009. Students graduating with a Master's Degree rose 46 percent and those getting Doctorates increased by 61 percent. These computer science programs are garnering interest due to demand from the companies found in the Silicon Slopes. As of August 2015, the Utah Technology Council achieved "mainstreaming Computer Science" in high schools by allowing students to take credited rigorous Computer Science courses as a Science credit option.

Nationally Ranked Programs

The University of Utah’s Entertainment Arts & Engineering undergraduate program is No. 1 for game design in the U.S., and its graduate program consistently ranks in the top three according to The Princeton Review. The EAE program began in 2007 and is an interdisciplinary program between engineering, computer science, and fine arts. It has professional facilities and a motion capture system that allows students to have real-world experience, making them very attractive to game developers and tech companies upon graduation. Beyond video games, students also produce games and apps that are used in a wide variety of industries, especially in the medical field. The EAE program collaborates closely with the Center for Medical Innovation at the University of Utah.

BYU also has a strong computer science program, and its Center for Animation is regularly ranked among the top five schools for animation in the U.S. The program began in 2010 after a wealthy homebuilder, Ira A. Fulton, purchased a supercomputer for the school, allowing them to produce top quality animation. Many of the faculty members came from companies such as Disney, Pixar, DreamWorks, and Warner Brothers. Student-produced films win regular awards and have been screened at many film festivals, including Sundance and Cannes.

The University of Utah and BYU are also both ranked within the top 25 schools for entrepreneurship according to The Princeton Review. The Rollins Center for Entrepreneurship and Technology at BYU is ranked No. 2 in the U.S. It first began in 1971 and now focuses most specifically on tech start-ups. Over the past ten years, students of the program have started 196 companies and have attracted more than $772 million in funding. The entrepreneurship program at the University of Utah began in 2004, and it is currently ranked at No. 24. Over the past ten years, its students have started 167 companies and raised nearly $750,000. The program continues to be strengthened, and at the start of the fall semester in August 2016, Lassonde Studios, an institute that combines 400 residences with a 20,000-square-foot garage (used for building prototypes and holding events and conferences) will be opened to create a hub for innovators, makers, and entrepreneurs of all disciplines to connect.

Infrastructure

A key contributor to the Silicon Slopes' successful tech industry is the well-planned Internet infrastructure. Salt Lake City is in a fortunate geographic location because it sits along the major east-west Internet corridor where ten major service providers inter-connect with each other and deliver high-speed services to the area. This "internet backbone" is a critical aspect of Utah's high-tech industry success.

In Provo, the city government started planning a fiber-optic Internet infrastructure in the late 1990s. This high-speed Internet system was funded as a private-public partnership called iProvo and construction was completed in 2006. Google Fiber later acquired iProvo in 2013 and now offers Internet speeds up to 1,000 mbps for businesses and households.

In response to the high-tech industry located in Salt Lake City and its relationship with Provo, Google officially announced in March 2015 that Salt Lake would be one of the next places to receive Google Fiber. Construction is currently ongoing, but significant progress has been made, and residents and businesses will soon be able to sign-up for lightening-fast internet service. Requests for business permits in the area have drastically increased in response to the soon-to-be-available service.

Corporate Recruitment

The State of Utah has offered a variety of incentives to encourage large tech companies to call Utah home, and the Silicon Slopes uprising would suggest that these perks have been motivating. The Utah Governor’s Office of Economic Development allows a variety of grants and tax incentives to companies willing to either relocate or expand their enterprise, depending on the stability of the company and the types of jobs that are being brought to the state. From the state’s perspective, they are trying to attract companies will positions that require a high level of education or skill to motivate Utah graduates to remain here in the state and help drive economic growth.

Numerous publications and studies rank Utah as one of the top "best states for business" and most "fiscally fit" In the U.S. Chamber of Commerce's "Enterprising States" report, Utah ranks in the top five in every export category and was the only state to finish in the top 10 for all six metrics. Utah tops Governing Magazine's list of the best managed states.

Corporation Requirements

To qualify for the tax benefits or grant programs associated with the Silicon Slopes region, there are specific guidelines in place to determine if the state will offer incentives to encourage relocation. These incentives are evaluated on a case by case basis by the Governor's Office and the Executive Director. Some of these standards include the industry the company is in, historical successes of the company, revenues that are raised and the types of jobs that were created. The jobs that are being brought in need to require specific qualifications and maintain certain salaries to maintain a well-educated, professional workforce within the state. To monitor these qualifications, grants and tax credits are only awarded after each corporation has proven its ability to provide the jobs and revenue required.

Rural Development

A motivational factor for the State of Utah to provide incentives to corporations for expansion or relocation is the development of rural areas or deteriorating regions. The Silicon Slopes region is located between two of Utah's largest metropolis, Salt Lake City and Provo. Historically, this area has been largely underdeveloped- with the exception of the much smaller cities of Alpine, Highland, American Fork, Lehi, Pleasant Grove, Lindon, and Orem City- being the largest, with a population of less than 100,000. To accelerate the development of this area and surrounding areas, the Governor's Office of Economic Development (GOED) established the Economic Development Tax Increment Financing (EDTID) tax credit.

Additionally,the Utah Office of Rural Development created the Utah Enterprise Zone Tax Credit to motivate business to choose locations that would benefit these rural areas. These credits can compound depending on employee wages compared to surrounding businesses, and are structured to encourage strong economic growth and professional retention to the area.

The United States Department of Agriculture (USDA) has also partnered with the State of Utah to provide other motivating factors to prospective employees of Silicon Slope companies. Homes can be purchased with specifically structured mortgages that require little to no down payment, and can include extra financing to update or refurnish older homes.

References