Silicon Valley has long claimed the spotlight as the epicenter of tech in the United States, but there is tech life beyond Palo Alto. So, where else are we seeing a strong tech presence in America? The answer may surprise you. Salt Lake City, in particular, boasts a rich education and tech history with business-friendly policies, making it a hot spot for tech talent and growth.
Utah’s Tech History
With strong computer science programs, the universities in the Salt Lake City area have produced noteworthy tech talent over the years. Nolan Bushnell, the founder of Atari, claims the University of Utah as his alma mater. Novell, an early competitor of Microsoft in the 1980’s and 90’s was created by Ray Noorda and Drew Major, graduates of the University of Utah and Brigham Young University (BYU) respectively. Additionally, WordPerfect, an early competitor of Microsoft Word, was developed at BYU.
In 1996, Omniture, an online marketing and web analytics company, was created in Orem, UT by Josh James, another graduate of BYU. Adobe purchased the company in 2009 for nearly $2 billion. Qualtrics, a software company that began nearly two decades ago in Provo, UT, was created by a BYU professor and his two sons in their basement. Just recently, the company was acquired for $8 billion by SAP, a well-known market leader in enterprise application software—another testament to reputable and international companies that are recognizing and scooping up the various tech opportunities in Utah.
Utah: A Business-Friendly State
Alongside the area’s unmistakable tech presence, Utah is also a business-friendly state, making it an attractive place to start and grow a tech company. In this 2018 list from CNBC, Utah claimed the third spot overall in ranking states’ economic climate for conducting business. CNBC looked at over 60 metrics to rank states, including aspects such as the cost of doing business, economy, quality of life and cost of living. Utah won the #2 spot in economy, #19 in technology and innovation, and #12 in quality of life, just to name a few.
“Utah overall has a diverse economy,” according to Bryan Welch, Chief Communications Officer for Colliers’ Salt Lake City-Millrock office. “Not just one sector is strong here—while tech is big, companies like Boeing and Proctor & Gamble are also strong, further diversifying the market. We have a highly educated workforce, favorable policies, a high quality of living and inexpensive labor costs. All of these factors are a great hook for tech companies, offering them a lot of opportunity here in Utah.”
Will Utah’s Growth Hit a Wall?
While the business climate in Utah has proved to be favorable for growth, particularly in terms of tech, there are a few roadblocks to note that might slow this growth for the time being. The Salt Lake City area’s population is expected to double in the next 20 years, which means transportation and infrastructure improvements will need to be well-planned to accommodate for this explosion in growth. Additionally, like any market experiencing growth, housing prices are rising substantially, making the area less affordable for many. Geographically speaking, Salt Lake City is quite unique as well, with two massive lakes to the west and a mountain range to the east. These geographic barriers definitely limit the potential for suburban sprawl in the decades to come, and it’ll be critical to plan efficiently to maintain business growth on par with the slated growth in population.
Honorable Mentions: Other Unexpected Tech Hubs
Salt Lake City isn’t the only market giving the Silicon Valley a run for its money. Three other markets that have proven to be strong in this sector: Austin, Raleigh and Charlotte.
“Over the past 15 years, Austin has become one of the top technology markets in the country,” says Volney Campbell, Co-Chairman & Principal of Colliers’ Austin office. “Companies such as Apple, Oracle, Cisco, IBM, Indeed, Facebook and countless others have a significant workforce in the Austin area. In addition, Austin has also seen a strong entrepreneurial spirit grow to become a strong startup community, initially led by the creation of Dell Computers in the 1990’s. Since then, hundreds of companies including Silicon Labs, Retail Me Not, Home Away, Q2 Software and National Instruments have started in Austin and flourished here.” Similar to Salt Lake City, Austin also boasts a highly-educated workforce and business-friendly policies, with Texas taking the #1 spot on CNBC’s 2018 list of business-friendly states. “Austin is a proven commodity as a major factor in the technology industry and has all of the tools in place to remain a growing innovator of new technologies going forward,” concludes Campbell.
Raleigh, North Carolina is another notable tech-centric hub. With a low tax burden and three tier 1 research universities within 25 miles of each other, this market is teeming with tech talent. Tech companies that have a presence here include Citrix, Lenovo, SAS, EMC2, NetApp, Microsoft and Google. “The continued growth of Research Triangle Park as the leading, and also the largest, high technology research and science park in North America, pipeline of young talent from local universities, entrepreneurial workforce in the market and incentives from local government for businesses to come to the area, positions Raleigh for continued tech growth in the years to come,” says Kathy Gigac, SIOR, Director of Tenant Advisory Services in Colliers’ Raleigh office.
Another North Carolina city, Charlotte, boasts a robust tech presence. “Charlotte has one of the lowest corporate taxes in the Southeast at 3%,” says Haleigh Mundell-Moore, Marketing Manager for Colliers’ Charlotte office, on why tech is able to thrive here. “Other key factors in Charlotte’s technology success include business incubators, two of which cater specifically to tech startups, as well as the nearly 2,000 core technology related degrees/certificates that are awarded at Charlotte-area universities each year.” Tech companies with a presence in Charlotte include McKesson Technology Solutions, Optum, Inc., Microsoft, Passport, Inc., Synechron, Spectrum, Windstream and many more.
One thing is certain: as the technology sector continues to expand, so will its reliance on top-tier talent. Where do you think America’s next hotbed of tech talent is growing?
This article was written by the U.S. Colliers Editorial Board, whose mission is to produce new and noteworthy commercial real estate thought leadership pieces to create conversation around proactive content. The Editorial Board focuses on CRE trends in the United States, and is comprised of Colliers marketing, research, communication and service line leaders.