After several years of absence, we recently returned home to Beehive State. So much has changed in the past decade, but nothing like Utah’s economy.
What was once a regional economy defined by small, local businesses has quickly evolved into a mini-Silicon Valley with hundreds of venture-funded start-ups and billions of out-of-state capital. While many applaud these changes, we are concerned.
For the past few years, we’ve lived in the San Francisco Bay Area, where one of us was working for a venture-funded startup and the other was pursuing a Masters in Business Administration. While we enjoyed our time there, we also became increasingly skeptical of Silicon Valley’s business model. One defined by the rise and fall of big winners, like Facebook, and big losers, like Theranos. A company where business is seen primarily as a short-term mechanism for making money, rather than a long-term commitment to people and places. A country where growth comes at all costs, including exhausted founders and tech-addicted customers.
The majority of the people we met in San Francisco were genuinely committed to changing the world, but the city is home to nearly 20,000 homeless people and the highest income inequality of any city in the country. This economic powerhouse that so many people have long admired felt more dystopian than utopian.
Historically, Utah has been the philosophical opposite of the California economic model. In the early days of our state, we were seen as an oddity in an American West defined by rapacity and harsh individualism. Where the gold rushes polluted, exploited and extracted, the first settlers of Utah made up of land banks, shared irrigation systems and complex social protection systems for those left behind.
We have always been more community oriented, less interested. Our capitalism has always been more inclusive, less win-win. We have always known and loved each other. In Utah, all the boats go up.
This cultural ethic of economic inclusion still defines us. In his pioneering research on upward mobility, Harvard economist Raj Chetty named Salt Lake City as one of the last places where the American dream is still a reality. He found that over the past 40 years, the chances of a poor child escaping poverty were higher here than virtually any other place in the country. It is not a coincidence. It is the result of a unique and inclusive economic model. And it is worth fighting to preserve it.
In the Utah model, businesses are owned by people who actually live in our communities and who share long-term interests. Work and wealth are means to a greater end, not ends in themselves. We are building for the next generation, not the next financial quarter. Our companies reflect deep commitments to people and places.
We understand, as essayist Wendell Berry once said, that “while many of our problems are great, they don’t necessarily have great solutions.”
Both of our parents were successful entrepreneurs. But they were also active Little League coaches, engaged parents and dedicated members of the community. This is the Utah model.
The dichotomy is clear. As more of our economy shifts from the Utah model to the Silicon Valley model, we fear there is an unrecoverable loss. Over the past decade, our business community has increasingly sought to emulate the economic success of the Bay Area. We have welcomed billions of funds from institutions unrelated to Utah. We have accepted a start-up culture obsessed with âgoing outâ – the opposite of rooting.
Our approach to work has been transformed in a thousand ways by our admiration for the most famous founders of technology. Many of our most powerful companies are no longer controlled by the Utahns who created them. And, as a result, our economy is increasingly concentrated in the hands of distant investors maximizing returns and disconnected from consequences, rather than local business owners balancing the needs of employees, customers and shareholders. It should concern us all.
Utah will continue to grow and change. It is worth adopting. Our participation in an increasingly global economy will bring the benefits of greater diversity and economic opportunity for those who come after us. We believe Utah can and should be a leader in technology, energy, manufacturing and the arts. But we have to do it on our own terms. Without letting go of what makes this place so special.
The economic model in much of the rest of the country is deeply flawed. Wealth inequality in the United States is at its highest post-war level. In the decade following the Great Recession, the richest quintile of Americans saw their wealth increase by double digits, while the rest of America’s wage earners saw their wealth decline by 20%. And the outlook is not improving. Income inequality in the United States is the highest in five decades since the Bureau of Labor began tracking it.
These are difficult times. More than ever, Utah should export its economic model, not import it from elsewhere.
Madeline Crawley is the studio director of Provo-based artist Colby A. Sanford. She holds a BA in Art History from Brigham Young University and an MA in Art History from University College London.
Ryan beck is the Managing Partner of Tapestry Capital, a Salt Lake City-based company that focuses on long-term investments in Utah businesses. He holds a BS in Business Strategy from Brigham Young University and an MBA from the Stanford Graduate School of Business.