Governor’s Economic Summit Keynote
April 10, 2012
I happened to catch a bit of the final round of the Masters on TV over the weekend. Did any of you watch?
Bubba Watson was in a sudden death playoff against a Louis Oosthuizen who had gotten a double eagle on a par five earlier in the round.
On the second playoff hole, Bubba hits it off the tee right into the trees.
Then, with his terrible lie, somehow Bubba manages to hook it out of the trees right onto the green, and two-putts the ball in to win his first major title.
I have to tell you – I have missed the fairway and ended up in the trees on a number of occasions – and my recovery shots usually turn out a little bit differently. Okay – a lot differently.
You know, they named it golf because all the other four letter words were taken.
I find a little comfort in the fact that, no matter how bad you are playing, you can always play worse.
What I love about golf is that each golfer determines his or her own success on the course, according to their individual skill and ability.
To play a great round, you need to be able to putt, you need to have a great long game and a great short game, and you have to be able to adapt your game to the conditions and environment.
Sure, you’ll make mistakes – I’ve lost count of the number of balls I’ve put in the weeds over the years – but golf teaches you how to bounce back.
From every round you learn a little, you improve and soon, that lost ball is a rarity.
It’s the same thing with business, and you entrepreneurs out there know what I’m talking about.
I think that’s why golf and business have forged such an enduring partnership. Win, lose or draw, it’s a great game. And I’m talking about business.
That’s why we are here today – to improve our business game.
To better understand the conditions and environment. To learn from losses and wins – from our successes and our failures.
And, as the Governor, let me tell you – you couldn’t be playing the game of business in a better state.
In fact, maybe you heard that Business Facilities magazine named Utah the 2011 State of the Year. That Arthur Laffer named Utah the state with the best economic outlook. Or that, for the second year in a row, Forbes named Utah the number one place for business in America.
If there’s one thing I want you to remember today as I share some success stories, is that Utah is something special.
What is our normal…is the world’s extraordinary.
Let me set the stage a bit so you can fully appreciate what I mean when I say what is normal for Utah is considered exceptional by the rest of the world market.
During my time as Governor, I have traveled around the country and the world -for trade missions, ambassador trips, and meetings with government and business leaders.
One thing has become readily apparent is that Utah is widely recognized as a great state for business.
Now, again, you expect the Governor to say that, but I am telling you, people out there, beyond our borders, people who know – they are saying it.
Business people and civil servants alike know us by reputation – the accolades, the data, and our results don’t lie.
Because we are regularly featured in magazines, on cable news channels, and in national economic reports, people are asking, “What makes Utah so successful?”
Better unemployment numbers come out, and Fox Business wants me on television to explain what we are doing in Utah.
Goldman Sachs expands here and Reuters sends two all-star reporters to my office – and the offices of other Utah leaders to dig a little deeper – asking why Utah?
Being here, doing business in Utah, we all understand exactly what sets Utah apart in the marketplace. But, because so many other places are just inching along, they want to know what is different about Utah.
Why does business want to be here? Why does business thrive here?
Today, as a special treat for this very distinguished audience, I am going to let you in on the secret of Utah’s success.
Put down your desert forks and listen closely – you may even want to take notes.
The secret of our success IS – that there is no secret.
In Utah, it’s really pretty simple. We follow the basics and we adhere to correct business principles in a free market environment.
It starts with how Utah’s government runs. As a state government, we can either foster a fertile field where companies are able to grow, or we can salt the earth with harsh regulations and onerous taxes that make success elusive.
While taxes may be necessary to keep state government running, they shouldn’t punish success. In Utah, we lowered taxes from 7% to 5% and instituted a flatter tax structure – and we haven’t made up the difference in increased fees as other states have done.
We understand that regulations are necessary to protect citizens and companies, but regulations should not be overly restrictive or nonsensical.
Because of that, last year I had my cabinet review every single business regulation on the books in Utah. As a result, we have now amended or eliminated 368 outdated and unnecessary regulations that were nothing but a drag on the economy.
This is just one example of many that I could give to illustrate that in Utah, we’re not just talking about these issues, we are taking action – we are doing it, and it matters.
It matters to Utah’s 85,000 businesses that we took action and reduced unemployment insurance’s maximum cap from 9.5% to 7.5%. That 2% reduction amounts to more $26 million in tax savings.
It matters particularly to those businesses who have suffered during the economic downturn.
I signed that tax cut bill at a small business location here in Salt Lake – Canyon Craft Cabinets. Canyon Craft Cabinets is owned by Chris Buckingham, who also employs three of his sons and a son-in-law.
Chris and his sons specialize in making beautiful European-style cabinetry. During the height of the housing boom, Canyon Craft was installing their custom cabinets at a rate of about one house per day. Now they are down to about one house per week.
Chris held on for as long as he could, but eventually, the slowdown in his business forced him to make layoffs. During our press conference, Chris recounted his story and the anguish that those layoffs caused him was still apparent.
He was emotional when he told us, “I hated the thought of taking away a man’s living.”
The layoffs Chris was forced to make to keep his business solvent also caused his unemployment insurance premiums to increase – adding another unwelcomed burden and additional expense.
The two point reduction in Chris’ unemployment insurance taxes will save Canyon Craft thousands of dollars in the coming years – money that Chris will use to help his business recover.
And, I am glad to report, that like many of our small businesses, today Canyon Craft Cabinets is recovering.
In Utah, we are constantly searching for ways to lessen the burden of government and get out of the way of the private sector – to keep government off our backs and out of our wallets, as I like to say.
In Utah, this just seems like common sense. To the outside world, they are “best practices” to those trying to emulate our success.
Those common Utah characteristics are things to which others aspire, but we see them as just the normal way to empower the private sector.
Our unique brand of achievement comes partly from our Western heritage. Utah combines that Western can-do heritage with an entrepreneurial spirit, a focus on innovation, a willingness to invest for the future, and the responsibility to live within our means and play by the rules.
The outcome is a growing economy.
Fueling the engine for that growing economy are the unprecedented partnerships we have in this state.
One critical partnership is the Governor’s Economic Council. Many of the Economic Council members are here today and I want to thank them for their meaningful and valued service to the State of Utah.
This is one focused group of people! The Council coordinates the state’s economic activities toward a singular vision, which is that “Utah will lead the nation as the best performing economy and be recognized as a premier global business destination.”
I’m counting on them to help us reach our goal of creating 100,000 jobs in 1,000 days.
It will take some heavy lifting and a clear vision, but we are giving it our all. For example, the Council supported an important initiative for rural Utah.
It is called the Business Expansion and Retention (BEAR) program, and it helps fuel business grow beyond the Wasatch Front by providing resources to support existing businesses in rural communities.
In October of last year, I embarked on a rural jobs tour which took me from one end of our state to the other.
I was amazed at the depth and breadth of the businesses finding success in the rural parts of our state.
I met with hi-tech firms and sophisticated manufacturing companies which would not be a bit out of place if they were here on the Wasatch Front.
I also met with entrepreneurs who were finding new and innovative ways to improve on activities that have been staples of the rural economy for generations.
A perfect example of this phenomenon is Bailey Farms International, located in the small town of Ephraim in Sanpete County.
Tom Bailey has been growing and selling hay for more than 25 years. Tom quickly realized he needed to expand his market reach in order to maintain profitability and expand his business.
Tom developed methods to compress and package hay to making it feasible to ship to overseas markets.
Today, Tom exports hay all over the world, and has found particular success in the Taiwanese and Chinese markets.
Tom now has three processing plants in Utah which employ over 60 people.
Beyond his direct employees, Tom buys hay from farms all over the state, and from surrounding states, and supports hundreds of farming and trucking jobs.
Utah businesses like Bailey Farms International demonstrate that the fundamental principles of innovation and hard work will bring success.
I believe that with the correct focus and by embracing fundamental principles, other states can replicate Utah’s success.
As I have already said, there is no secret – any state can do it.
They can achieve similar results by nurturing a fertile field where the seeds of entrepreneurship and industry can grow and thrive.
For a long time, people would say, “Utah? Where is Utah?”
Now they say, “Oh…Utah!”
As we celebrate the 10th anniversary of the incredible and very successful 2002 Winter Olympic and Paralympics Games, we are reminded that the world really did come to Utah.
They skied our slopes, met our people, enjoyed our culture, and watched Utah’s own win on our ice.
Just like Derek Parra did during the 2002 Games. (And Derek, thank you for your remarks on excellence here today.)
They then went home and told everyone what an incredible place Utah is. Some even came back to live here. Others brought their business here.
We are now reaping the fruits of that seed planted a decade ago.
I can’t tell you how many times my fellow Governors have noted Utah’s exceptional economic success.
And maybe I should admit – I get a certain pleasure from bragging just a little bit about our great State, and sharing a few helpful tips with my colleagues.
Because this isn’t a zero-sum game – there is plenty of opportunity to go around. We are not trying to get the biggest slice of the pie – Utah, and our sister states, are trying to find ways to expand and make a bigger pie.
That’s the beauty of federalism – 50 laboratories of democracy and innovation working to discover practices and policies that work, not just for states, but at the federal level as well.
This recognition by people and organizations outside Utah should not really be a surprise anymore. We have had the nation’s eyes and ears on us for a long time now, and it isn’t going away.
In fact, it’s keeping me pretty busy. In just the last few months, I have had the opportunity to participate in ground breakings, ribbon cuttings, and grand openings for new facilities all around the state.
Examples include companies such as EMC – the global leader in cloud computing – and eBay and Adobe which are expanding with full new campus facilities.
We cut the ribbon on Boeing’s vertical fin assembly for every new 787 Dreamliner now being built.
Or how about Hexcel, the carbon fiber production company, that makes the base material for some of the world’s highest-tech products – like these new airplanes. Hexcel is actually “expanding their expansion” – hiring even more people than they had originally thought.
I’ve already mentioned the Goldman Sachs expansion in Utah, but I’d like to share with you a note that Lloyd Blankfein, the CEO and Chairman of Goldman Sachs, sent to me a couple of weeks ago:
“Our Utah operation has, in the last few years, grown from a small Goldman Sachs office into the second largest Goldman Sachs operation in the US, second only to New York and we plan on expanding further. We’ve made this investment because of the highly educated, multi-lingual and productive workforce we have found in Utah.”
And that’s just what Goldman Sachs said. Let me tell you about a few more things that have been happening in Utah. We’ve seen IPOs from world-leading companies based in Utah, like Fusion-io and Skullcandy, and we have more IPOs coming in the near future.
It is also gratifying to know that Utah’s small businesses are getting in on the action. For example, Tesco Williamsen Manufacturing went with me on a trade mission to Canada in November.
Mark Craft at Tesco Williamsen reported that they signed a quarter-million-dollar deal with company in Calgary for a number of custom-made trucks. Mark says that came as a direct result of their participation on the trade mission. News like that makes my day!
It reinforces what I said earlier – Utah is leading by example, and businesses large and small are taking notice and taking root, right here in our industrious Beehive State, growing jobs and further fueling our economic recovery.
I’ve said it before, and I’ll say it again. Utah is on the right road, headed in the right direction, and I like our momentum.
It feels good to be out front. And the road ahead looks pretty nice, and I am very optimistic about Utah’s future.
To make sure that future is as bright as we hope, we have to be vigilant.
We must not only continue to ensure the environment is right for business to grow, we must also continue to innovate. Innovation is the heart of future growth. I’m going to repeat that – it’s important – innovation is the heart of future growth.
We cannot afford to stifle innovation in a recovering economy. In fact, promoting innovation – in all its forms – is critical to a healthy economy.
Our research universities lead the nation for commercializing new technology. that is no small achievement.
In fact, the new USTAR building on the University of Utah Campus will open on April 19. It joins a sister facility that’s already running at Utah State University.
These state-of-the-art buildings will revolutionize the research capabilities of these universities. But it’s equally important to remember that innovation also starts with the small entrepreneur with a big idea.
Take for example Randell Heath, from Mountain Green, Utah. Randell is here with us today and I’m going to brag on him for a moment. Randell where are you? Please raise your hand.
Many of you have seen our beautifully renovated Capitol building. I can tell you that it is an honor to work in that inspiring edifice – truly an honor.
A couple of years ago, Randell’s company, Coldsweep, won the contract to clean the Capitol’s exterior. That is no small job!
Coldsweep used a proprietary dry ice blasting method that power-washed the building, without causing damage or waste, as you’d see with traditional sand blasting.
But Randell didn’t have just one good idea. Coldsweep now has a new procedure called induction stripping.
I’m not a scientist, but the way I understand it, the procedure breaks the bonds that keep paint, epoxy, and other coatings stuck to steel. Once they’re treated, you can peel them right off with a putty knife.
The point is that innovation is an ongoing effort that creates leaders in new and revolutionary industries.
And it’s not just Coldsweep that is innovating here in Utah – there are thousands of companies in the State that are innovating every day.
My administration’s job at that nice clean Capitol is to create the fertile field – the business friendly environment – and then get out of the way and let great businesses like Coldsweep – and your own companies – do great things.
Going back to my love of sports – I really enjoy team sports. On a team, you capitalize on each other’s strengths.
You harness your energies for a common goal. You focus your resources and use the best game plan for the conditions.
Whether in the game of sport or the game of business, I believe in the power of collaboration. I am convinced we can reach greater heights and achieve MORE as a team – The acronym TEAM: Together Everyone Achieves More.
And I am equally convinced Utahns are hard-wired for teamwork. Since our early pioneer days, Utahns have uniquely understood the synergies and value of working together, toward a common goal – and we still practice that.
We actively and respectfully work with all parties to find common ground on which we can move forward.
That cooperative tendency extends among partners and competitors alike – and it yields strong outcomes that may not have been possible otherwise.
I LOVE this next example. Let me tell you about Janicki Industries.
Janicki Industries is a composites precision machining company that recently opened a new 100,000-square-foot facility in Layton.
The Governor’s Office of Economic Development brought together composites experts from around the state and asked, “Who else needs to be brought here to complete your supply chain?”
Now, though they were competitors, the members of this working group saw the value in working together to improve the aerospace cluster for everyone.
The group identified Janiki Industries as that missing link.
So, the Economic Development Corporation of Utah visited Janiki headquarters in Washington State to discuss a possible expansion here in Utah.
The timing was fortuitous. Janiki was just starting talks with ATK about partnering on the Joint Strike Fighter project.
They visited Utah, and found the education community ready to step up to meet their needs with a composites manufacturing training program hosted at Davis Applied Technical College.
After meeting with the very supportive Layton community leadership, Janicki ultimately decided to open their new facility in Utah.
Here you had industry leaders, state entities, the education community, local governments, and more all coming together to achieve a favorable outcome.
This is the epitome of the unprecedented partnerships I often speak about. Isn’t it exciting to realize you are growing your business in that kind of innovative, collaborative environment?
And Janicki is not the only firm that recognized the uncommon value in common Utah characteristics like innovation and collaboration.
Fusion-io saw it as well. Rick White, the cofounder and chief marketing officer, says the reason Fusion-io stays in Utah is because of our economic environment. He’s here today in our audience. Hi, Rick.
Thank you for growing Fusion-io here in Utah. You, just like the other fine businesses represented here today, are doing right by Utah, and I appreciate it.
Let me share with you all what Rick has said:
“Bringing innovative ideas to market takes an economic climate in which businesses with great ideas can succeed. That takes responsible tax policies that can help businesses grow, a talented and experienced professional community that can advise up and coming new ventures, as well as a lifestyle that attracts and keeps top talent in Utah.
“Today, Utah is a place where innovative businesses like Fusion-io can thrive, because our leaders recognize what it takes to support companies to keep them growing in our great state.”
In the sporting world and in the business world, competition is keen.
In golf and in business, you have to play your best to make the leader board.
Utah is moving to the top of its game, and we will continue to do better.
My Charge to each of you as business leaders is this:
If you’ve been waiting for the right time to innovate, now is the right time.
If you’ve been waiting for the right time to invest, now is the right time.
If you’ve been waiting for the right time to launch a new product, now is the right time.
If you’ve been waiting for the right time to expand, create more jobs, or hire more people, now is the right time.
Whether your company is in the middle of the back nine or you are just setting up on the first tee – now is the right time.
So, I say to all of you – the best and brightest of Utah’s business community – take dead aim for the flag, keep your head down, focus, keep your eye on the ball, and grip it and rip it.
Now is the right time…and Utah is the right place.