January 17, 2012

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California Dreamin’

Utah Economic Developers Court West Coast Companies

Gaylen Webb

January 17, 2012

Ever thought of conducting a trade mission to, say, California? Not that the Golden State is a foreign country—the typical destination for trade missions—but economic woes in California make the state a fertile field for economic developers as companies look for more business-friendly environments—like Utah. The Utah Governor’s Office of Economic Development (GOED) is already sowing the seeds in a campaign to educate California businesses about Utah’s beneficial business environment. In collaboration with the Economic Development Corporation of Utah (EDCUtah), GOED has already conducted two mini trade missions to California this year. In late August, a delegation of leaders from GOED and a representative of EDCUtah who is based in California visited seven companies in Silicon Valley, inviting company leaders to consider relocating or expanding their operations into Utah. All of the firms wanted more information about Utah and its business-friendly climate, with two specifically interested in looking at moving some part of their businesses to the Beehive State, says Clark Caras, GOED’s director of marketing. In another mini trade mission last May, leaders from GOED visited six companies in Southern California. As a result of that effort, two of those companies were handed off to EDCUtah project managers for additional work to help them move toward relocation or expansion into Utah. The mini trade missions are part of a larger, million-dollar West Coast marketing campaign that GOED has been conducting since April. Through the marketing effort, 1,100 top corporate executives and professional site selection consultants on the West Coast have received personal contacts from GOED on behalf of Utah. “We didn’t set out to beat anybody up, but we did set out to beat our chests a bit, says Caras, “As a nation, we’ll all be better off when California’s economy turns around, but it’s plain and simple: Many companies are looking for a safe environment to conduct business and we want them to know Utah is the place.” The Place to Be Utah’s good vibrations with California companies haven’t gone unnoticed in the Golden State. Following Adobe’s recent announcement of its expansion into Utah, the Sacramento Bee interviewed Gov. Gary R. Herbert and published a story Aug. 15 on the front page of its Business section, in which it recognized the inroads the Beehive State is making in recruiting California-based technology companies by, “touting Utah's business-friendly environment, alluring tax incentives, comparatively affordable cost of living and pleasing recreational attractions, including Olympic-grade winter sports facilities.” “And it’s working,” the paper said. The story went on to highlight a number of notable California-based businesses that were successfully recruited to Utah. While it is difficult to quantify whether or not the recruitments were associated with GOED’s West Coast marketing campaign, Caras says ad placements and other touches in the campaign have been forcing a look at Utah. “It would be our hope that the exposure helped these executives look to Utah as a place to be,” he adds. The companies highlighted by the Sacramento Bee story include • Adobe Systems Inc., which is negotiating sites to build a $100 million campus in either Salt Lake City or Utah County and create 1,000 new jobs over the next 20 years. • Twitter Inc., the social networking site that is opening its first company-owned data center in Utah and will create an undisclosed number of jobs. • Electronic Arts Inc., which opened a new 20,000-square-foot facility in Salt Lake City in July, adding some 100 employees. • eBay Inc., which is building a $287 million data center and customer support center in Draper. The massive facility will be the primary overseer of eBay's website, with millions of users and accounts. Hundreds of jobs are expected to be filled. • Oracle Corp., a computer software and hardware firm that announced the resumption of construction on a large data center in West Jordan. The 180,000-square-foot facility reportedly represents a $285 million capital investment and initially will employ about 100. An Easy Sell Utah’s marketing campaign officially kicked off last April with ads in the West Coast editions of the Wall Street Journal and Fortune magazine. Jan Dickinson, president and CEO of Dickinson Consulting, a global site selection consulting company based in Portland, Ore., was one of 250 site consultants along with 1,000 C-level executives to receive six-month subscriptions to Fortune magazine with Utah advertising wraps around them. Dickinson says her company is bombarded daily with publications from many states looking to woo professional site consultants, so the magazine would have been easy to ignore. However, the Fortune magazine and its Utah wrap floated to top of the pile. The cover wrap pronounced, “In Utah We Speak Spanish, German, Chinese, .Net, Java and 137 Other Languages.” “Who knew?” she asks. “The fact that Utah is so linguistic was a big surprise.” Intrigued by the advertising wraps about Utah, Dickinson sent a note to Spencer Eccles, GOED’s executive director, to thank him for the magazine subscription and the information. Previous to receiving the advertising wraps, Dickinson says she didn’t know that Utah is ranked the “best managed state,” that it has the lowest debt per capita, that it has the “best economic outlook,” or that its workforce is the youngest and most skilled of any state in the nation. Dickinson says she was also drawn to Utah’s focus on expanding its economic cluster industries. “When we are looking for a site to locate a business, we look for cluster areas of strength—areas that already have a strong business climate in a specific industry. An established cluster means the location has a trained employee base and a solid supply chain,” she explains. “Also, we always look at the availability of skilled labor and labor costs. Those were all compelling points about Utah that I saw in the advertising wraps.” The Right Message The marketing campaign was developed by GOED in partnership with Development Counsellors International (DCI), an international development consulting firm based in New York City, and Richter7, which is a Salt Lake City-based advertising agency. "In the ads, we've had some fun stressing location, location, location," says Caras. Some of the ad headlines created by Richter7 and GOED include quips like: “From up here you can see the recovery!” and “Don’t just out-think the competition, out-locate them!” Another headline promotes Utah’s mix of alternative energy by saying, “Here, ‘Blow Hard’ and ‘Hot Head’ Are Considered Compliments.” “The initiative has really helped focus the attention on Utah,” Caras adds. “With so many companies looking for a safe place to do business, it's been incredibly rewarding to help put Utah on the map through the use of the economic development tools we at GOED have available to meet the needs of companies looking to expand or relocate. In addition, active recruitment calls are being made by our partners at DCI,” he says. Before the marketing campaign began, web traffic on GOED’s business website, www.business.utah.gov, was averaging 40–50 hits a week out of California. Now the site is receiving and tracking 300–400 hits per week from the Golden State. The initiative has also helped draw national media attention to Governor Herbert’s focus on economic development and garnered him interviews with national media outlets like Bloomberg News and CNBC. Caras says the campaign was designed around the results of a survey DCI conducted for GOED with 249 national site selectors. Among the survey questions, participants were asked to describe Utah’s strengths and challenges from a location perspective. “Through the survey, we found there was a need to market the fact that Utah is home to five major metropolitan areas spread from north to south, has a young, highly educated workforce, enjoys a successful international airport, and is also home to an inland port,” he explains. "We took what we learned from DCI’s survey and worked with Richter7 to develop the creative side, or message, we have been marketing to businesses on the West Coast." The advertisements developed by Richter7 and GOED’s staff were then placed in the Wall Street Journal along with the advertising wraps covering Fortune magazine editions. A team comprised of representatives from DCI along with Caras, Miller and Gary Harter, GOED’s managing director of business creation, developed a demographic profile of approximately 1,000 West Coast businesses that best fit Utah’s targeted economic cluster industries. The Fortune magazines were sent to business executives within that demographic profile. The Personal Touch The marketing campaign has been strengthened by the fact that GOED partner, EDCUtah, has an office in Southern California. Michael Flynn is EDCUtah’s man on the ground there. As director of proactive recruitment, he has joined leaders from GOED in the mini trade missions to California. Derek Miller, GOED’s managing director of business incentives and growth, says it is “definitely beneficial to have Flynn stationed in Southern California. The businesses we have contacted have been delighted to hear that EDCUtah has a man living on the West Coast that they can work with.” Flynn says having GOED make the advertising investment on the West Coast is significant to Utah’s overall proactive business recruiting strategy. “The ads are opening doors. They are introducing Utah to potential companies and raising the level of awareness among West Coast businesses regarding Utah,” he explains. “Just last week, a company I had been working with emailed me a scanned copy of one of the Utah ads. The ad had captured his attention and he was interested in restarting a business location conversation we had held with him previously,” Flynn continues. “Because of the ads, a potential project that had been stalled was suddenly moving forward again, and I know that seeing the ad helped motivate the company to take another look at Utah. GOED's advertising investment, coupled with EDCUtah's staff investment, helps further both organizations’ reach on the West Coast. It's really a perfect partnership." During the campaign’s first phase, 164 West Coast companies were vetted and contacted. Six of those companies received personal visits from Eccles, Miller and Flynn, with four others being contacted in telephone conference calls. Since those personal visits were made, one company is currently working through the incentives application process while another company has been added to EDCUtah’s project pipeline. Another company, Accelerated Payment Technologies, has already moved its headquarters from Fountain Valley, Calif., to Pleasant Grove, adding 20 jobs to the local economy. Twenty more companies were contacted by phone or personal visits from other GOED staff at a recent trade show. Four of those companies, all from the renewable energy industry, were recently referred to EDCUtah for further project development. Funding for the campaign came from a $2 million appropriation by the Utah legislature in 2009. However, due to cuts in the appropriation, the funding was trimmed to $1 million. "Despite the cut, recognizing what was going on with the economy, the legislature and Governor Herbert were all very forward thinking in allocating the money for the West Coast campaign," says Caras. In order to continue the West Coast marketing campaign into the future, GOED is asking the Utah legislature to renew the marketing campaign funding during the 2011 legislative session. In fact, Miller says renewing funding for the campaign is one of three top legislative priorities for GOED. “Our West Coast marketing campaign has been very successful. It’s been a good thing and its continuation is a top priority for us. We are currently working with various legislative committees now to prepare for the next legislative session and have high hopes that our legislators will see the value of this important campaign.” If GOED receives the funding that it seeks, Caras says the marketing campaign will add another level to the effort in 2011. DCI will identify business executives on the West Coast with ties to the Beehive State. One targeted group will be alumni from Utah’s many colleges and universities. “We plan to tap into relationships with Utahns living outside the state and seek their help in opening doors for us,” Caras says. “We’ve already seen how well this can work. One California CEO we contacted opened his door to us because he had recently purchased a second home in Park City.” “The West Coast campaign has resonated with business leaders and site selectors all around the country who are putting Utah on their short lists of expansion locations,” notes Spencer Eccles, executive director of GOED. “Utah is widely recognized as a safe, stable and business-friendly place to conduct business.”
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