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Posted 24 Feb 2001   For week ended August 13, 2000
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Sent on Mormon-News: 22Aug00

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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See also: The Lexus and Olive Tree
More about "The Lexus and Olive Tree: Understanding Globalization" at

Copyright 1998, 1999, 2000, 2001 Kent Larsen · Privacy Information