Headfirst into high tech

Figures compiled by the Industry Standard show that technology and Internet-related companies have created 57,000 new jobs in Utah over the past 10 years, with revenues that have jumped from $1 billion to $12 billion.

Three years ago, Leavitt launched his million-dollar plus "Silicon Valley Alliance" that included monthly trade missions to California to lure even more high-tech industry to Utah.

That effort came to fruition just this past legislative session, when lawmakers passed the $100 million "fund-of-funds" which industry observers say will infuse desperately needed early stage money into high-growth businesses.

But the results of Utah's aggressive push into the high-tech industry are mixed — buoyed by success stories but also marred by losses observers say have been beyond Leavitt's control.

"The last three years have been brutal on the information technology sector of the industry," concedes Richard Nelson, president of the Utah Information Technologies Association.

"When you have a concentration of high-tech companies like Utah does, the recession hit us much harder than it did other states that didn't have the same concentration of high-tech companies."

In 2001, Iomega Corp., a longtime cornerstone of Utah's high-tech industry dealt northern Utah a blow when it announced it was moving its headquarters to San Diego.

Further south, Provo-based Novell also faltered when the high-tech bubble burst a couple of years ago, a stumble that led it to lay off employees.

Computer manufacturer Gateway shuttered 27 of its stores across the country the same year, including shutting down its operation in Orem.

On a Lehi hillside, Boise-based technology giant Micron has a gleaming new plant that once promised to employ as many as 4,000 Utahns, but only a few hundred people are working there.

By 2001, the state's high-tech industry lost 1,700 jobs. The latest numbers compiled in a study called Cyberstates says Utah lost more than 6,000 high-tech jobs between 2001 and 2002 and venture capital investments dropped by more than 50 percent — down to $97 million from $202 million in 2001.

Despite his efforts to make Utah a high-tech capital, Utah is still only No. 27 in the country for its number of high-tech establishments, 28th for its value of high-tech payroll and 32nd for how much is spent on research and development.

Nelson said the outlook for 2004 is looking up, with Inc 500 recently lauding Utah for having 13 of the 500 fastest-growing companies.

"It is clear they are not going away and are going to become even more important and a more vital part of our economy in future years."

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