Big Business in Utah

The following article by College of Engineering Dean Richard B. Brown and College External Relations and Development Director Marilyn Davies was published in the November/December issue of PE Magazine, the official publication of the National Society of Professional Engineers. It details Utah’s explosive business and tech sector growth.

How does a state with just over three million people consistently rank as the #1 Best State for Business (Forbes), #1 Best State for Employment (US News & World Report), #1 Fastest Growing Tech State (Business Insider), and #1 Best Economic Outlook (American Legislative Exchange Council)? At least part of the answer lies in Utah’s long-running Engineering Initiative, the state’s effort to create a technical workforce large enough to attract industry investment and stimulate economic development.

The initiative began in the early 2000s during then governor Michael Leavitt’s tenure. As he puts it, “Too many of our great startups were migrating to Silicon Valley where venture capital and technical talent were more plentiful.”

Leavitt wanted to create a roadmap for building a high-tech economy, and spent time getting input from Silicon Valley industry leaders. On one of those trips, he met with John Warnock, University of Utah alumnus and cofounder of Adobe Systems. After hearing Leavitt explain his vision for Utah, Warnock said, “If you are serious about building a high-tech economy, you’d better do something about engineering education.”

Designing the Initiative

Senate Bill 61, known as the Engineering Initiative, laid the foundation with a long-range plan to double and then triple the output of engineering and computer science graduates. The model is deceptively simple: appropriate targeted state funds directly to postsecondary engineering and computer science programs, tied to growth in degree output; add industry management to prevent political infighting and provide oversight; and repeat once the goals are met.

The bill passed in the 2001 state legislature with help from Utah Senator Lyle Hillyard, Executive Appropriations Committee chair, who drafted the original version and continued to champion the Engineering Initiative through a series of legislative sessions.

Since then, a succession of governors, legislators, and business leaders have kept the initiative alive through good economic times and bad.

Several features of the plan are responsible for its success and longevity:

  • Funds provided by the legislature are apportioned by a nonpartisan Technology Initiative Advisory Board, the members of which are industry leaders appointed by the governor.
  • The TIAB requires proposals from the eight state higher education institutions with the funds they are requesting and the ways the money would be used.
  • Allocated funds go directly to the engineering colleges, rather than to the general university budgets.
  • Universities are required to match the ongoing funds dollar-for-dollar, shifting the university budget toward more support for engineering.
  • The Utah System of Higher Education monitors the number of graduates in engineering and computer science programs.
  • The TIAB reports annually to legislative appropriations committees on the university match, ways the funds were spent, and graduate growth.

Over 17 years, the state has invested more than $10 million in one-time moneys, used to improve or expand teaching laboratories, and distributed a total of $142.5 million in ongoing funds, put toward hiring faculty. When matched by the universities, that’s $285 million of ongoing funds invested in growing engineering and computer science education.

Up and Up

The results have been compelling. Since the Engineering Initiative was started, the state’s higher education system has more than doubled the annual output of engineering and computer science graduates, while Utah’s GDP grew to $156.8 billion from $70 billion.

In the past 12 years, tech-related employment rose from 46,000 to more than 87,000. Utah’s growing supply of engineering and computer science graduates is fueling expansion in IT, electronics, banking, and educational and biotechnology. Manufacturing and the defense industry are burgeoning as well. In 2016, Utah tech jobs grew by 7.69%, the highest percentage growth in the nation.

Perhaps nowhere has the transformation been more dramatic than at the University of Utah, where the number of engineering graduates rose from 366 the year before the initiative began to more than 1,000 last May.

The majority of Engineering Initiative dollars at the university have been spent on hiring more than 80 tenure-track faculty, bringing the total number of engineering faculty to 213.

An aggressive K–12 outreach program and the lure of plentiful jobs have created unprecedented student demand. This fall, 20% of the University of Utah’s incoming freshman declared their intention to major in engineering or computer science, compared with just 7% in 2005.

The College of Engineering has also seen an increase in the quality and diversity of its incoming students. Freshman demographics show an increase of students of color from 10% in 2004 to 31% in 2016. The percentage of female students increased to 25% from 11%. And the average high school GPA of students directly admitted to the College of Engineering is 3.9.

State Success Factors

Several factors unique to Utah have contributed to the Engineering Initiative’s long-term success, but perhaps most important is the shared vision among government, industry, and higher education leaders. Utah’s relatively small and concentrated population promotes fluid and frequent communication among constituent groups. In addition, having a part-time citizen legislature means that state senators and representatives are often business leaders who understand workforce needs, and who have a vested interested in growing the economy.

Another factor is Utah’s relatively small system of higher education, with just eight colleges and universities. Academic programs, especially in the STEM disciplines, are fully articulated between schools to allow ease of transfer among institutions. And Utah’s young and rapidly growing population is boosting enrollment.

It also bears noting that Utah’s fiscal conservatism and balanced budget requirement kept the state from falling into deficit in the recent financial crisis. A legislative request like the Engineering Initiative that was designed to stimulate economic growth and add to the tax base through higher-paying jobs was broadly supported during even the leanest years as a good use of funds.

The Engineering Initiative has had a huge positive impact on the state. The growth in tech jobs—paying almost double the average of other sectors—has a “multiplier” economic impact, by creating additional jobs for each technical position.

Talent Wanted

Developing the workforce continues to be industry’s number one issue. Despite Utah’s eight state colleges and universities graduating almost 3,000 engineers and computer scientists last year, the volume isn’t close to meeting demand—with an estimated 5,000 or more unfilled positions. As a result, corporate leaders have played a major role in driving the Engineering Initiative by lobbying the legislature and voicing their concerns to legislators representing their districts.

A request for additional funding for the Engineering Initiative in the 2017 legislative session was endorsed by 82 companies representing every district in the state. Prioritized by the Executive Appropriations Committee and backed by the governor, an additional $4 million of ongoing funding was approved. The funds were distributed based on past performance and a collective promise from the eight schools to increase the annual output of graduates from the statewide system by at least 320.

Once that goal is met, the colleges of engineering will ask the legislature for another allocation of funding, with the expectation that it will be provided. Utah’s winning formula works.

As governor, Mike Leavitt realized that “our state’s economic sustainability required a greater abundance of engineering talent.” He challenged the educational system to double and then triple the output of engineering and computer science graduates, “and they responded.”

That led to an unprecedented boom in high-tech startups and corporate expansion in the area that’s now known internationally as “Silicon Slopes.”

Says Leavitt, “Like a moth is attracted to light, business flocks to engineering talent.”

Engineering Initiative Graph

Republished from the November/December 2017 issue of PE magazine, published by the National Society of Professional Engineers.