Economic Development 1.1: Business Climate

ECONOMIC DEVELOPMENT ACTIVITIES SHOULD BE A FORCE FOR IMPROVING THE STATE’S BUSINESS CLIMATE

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Currently, the State is pursuing an "Economic Ecosystems" strategy to continually diversify the economy and build on internal strengths. These economic clusters form around core groups of export companies and are influenced by factors such as research capabilities, availability of capital, new ideas, and talent base. Ecosystems embrace a wide range of industries, from technology rich areas of web and digital technology, to travel/tourism, to traditional areas such as aerospace. Such a strategy contributes to higher wages for Utah workers and a continually diversifying, healthy economy. Performance Measure: Diversify the economy, increase the average wage paid Utah workers, and increase the Utah median household income relative to the national average. A diversified economy is less vulnerable to fluctuations in a few key industries. From a low of 74%, Utah's industrial diversity index rose to 89% by 1990 and to 98% in 2001, making it one of the most diversified state economies in the country. In 1990 Utah's median household income was 98% of the Nation's, although the average annual wage remains at a little over 80% of the national average. Performance Measure: Improve the state's relative cost of doing business. Utah's labor productivity has increased from 95% of the national average in 1993 to 101% in 2000. Utah's relative business tax burden has declined from 100% of the national average to 96%. Utah businesses pay about 1/3 of total taxes, which is average for the western states. Looking Ahead: Although Utah's job growth has slowed the last few years, the diversity of the State's economy should enable wages and income to continue growing. However, some of the same economic and demographic factors will make it difficult to lower business costs.

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