IT growth gets a push

Utah's information technology sector appears to be strengthening, and its top IT professional organization wants to stay busy this year reinforcing and enhancing that growth.

The Utah Information Technology Association wants to advance a research university initiative, help broaden companies' access to needed venture capital and offer more opportunities for professional mentoring during the next 12 months. The springboard will be statistics showing the sector on the rebound.

"After three brutal years, through 2003 — when our industry wasn't just in a recession, it was in a depression — to have 2004 be a transition year, we started to see some positive signs," said Richard Nelson, UITA's president and chief executive officer.

Perhaps some of the most telling data is from the Utah Department of Workforce Services and compiled by UITA. It shows Utah having 2,984 IT companies in September 2004, up from 2,638 a year earlier. Included in that 13.1 percent overall growth is 14 percent growth in custom computer programming services, for a total of 781 companies last fall.

Jack Sunderlage, UITA's chairman and president of Content-Watch Inc., suspects most Utahns would peg the number of Utah IT companies lower than the 2,984 figure. He recalls that in 1993, Utah had only 684.

"It blew me away at the time. I didn't think we had anywhere near that number," he said. "But 12 years later, to be at nearly 3,000 companies is very impressive."

Another indicator of a turnaround is the number of patents awarded to Utah inventors. The figure reached 899 in 2004, the second-highest figure ever. It compares with 847 in 2003 and the all-time high of 916 in 2001, according to information from the U.S. Patent and Trademark Office that was analyzed and compiled by the Salt Lake offices of law firm Stoel Rives LLP.

What's more, Utah ranked as the top state in the country for the most Inc. 500 companies per million residents in 2004, and Provo is second among metro areas in similar rankings. Utah's overall figure of 6.8 Inc. 500 companies per million residents compares with second-best Virginia's 3.9. Provo had 16 per million, behind only 17 per million in Huntsville, Ala.

Sunderlage noted that "the capital area is maturing for us as well," as some late-stage and angel-investor activities are on the rise. And Nelson said many entrepreneurs are remaining in Utah to start second, third and fourth companies.

Nelson and Sunderlage attribute Utah's IT success to a variety of factors, including a widespread entrepreneurial spirit, an educated and skilled work force, employee loyalty and quality of life.