5 reasons to believe Utah’s booming business sector is going global

It’s not at all surprising that a confab featuring Utah’s tech-savvy Gov. Spencer Cox interviewing Jazz owner/Qualtrics co-founder (and uber-fan of all things Utah) Ryan Smith would yield some notable moments. But the real revelation was how bullish both men are about the state’s growing reputation among members of the international business and investment community, a group that is increasingly seeing Utah as a gold-plated target for investment and expansions.

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The interview was featured during a presentation at the SelectUSA conference last week hosted by President Joe Biden, who also spoke to attendees from around the world.

Besides the celebration of the ongoing and outstanding on-court success of the Utah Jazz, here’s a few things we heard:

Utah’s rep made the Jazz deal a snap

Newly minted Utah Jazz owner Smith told Cox it took him exactly two phone calls to round up financial partners to join him ahead of buying Utah’s beloved NBA franchise last October. And Smith says the enthusiasm for investing in Utah shown by his minority partners — Australian tech entrepreneur and Atlassian co-founder Mike Cannon-Brookes, and Silicon Valley venture capital guru and Accel general partner Ryan Sweeney — is evidence of how highly regarded the Beehive State has become in the world of business and investment.

“That is what happens as a benefit of all the work that’s been done here in Utah,” Smith said. “Success breeds success. I made two calls ... and we walked into the NBA and said we’re ready to go.”

Utah Jazz owner Ryan Smith, left, and Dwayne Wade, who bought a share of the team, talk during a game at the Vivint Arena in Salt Lake City on Friday, April 16, 2021. | Jeffrey D. Allred, Deseret News

From crickets to cacophony

Cox noted that 20 years ago the investors willing to take a chance on putting their money behind a Utah business were hard to find, but it’s a scene that “we’ve seen change dramatically over the past decade.”

An environment once notable for its cricket soundtrack has become a hectic queue of activity as foreign investors are, according to Ben Hart, Utah Governor’s Office of Economic Development deputy director, clamoring for a presence in Utah’s high-flying economy and startup community.

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“Without question, we’ve got more interest from international businesses right now than we’ve probably ever had in the state of Utah,” Hart said. “We’re making our presence known on the international stage.”

Data from Pitchbook and the National Venture Capital Association reflects that over 200 Utah venture deals since 2015, collectively worth over $5.4 billion, have included at least some portion of international investment.

From gold medals to gold-plated deals

Hart said Utah took a huge step in building its global recognition and reputation after hosting the highly successful 2002 Winter Olympics, the first worldwide event that followed the 9/11 terrorism attacks. He also noted the state gets an outsized volume of attention, and visits, by international leaders and dignitaries thanks to the presence of the world headquarters of The Church of Jesus Christ of Latter-day Saints.

And, Hart said more investors are learning that investments made in Utah companies are simply outperforming those made elsewhere.

“One of the things that’s played an important role is the deals in Utah are viewed as really sound, solid investments,” Hart said. “Over the years, Utah deals are worth more and the businesses are sounder than their counterparts around the country.”

The Adobe headquarters, in back left, 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

An acquisition heard round the world

In November 2018, Smith was just three days away from taking Qualtrics public when European software giant SAP proposed a deal that couldn’t be refused. SAP offered $8 billion cash for the Provo-based customer experience innovator, far exceeding pre-IPO market value estimates at the time. Spring forward to January of this year, which saw Smith, now in the role of Qualtrics executive chairman, ringing the Nasdaq bell with CEO Zig Serafin. Hours later, the company had vaulted to a $27 billion market value after Qualtrics stock jumped more than 40% in early trading.

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Hart said the Qualtrics deal was huge (and, at that point, the highest priced acquisition deal targeting a privately held software company) and continues to have wide, positive impacts on Utah’s business sector.

“SAP’s acquisition of Qualtrics is extremely important for a number of reasons,” Hart said. “Not only did it send the right signal to the broader international investment community about opportunities in Utah, it also pushed a level of money into our economy that is supporting a lot of other companies in the ecosystem.”

Bill McDermott, former CEO of SAP, right, is introduced by former Qualtrics CEO Ryan Smith in Salt Lake City in 2019.
Bill McDermott, CEO of software company SAP, right, reacts to the applause as he is introduced by Qualtrics co-founder Ryan Smith, left, during the Qualtrics X4 Summit at the Salt Palace Convention Center in Salt Lake City on Thursday, March 7, 2019. | Steve Griffin, Deseret News

Riding the rails of momentum

Cox said Utah has an incomparable mix of factors powering its ongoing commercial successes that includes a young and highly educated workforce; one of the most diverse economies in the country; government and business communities that know how to work together; and a unique social cohesion evidenced by the lowest wealth and income gaps in the U.S. While the SAP deal earned headlines around the world, Utah has also drawn investment from numerous other international business titans in recent years including Stadler Rail (Switzerland) and Japanese multinationals Hitachi and Mitsubishi.

A report from the Global Business Alliance identified more than 500 international companies with a Utah presence and noted jobs powered by foreign direct investment in the state grew by more than 35% between 2013-2018.

Trains and rail cars are produced Stadler US Inc. in Salt Lake City on Thursday, June 10, 2021. | Jeffrey D. Allred, Deseret News