Utah's Startup State Initiative Strategic Plan

2024 UTAH’S STARTUP STATE INITIATIVE Strategic Plan

Start something here

“Utah has long been recognized as the number-one state to start a business, the best home for entrepreneurs, and the state with the best economy. According to the U.S. Census Bureau, Utah remains one of the fastest-growing states in the nation.

With our incredible quality of life, well-educated workforce, and unwavering belief that no problem is too big to solve, we’ve created a unique environment for innovation.

As a state, we’ve already put the building blocks in place. Our educational institutions are churning out the next generation of leaders. Our workforce is motivated and highly skilled. And our communities consistently lift each other. In short, we’ve created the perfect ecosystem for startups to thrive.

This isn’t just about Utah; it’s about setting a new global standard for innovation and entrepreneurship.”

Spencer

J. Cox

Utah’s 18th Governor

Vast opportunities await

> LETTER FROM INITIATIVE LEADERS

January 2024

Utah is well-known as a great place to start and operate a business. Small businesses are essential to our growing economy, where 99% of Utah businesses are startups or small businesses and employ 46% of Utah’s workforce.

Utah offers vital resources to small businesses through a vibrant entrepreneurial ecosystem, business-friendly policies, innovative economic opportunity initiatives, a commitment to equitable economic success across the state, and thriving technology and innovation sectors.

We aim to take Utah to the next level, providing strategic investment to help small businesses in all parts of the state thrive in today’s global marketplace.

This Startup State Initiative strategic plan outlines some ways and recommendations the Utah Governor’s Office of Economic Opportunity and its economic development partners can support Utah startups, entrepreneurs, and small businesses.

Sincerely,

Ryan Starks

Brad Bonham Executive Director Utah Governor’s Office of Economic Opportunity

Utah’s Entrepreneur-in-Residence

From idea to open

EXCEPTIONAL LIFESTYLE

Utah is home to The Mighty Five® National Parks, 46 unique state parks, and The Greatest Snow on Earth.® Utah is the most charitable state in the country, ranked first for charitable giving and volunteerism. 2 Utah also ranks ninth in the U.S. for life expectancy.3

TOP-NOTCH WORKFORCE

Utah’s 16 universities and colleges, with a combined enrollment of 215,000 students, are cultivating the next generation of leaders.4 Utah residents rank higher than the national average in the percentage of the population with bachelor’s degrees and high school diplomas.5 With over 60,000 degrees and certificates awarded annually, Utah’s highly educated workforce excels in today’s competitive economy.6

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INTRODUCTION

Utah has crafted the perfect environment for startups and small businesses to thrive.

Consistently named the best place in America to start a business, Utah routinely receives high rankings for the place where entrepreneurs excel and accolades for being the country’s best economy.

Startups and small businesses represent 99% of Utah businesses and employ over 45% of Utah’s workforce.1

FAST-GROWING, DIVERSE ECONOMY

With a Hachman Index score of 95.6 out of 100, Utah is one of America’s most diverse economies.7 Utah’s small businesses span various industries, from arts and entertainment to financial services. Technology, healthcare, and aerospace industries are booming and becoming national leaders.

https://advocacy.sba.gov/wp-content/uploads/2022/08/Small-Business-Economic-Profile-UT.pdf

2 https://wallethub.com/edu/most-and-least-charitable-states/8555 3 https://worldpopulationreview.com/state-rankings/life-expectancy-by-state

⁴ https://ushe.edu/wp-content/uploads/pdf/reports/2022/2021-22_USHE_Annual_Report.pdf ⁵ https://www.census.gov/quickfacts/fact/table/UT/POP815221#POP815221 ⁶ https://ushe.edu/wp-content/uploads/pdf/reports/2022/2021-22_USHE_Annual_Report.pdf ⁷ “The Utah Economy: Economic and Demographic Fundamentals”, Kem C. Gardner Institute, October 5, 2023

Utah: The Startup Capital of the World The Startup State Initiative

The Startup State Initiative highlights what already exists in Utah and elevates it to new heights. It isn’t just about Utah; it’s about setting a new global standard for innovation and entrepreneurship.

This initiative helps startups, small businesses, and entrepreneurs at every stage of business by unifying the state’s entrepreneurial ecosystem, simplifying government processes and regulatory burdens, ensuring Utah’s economic opportunity is equitably shared, and making impactful investments into access to capital for Utah small businesses.

The Startup State Initiative acknowledges the significant efforts of the Governor’s Office of Economic Opportunity and its partners to serve small businesses. These efforts include historic investments in the state’s five targeted industries through workforce investment, innovation, corporate retention and recruitment, international trade and export, supply chain improvements, and reducing government regulation.

For more information about GOEO’s targeted industry strategy in advanced manufacturing, aerospace and defense, financial services, life sciences and healthcare innovation, and software and information technology, please visit business.utah.gov and search for targeted industries.

ENTREPRENEURIAL ECOSYSTEM

> Design and launch a statewide brand to tell the story of Utah as the Startup State.

> Continue statewide efforts to build a resource portal with everything a Utah entrepreneur should need in one place.

> Hold statewide roundtables and events to convene key partners, hear feedback from small businesses, and adjust how the state supports entrepreneurs based on the feedback provided.

GOVERNMENT REGULATION

> Make the local Utah business registration process more straightforward, accessible, and uniform.

> Expand affordable healthcare options for small business owners and their employees.

> Help small businesses navigate burdensome or outdated regulatory policy by increasing awareness of the GOEO Office of Regulatory Relief sandbox.

OPPORTUNITY FOR ALL TECHNOLOGY AND INNOVATION

> Intentionally expand access to capital for all Utah small businesses.

> Help improve the collection and accuracy of Utah small business data.

> In collaboration with the Utah Innovation Center and other partners, help support Utah’s research and development community through responsive, innovative programs.

> Increase access to early-stage funding for technology companies to increase capacity for innovation.

ENTREPRENEURIAL ECOSYSTEM

Background

Utah’s competitive economy, highly skilled workforce, and enviable quality of life have culminated in a booming entrepreneurial community that provides startups and small businesses with the resources they need to thrive.

A wealth of public and private organizations provide small businesses with resources essential for success in today’s competitive marketplace. These resources include funding avenues, networks, training opportunities, and workforce support that propel small businesses forward. For a complete list of critical partners investing in Utah’s entrepreneurial ecosystem, please visit startup.utah.gov and click on resources.

The Startup State Initiative helps convene entrepreneurial community members, make valuable connections, and further invest in the startup ecosystem.

Key Partners

Dozens of partners across the state support Utah’s robust entrepreneur community. The Startup State Initiative recognizes the important efforts of these public and private organizations and strives to elevate and support them in their endeavors to support small businesses.

A curated comprehensive list of resources available to small businesses in Utah is available at startup.utah.gov.

Business resource providers Financial institutions

Innovation and entrepreneurship centers Industry associations

Local chambers of commerce Local economic development offices Local, state, and federal governments

Public and private organizations serving small businesses in Utah

Regional associations of government Venture capital organizations

Key Recommendations

RECOMMENDATION 1

Design and launch a statewide brand to tell the story of Utah as the Startup State.

There are many partners serving startups and small businesses in Utah. A new statewide brand housed within the Governor’s Office of Economic Opportunity can help us unify information and resources for entrepreneurs. The brand can help Utah entrepreneurs feel a part of something, unify statewide entrepreneurial efforts, and showcase Utah’s entrepreneurial ecosystem to businesses and investors in and outside Utah.

RECOMMENDATION 2

Continue statewide efforts to build a resource portal with everything a Utah entrepreneur should need in one place.

Create one central location for the most up-to-date information and a clear path for new business owners to follow. One central location will enable small businesses to find what they need quickly, connect with local organizations, and find news and events related to Utah’s small business ecosystem.

RECOMMENDATION 3

Hold statewide roundtables and events to convene key partners, hear feedback from small businesses, and adjust how the state supports entrepreneurs based on the feedback provided.

Public efforts to serve the state’s small businesses require consistent feedback. Thus, small business roundtables and other forums can help the Economic Opportunity office evaluate success and determine the next steps. To provide statewide feedback, small business roundtables and other events should represent business owners from varied industries, demographics, and regions.

GOVERNMENT REGULATION

Background

Utah continues to lead the nation through its business-friendly policies and innovative economic opportunity initiatives. The Wall Street Journal recognized Utah as the best-managed state in America and the number-one state for economic outlook and recovery.8,9 Utah has also maintained a AAA bond rating from 1965, when Standard and Poor’s initiated its rating system, until today. All three rating organizations classify Utah with a AAA bond rating, demonstrating a strong financial management and position for the state.

Utah’s business-friendly approach, low taxes, and minimal regulations make it an excellent place to start a small business. Tax credits like the Economic Development Tax Increment Financing corporate incentive program, New Market Tax Credit, Technology and Life Science Tax Credit, and innovative policies like the state’s Office of Regulatory Relief help lower state fiscal and regulatory burdens on small businesses.

Key Partners

Small businesses work with many local, state, and federal government agencies in the process of starting and growing their businesses. The Startup State Initiative supports these agencies as they work to provide important services to the business community.

Key Recommendations

RECOMMENDATION 1

Recommendation 1

Make the local business registration process more straightforward, accessible, and uniform statewide.

Work with state partners, local governments, and small businesses to determine best practices for business registration processes across the state. Support and enable local governments to update current registration processes to industry best practices.

RECOMMENDATION 2

Recommendation 2

Expand affordable healthcare options for small business owners and their employees.

Provide expanded healthcare options for small business owners and their employees across the state through tax credits, innovative programs, and effective marketing and training. Elevate existing federal tax credits.

Local chambers of commerce

Local economic development offices

Local, state, and federal governments Regional associations of government

8 https://www.wsj.com/articles/states-of-covid-performance-economic-schools-study-working-paper-lockdowns-11649621806

9 https://www.richstatespoorstates.org/states/UT/

RECOMMENDATION 3

Recommendation 3

Help small businesses navigate burdensome or outdated regulatory policy by increasing awareness of the GOEO Office of Regulatory Relief sandbox.

Proactively pursue applications for the GOEO Office of Regulatory Relief sandbox through strategic marketing efforts. Work to identify outdated regulatory policy and help pass future legislation to improve small business outcomes.

OPPORTUNITY FOR ALL

Through strategic planning and investment, Utah has achieved the number-one economy in the country with a high quality of life. The state must ensure the equitable distribution of this success across geography, business size, and demographics.

Rural Utah has seen significant growth over the past 10 years. Fast-paced growth in counties like Iron County (60% growth), Washington County (55%), and Tooele County (44%) has increased the need for innovative solutions to support small businesses in these regions.10

Utah’s significant growth has also led to an increase in microenterprises. Programs such as the Utah Small Business Credit Initiative highlight the importance of microenterprises by supporting small and very small businesses with government subsidized loan programs.

The makeup of Utah’s population has also changed. In the 1990s, 10% of the population was a minority. In 2022, that rose to 23%, with the Kem C. Gardner Policy Institute estimating that growth will increase to over 30% by 2040. Utah’s immigrant population is booming; notably, the Latino population has seen the highest growth at 15%.11

Women own only 16% of Utah businesses, but a 77% increase in women-owned businesses over the last two decades shows significant improvement for women-owned businesses in the state.12

Utah is home to entrepreneurs from many different places, cultures, and backgrounds. Initiatives such as Gov. Cox’s Utah Home, Utah Center for Immigration and Integration, Center for Economic Opportunity and Belonging, Magnify Utah, and the Utah Small Business Credit Initiative have helped highlight the diverse needs of these communities.

Key Partners

Small business communities are served by a wealth of public and private organizations. The Startup State Initiative acknowledges the crucial work done by these partners over the past decades to ensure economic opportunity is equitably distributed.

Key Recommendations

Business resource centers serving niche business communities

Multicultural and identity chambers of commerce

Public and private organizations helping niche business communities Rural chambers of commerce

10 “The Utah Economy: Economic and Demographic Fundamentals”, Kem C. Gardner Institute, October 5, 2023

11 https://jobs.utah.gov/wi/data/library/demographic/annualpopprofile.html

12 https://www.usu.edu/uwlp/blog/2022/white-paper-women-owned-businesses-in-utah-status-challenges-opportunities

RECOMMENDATION 1

Intentionally expand access to capital for all Utah small businesses.

Many small business communities face unique challenges when seeking funding for their small businesses. Increase their ability to receive capital by ensuring capital access programs are available in rural regions, encouraging IRS individual taxpayer identification number participation, offering marketing materials in the top two to five languages spoken in Utah, and marketing through trusted organizations and pillars in Utah communities.

RECOMMENDATION 2

Help improve the collection and accuracy of Utah small business data.

To support Utah small businesses, we must have accurate information about companies in rural Utah, women-owned firms, multicultural-owned businesses, and microenterprises. By improving current data-collecting systems, educating the public about the importance of self-reporting data, and adding data-collecting mechanisms to existing programs, we can improve the accuracy of data related to Utah small businesses.

TECHNOLOGY AND INNOVATION

Background

Technology and innovation are key drivers of Utah’s economy. Across the state, small businesses from diverse industries and markets are developing life-changing technologies that benefit us at home and worldwide. Nationally, one venture-capital-backed company in every 101 becomes a unicorn, but in Utah, one in every 61 becomes a unicorn (a privately-held startup company with a value of over $1 billion).13

In particular, Utah’s life sciences industry has seen significant growth. From 2012 to 2022, the number of jobs in Utah’s life sciences industry increased by 5% per year on average versus 4% in other states and 3% in other Utah industries. Manufacturing, Utah’s fifth-largest industry, brought in the third-largest source of GDP. The technology industry also boomed, averaging 4% annual growth from 2007 to 2017, more than double the employment growth in the tech industry nationwide. Technology businesses generated $29.9 billion in GDP in 2017 alone.

Impactful programs and initiatives by the Governor’s Office of Economic Opportunity, Utah Innovation Center, Utah Innovation Fund, and other innovation and entrepreneurship centers in Utah have provided emerging technology companies with funding and resources to grow their businesses. Additional resources will come online as infrastructure and further physical development at The Point gets underway. Many other public and private partners have also supported these industries.

Key Partners

Public and private organizations across the state serve technology and innovation startups. The Startup State Initiative recognizes their crucial work to make Utah a place where ingenuity and innovation thrive.

Industry associations

Technology and innovation centers

Public and private organizations serving technology businesses in Utah

Key Recommendations

Utah’s university tech transfer offices

Recommendation 1 RECOMMENDATION 1

In collaboration with the Utah Innovation Center and other partners, help support Utah’s research and development community through responsive, innovative programs.

Efforts at the Utah Innovation Fund will support and fund promising startups discovered, advanced, or developed at Utah’s colleges and universities. Market this resource and the Utah Innovation Center to early-stage technology businesses. Support partners who invest in technology and innovation through events, marketing, and strategic collaboration.

RECOMMENDATION 2

Increase access to early-stage funding for technology companies to increase capacity for innovation.

Early-stage technology companies face high capital needs when starting a new business. To explore and launch business models based on new technologies, significant capital investments are required to fund research, development, and prototyping. Expanding access to early-stage funding for technology companies will significantly increase these businesses’ ability to innovate and develop new technologies.

> UTAH: THE STARTUP STATE STATISTICS

Source: https://advocacy.sba.gov/wp-content/uploads/2022/08/Small-Business-Economic-Profile-UT.pdf

> STARTUP STATE INITIATIVE TEAM

RYAN STARKS

Executive Director

Utah Governor’s Office of Economic Opportunity

BRAD BONHAM

Utah’s Entrepreneur-in-Residence

Appointed by Gov. Cox in Jan. 2023

PETE CODELLA

Managing Director of Business Services

Utah Governor’s Office of Economic Opportunity

ALECIA HART

Director, Startup State Initiative

Utah Governor’s Office of Economic Opportunity

BON LEE

Communications Fellow, Startup State Initiative

Utah Governor’s Office of Economic Opportunity

CAROLINE ALDOUS

Events and Marketing Fellow

Utah Governor’s Office of Economic Opportunity

PAKIZA MUNIR

Data and Public Administration Fellow

Utah Governor’s Office of Economic Opportunity

MIKE RACANELLI

Creative Director

Utah Governor’s Office of Economic Opportunity

STEPHANIE MILLER

VP Account Planning & Management

Penna Powers

SPENCER LAWSON

Account Planner

Penna Powers

MARISA COOPER

Project Manager

Penna Powers