SALT LAKE CITY — New research from the Kem C. Gardner Policy Institute indicates the Utah economy has largely benefited because of globalization. The report also shows that the value of the state's annual exports have climbed above $13 billion.
The study, titled "What has been the impact of globalization on Utah?" was authored by Jim Wood, Ivory-Boyer senior fellow at the Gardner Institute.
He said the impact of globalization for Utah has been widespread and generally positive, with a major reason for Utah’s international success attributed to the many products locally manufactured that have been largely immune to "offshoring." He added that Utah also has a great need for additional labor to support the state's growing economy.
Immigrants, rather than displacing local workers, have been a welcome source of labor, Wood said. Data on Utah’s foreign-born, refugee resettlement, international travel and international students also reinforce the positive economic impacts of the cross-border movement of goods and people, he said.
“While some may portray free trade and open borders as threatening, the data suggest such a negative view is not warranted for Utah,” he said. “Overall, the state economy has seen positive effects from globalization.”
Globalization is the process by which businesses develop international influence or start operating on an international scale.
The Utah economy is larger and more prosperous because of globalization, he said.
"Globalization is not a choice, it's just a reality," Wood said. "It's been going on since the times of (Christopher) Columbus and it has just accelerated in the last several years."
The report shows that Utah’s 2015 international goods (non-gold) exports supported $3.5 billion in earnings, 84,367 jobs and added $6.7 billion to Utah’s gross domestic product.
Wood noted that the Beehive State has mostly avoided the economic shocks of free trade due to the state’s low concentration of import-vulnerable manufacturing jobs. He added that immigration is a key source of workers for Utah employers, with approximately 172,000 foreign-born workers making up 12.5 percent of the state’s total workforce.
Additionally, about 7 percent of the 116,600 students enrolled in the state higher education system are international students, the report states.
“This report reaffirms the need for global engagement to generate sustained economic growth, and reveals many assets to build on,” said Marek Gootman, fellow and director of strategic partnerships and global initiatives at the Brookings Institution — a nonprofit think tank based in Washington, D.C. “The report reinforces the value of new efforts by business, government and civic leaders to strengthen the international economic connections and competitiveness of Utah and its regions.”
Wood said that despite some misgivings and political posturing among some leaders in the nation's capital, the long-range benefits of globalization far outweigh any perceived advantages created by proposed isolationism.
"Back in the 1930s, we became more isolationist and more nationalist, and that's where we are right now in the world — at least over the last two years," he said. "In the long-term in Utah, on a consistent basis we're going to grow (economically)."
The state ranked seventh among the top 10 states in the percent increase in the value of exports, having jumped 142.5 percent from 2000 to 2015, totaling $7.7 billion — less the value of primary metals.
The report also says the number of trading partners and volume of trade expanded substantially for Utah and the U.S. due to free trade agreements that began with the North American Free Trade Agreement in 1994. Utah’s trading partners can be divided into three categories, including gold export countries, NAFTA partners and Asian countries, according to the study.
Wood noted that globalization (imports and exports) overall has been very positive and beneficial to Utah and that trend should continue for the foreseeable future, barring any government interference with trade markets.
"Trade is positive for countries and consumers benefit with lower prices," he said.