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Summarized by Kent Larsen
Utah Gov. Leavitt's Silicon Valley Initiative Has Secret Weapon: Mormon Culture
SALT LAKE CITY, UTAH -- A lengthy article in the weekly Internet
magazine The Standard looks at Utah Gov. Mike Leavitt's "Silicon
Valley Initiative," an attempt to get firms from California to
relocate or open offices in Utah. Leavitt tells The Standard's Robert
Boynton that Mormon Culture is why they should come.
Leavitt, like several other governors and state development
officials, has been making the rounds of Silicon Valley companies,
preaching the gospel of Utah and how Mormon Culture makes it the
place to locate. Unlike the representatives of other states, Leavitt
has high tech and management experience -- he knows what he is
talking about. "He was very impressive and had a sophisticated
understanding of the issues surrounding the Internet," says Ted
Schlein of Venture Capital firm Kleiner Perkins. "I would
characterize myself as a Mike Leavitt fan. If he called me, I'd call
him back and see if I could help him."
Unlike Silicon Valley, Utah has lower real estate prices and labor
costs, less traffic, low employee turnover and plenty of engineers.
Salt Lake City is just 1 1/2 hours from Silicon Valley (by air), and
Utah has, according to Leavitt, the fastest growing, best educated,
most technologically sophisticated and hardest working workforce in
the nation. Leavitt says Mormon Culture gave the state these
advantages.
Many companies agree. Gary Kennedy, an LDS Church member and CEO of
Internet company Ten Fold, says the large population of engineers and
the low turnover rate made Utah very attractive for his Internet
application service provider firm. But, he admits, "Our primary
decision wasn't to move to Utah, our primary decision was not to be
in Silicon Valley." Many other high-tech firms have come to similar
conclusions and located at least some of their facilities in Utah in
recent years, including Ebay, Cybersource, DLJ Direct and Goldman
Sachs. And some Venture Capitalists say they are pushing firms to
locate in Utah, such as James Flash of Accel Partners. "We're up
against the stops in Silicon Valley. There's an acute shortage of
talent and facilities, and the labor costs are out of control. I've
had no trouble recruiting people to go to Salt Lake."
But author Boynton raises some real questions about Leavitt's
initiative, wondering if Mormon Culture is really that alternative.
"Does Leavitt's 'secret weapon' - Mormon culture - cut both ways,
attracting some companies, but repelling others that judge it too
repressive and homogenous for their multicultural, hedonistic
employees?" he asks. He also questions if it is even possible to
recreate Silicon Valley conditions elsewhere, and whether Leavitt,
who has advocated sales taxes on Internet sales, is the right man for
the job.
From Boynton's point of view, Mormon Culture can ccause several
possible problems. He notes that Mormons have traditionally been
small businessmen. "The good news is that they are real smart and
work very hard. The bad news is that they tend to be small
businessmen, not large, serial entrepreneurs," says Bertoch of the
Wayne Brown Institute. "It is the starvation mentality the state has
always had: Be self-sufficient, have your own business. It is
particular to oppressed, isolated people. If it's not built, we're
going to build it. But we'll do it at our own pace. While in Silicon
Valley they think in terms of 18 months to the IPO, in Salt Lake we
think in terms of one to three years."
BYU Professor John Griffin, a political economist, tells Boynton
about another problem. "Why do we lack the capital and
infrastructure? The answer is culture. Corporate networks in Utah are
generally closed: The insiders all know each other through the church
and other community ties. So if you're a VC who wants to invest in
this emerging high-tech region, it is easier to go to Colorado than
Utah. If you're not Mormon you hit a real barrier."
Boynton avoids concluding whether or not these road blocks can keep
Leavitt's initiative from succeeding. Instead he give a lengthy
profile of Leavitt, covering everything from his early
entrepreneurship and use of technology in the family Insurance
business to the latest book he is pushing on his staff, "The Lexus
and the Olive Tree." But Boynton does hint that regardless of hte
success of the initiative, Leavitt is likely to do much more.
Gateway to High-Tech Heaven?
TheStandard 7Aug00 B2
By Robert S. Boynton
Utah's natural beauty isn't the only incentive for companies to locate in Gov. Mike Leavitt's state. A Mormon workforce is the other draw.
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