This article is part of a weeklong America 360 series on Salt Lake City—The New West.
SALT LAKE CITY — If you drive out of downtown Salt Lake City and travel southwest for about 20 minutes past subdivisions and strip malls, you’ll eventually notice a massive open-pit copper mine in the distance, set against the backdrop of Utah’s snow-capped mountains and brilliant blue sky.
This particular mine has operated for more than 100 years in the resource-rich state. And for many of those years, the Utah economy propped itself up by exporting copper and gold and relying on agriculture. Now, the land-locked state is trying a seemingly outrageous feat. Utah no longer just wants to be known simply as the home to the 2002 Winter Olympics or the headquarters of the Church of Jesus Christ of Latter-day Saints. It also wants to earn a reputation as a business-friendly state that teaches its local companies—from miners to computer chips makers to cosmetic brands to medical device manufacturers—to sell their products internationally and molds them into exporting powerhouses. “We’re running economic models to figure out which countries can buy what Utah is making,” says Vincent Mikolay, managing director of business outreach and international trade for the governor’s office of economic development.
Five years ago, less than one percent of the Utah’s businesses sold goods abroad. Now, that’s jumped to just under four percent, according to state officials. They, like Mikolay, hope that that growth is only the beginning of a trend. Utah companies now sell goods to Canada, China, Japan, Taiwan, Germany, Thailand, India, Mexico, Switzerland, Belgium, and Singapore, among others. In 2009, Utah exported roughly $10.3 billion worth of goods (roughly half which came from mining). This year, the governor’s office of economic development estimates the state is on track to double that amount.
The goal of the governor’s economic team is to increase the number of Utah businesses that sell goods abroad as a way to both diversify the economy and give local businesses a broader set of customers. Focusing on exports makes sense for the region because, for one, many of Utah’s Mormon residents already speak another language fluently and have spent serious time abroad, thanks to the church’s emphasis on two-year international missions. Secondly, teaching Utah’s businesses to export helps the state capitalize on the value of goods it already makes; it’s another way to bolster business without having to just rely on luring new companies to the area and offering the typical economic development sweeteners like tax breaks.
For the businesses themselves, the export push has opened up new markets. Just ask Natalie Kaddas, general manager of her second-generation, family-run company, Kaddas Enterprises. Based in Salt Lake City, the thermoforming plastic manufacturer employs 22 workers. They make plastic parts, both custom and pre-designed, for utility and transportation companies. Their most popular product is a plastic device called a ‘Birdguard’ that covers power lines and poles so that birds do not interfere with the lines and cause outages.
About a year ago, Kaddas started to work closely with the governor’s economic aides to expand the reach of her family business outside of the U.S. She traveled with a group of other Utah executives on trade missions to Mexico and Israel (the latter happens to have the same migratory bird patterns as Salt Lake City, she says). Now, she’s focused on finding new clients in Latin America and the Eurozone. In 2013, the company did just under $1 million in international sales out of total sales of $3.5 million. “It’s caused us to rethink our markets,” she says. “Having an international focus was not our strategy until last year.”
Utah and Salt Lake City are not the only places joining the race to become local exporters. In 2010, the U.S.’s 100 largest metropolitan areas produced roughly 65 percent of the country’s export sales, according to research from the Metropolitan Policy Program at the Brookings Institution. While the overall economy continued to shed jobs in 2010, export-related jobs in the U.S. increased by 6 percent. In Utah, they now account for roughly 20 percent of the state’s jobs, says Natalie Gochnour, the Associate Dean of the David Eccles School of Business at the University of Utah.
The challenge for Utah officials is to maintain the rate of growth for exports in the coming years. Economic development officials also need to continue to support mining exports (which account for the bulk of the state’s export revenue) while pivoting and growing the state’s other burgeoning sectors. Outside of mining, some of the state’s top exporters include a medical device manufacturer, a cosmetics company, and a chemical company that is a division of Unilever. By 2015, the current Utah governor, Gary Herbert, would like half of the exports to come from land resources like mining and half to come from the other areas.
That’s a big goal for a state economic development office that’s been allocated just $2 million for the international exports program. For local business owners, like Kaddas, the effort has changed the trajectory of her business. “Those international opportunities were never available for me before,” she says. “This has opened doors.”
What We're Following See More »
The House has completed it's business for 2016 by passing a spending bill which will keep the government funded through April 28. The final vote tally was 326-96. The bill's standing in the Senate is a bit tenuous at the moment, as a trio of Democratic Senators have pledged to block the bill unless coal miners get a permanent extension on retirement and health benefits. The government runs out of money on Friday night.
The Senate passed the National Defense Authorization Act today, sending the $618 billion measure to President Obama. The president vetoed the defense authorization bill a year ago, but both houses could override his disapproval this time around.