Utah remains competitive

Utah slipped one spot but remained in the top tier in an economic competitiveness report released Friday by a Boston-based think tank.

Utah fell to third behind Massachusetts and New Hampshire in the 2005 Economic Competitiveness Report of the Beacon Hill Institute at Suffolk University. Neighboring Colorado moved up one spot to fourth, while Louisiana finished last.

"We've averaged third (in the institute's rankings) in the last three years," said Jeff Thredgold, economic consultant to Zions Bank and president of Thredgold Economic Associates in Salt Lake City. "Certainly, you want to be at the front of the list as opposed to the end of the list. But what it says is that Utah's economy is solid."

The Beacon Hill Institute defines competitiveness as "the policies and conditions that ensure and sustain a higher level of per capita income and its continued growth." The 2005 report measured states according to eight variables — government and fiscal policy, security, infrastructure, human resources, technology, business incubation, openness and environmental policy — which were then combined into a single "competitiveness index."

Utah scored its highest marks in the human resources and business incubation indexes. Among its other "competitive advantages" were the percent of the population enrolled in degree-granting institutions, the state's low crime rate and its infrastructure.

"The fact is, we're a good state in which to do business," Thredgold said. "The Utah economy is solid, and job growth is strong. The issue we will face is tightening labor markets, which could make things more difficult for small businesses in particular."

Competitive disadvantages, according to the report, included "state and local taxes per capita/income per capita," which ranked 42nd overall, and the state's "openness" index (also 42nd), which measures "how well firms and people in a state are connected with the rest of the world."

Thredgold said he "wouldn't be surprised" if Utah's low openness ranking "doesn't have something to do with the different cultures in the community."

"It's no secret that to some Easterners in particular, the prospect of doing business in Utah is a matter of some concern, due to the dominance of the church (The Church of Jesus Christ of Latter-day Saints)," he said. "They're fewer than before, but it still is a factor. But, the quality of life, the highly educated work force, the attractive recreation opportunities and four mild seasons all lend themselves to making Utah a very good place to do business."

According to the report, the openness subindex is based on export levels and the percent of the population born abroad.