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Guest opinion: Utah: This is the economic place

The Adobe headquarters, foreground, and other commercial developments that make up the "Silicon Slopes" around Point of the Mountain in Lehi are pictured on Wednesday, May 16, 2018.
The Adobe headquarters, foreground, and other commercial developments that make up the "Silicon Slopes" around Point of the Mountain in Lehi are pictured on Wednesday, May 16, 2018.
Spenser Heaps, Deseret News

The nation was in its infancy when the Father of the American Industrial Revolution, Samuel Slater — or “Slater the Traitor” to the British — brought textile machining to the United States. Businessman Frank Lowell’s all-in-house textile factory took industrialization to the next level only a generation later. But the tenacious immigrant and intrepid tycoon are united by more than the entrepreneurial spirit and cloth; neither would have succeeded if not for the way New England’s geography aligned with the day’s technology. The convergence of comparative advantages and tech has only continued to shift geographical locations since then, and today, that convergence is heading to Utah.

The machines of the First Industrial Revolution that took textile production from cottages to factories relied on hydropower, and that placed geographical restrictions on this technology. That’s why Sir Richard Arkwright built his 1770s textile factories in Cromford, England; why Slater re-created Arkwright’s success in 1790s Pawtucket, Rhode Island; and why Lowell refined the textile industry during the War of 1812 in Waltham, Massachusetts. New England’s fast rivers and great ports set up the Northeast as the center of gravity for the era’s tech industry. The cotton spindle was akin to the silicon chip, and the largest textile factory town — Lowell, Massachusetts — was known as Spindle City, the 19th century version of Silicon Valley.

But technology continued to change in succeeding generations, moving the U.S. economy’s geographical fulcrum. Hungry steam engines devoured coal to power new factories and fuel the locomotives and steamboats transporting their manufactured goods. As the late-19th-century United States entered the Second Industrial Revolution, America’s coal rich, steel-producing states between the Appalachians and the Midwest came to enjoy the success rivers once gave New England.

Yet none of these regions remain on America’s economic pedestal. As the late-20th century ushered in a service industry, New England’s rivers, Pennsylvania’s coal mines and Ohio’s steel production ceased to provide these states with the prosperity they previously did. “Rust Belt” became a popular moniker for these once vibrant regions as the U.S. economy’s center of gravity leapfrogged the intermountain region for the digitally fertile ground of Silicon Valley. No longer were natural resources — fast rivers, coal and iron — the predominant factors of American production. The digital products and services of the Third Industrial Revolution required highly skilled labor and a vibrant ecosystem of innovation to thrive. Silicon Valley embodied these attributes just as Lowell’s Spindle City had for early 1800s America and the Rust Belt did a century later.

The economy is fundamentally changing again. Some economists call the rapid rise of advanced manufacturing a Fourth Industrial Revolution; others argue it is a second phase of the Third Industrial Revolution. Semantics aside, the ongoing shift opens the door for another displacement of the global economy’s geographic center.

Indeed, hyper-fast computing and web-connectivity, the internet of industrial processes, additive manufacturing (i.e. 3D printing), and the development of artificial intelligence are revolutionizing how we manufacture 21st century goods. As the labor factor of production shifts from many low-skill laborers to relatively fewer high-skill workers, we are seeing a dramatic reshoring of manufacturing jobs to the United States, where high-skill labor is abundant and the world's largest market can be reached without costs in time and resources of shipping goods across oceans.

This advanced manufacturing economy of the future will go to those regions with the right primary inputs: highly skilled labor; high quality of life (since labor is more mobile than ever before); a globally connected ecosystem of innovation; low-cost land, taxes and regulations; and access to markets via geographic location, transportation hubs and distribution facilities. States that bring these inputs together will seize America’s economic pedestal, like Silicon Valley, the Midwest and New England have before. Those familiar with Utah’s economic policies, educated population, good governance and role as the crossroads of the West should see that this describes Utah.

New England, the Rust Belt and Silicon Valley demonstrate that disruption is the one constant in economic history. Disruption is coming, and the Beehive State is primed to emerge as the Fourth Industrial Revolution’s new economic center of gravity. Soon enough, it may not be just Brigham Young, but the world that looks at Utah and thinks: “This is the (economic) place.”