As businesses strive to recover from the pandemic, states in the West and Southwest double down on their strongholds in tech, financial services and logistics.
CERTAINTY IN AN UNCERTAIN WORLD
In a time of political, social and economic uncertainty, Texas offers businesses a bedrock of stability and “certainty in a known quantity,” says Robert Allen, CEO of the Texas Economic Development Corporation. The tax climate, reasonable regulations, access to talent and low cost of living have made the Lone Star State an even more attractive destination since the start of the pandemic. “When you are a CEO making a multimillion-dollar decision that’s going to impact hundreds or thousands of employees, you need certainty as best as you can get,” Allen says.
Several significant projects have been announced in recent months. BAE Systems announced in August 2020 it would expand its operations at a new campus in Austin that will eventually house more than 1,400 employees. Brokerage giant CBRE also announced in October 2020 it would relocate its headquarters from Los Angeles to Dallas. “It’s hard to only talk about the positives when there are so many negatives out there, but the fact remains the facts. Texas was on top going into this, and I think we’ll be on top coming out of it. It’s not by accident that companies continue to choose Texas and expand here,” Allen says.
GROWTH IN THE BIGGEST LITTLE CITY
The Silver State is almost a tale of two states, says Bob Potts, deputy director of the Nevada Governor’s Office of Economic Development. While discretionary spending, leisure and hospitality have taken a notable hit on the economy of Las Vegas, economic diversification in the Reno area has helped jobs and industry bounce back faster than they have in the south. “Reno’s doing much better than the nation as a whole and compared to southern Nevada, and a lot of it comes down to the diversification efforts,” Potts says.
Several innovative tech companies have made notable announcements in the region in the past year. SaaS company Discover Podium expects to double its staff in the next year and reach 300 employees within five years. Software company PlusPlus plans to hire 100 employees over the next five years, something CEO and founder Marko Gargenta said in a release was driven by the talent shortage in the Bay Area. “We were looking for a place that had a large enough talent pool with good schools and a high quality of life that is also easily accessible. Reno topped the list,” Gargenta said.
The lithium industry represents another emerging opportunity in the state, driven by the growing demand for lithium-ion batteries in everything from devices to electric vehicles, Potts says. “We have big lithium deposits here and several projects happening in the lithium mining industry in Humboldt County and Esmeralda,” Potts says.
A BEEHIVE OF TECH
Tech development in the Silicon Slopes is helping pull Utah’s economy through the pandemic, says Val Hale, executive director of the Utah Governor’s Office of Economic Development. The ability of tech workers to work remotely from home has also helped companies like Pluralsight to maintain operations. “Most of our tech companies are doing quite well despite the pandemic. For the most part, people have been able to get back to work, even if it’s at home,” Hale says.
In addition to continued growth in tech, there have been developments in various other sectors in the Beehive State. Nibley-based Malouf announced in May 2020 a $120 million investment over the next ten years and the addition of 1,200 jobs as they expand their headquarters in Cache Valley. GoHealth broke ground in August 2020 on a 156,000-square-foot office in Lindon City that will create 1,160 jobs. And in October 2020, Quotient announced it would locate an office in Salt Lake City and create more than 500 new jobs. “Our economy is fundamentally sound, and we anticipate things will continue to grow here,” Hale says.
WIDE-OPEN TO NEW OPPORTUNITIES
With wide-open spaces and an environment suited for remote work, the Cowboy State is well-positioned to thrive in an era of social distancing. While the pandemic led to shutdowns of many state economics, Wyoming mostly stayed open, something that bodes well with its low tax and business-friendly environment. Gov. Mark Gordon was also one of only four governors to receive an “A” rating from the Cato Institute for fiscal responsibility. Cato notes it positions the state well in the recovery by attracting people and businesses as a haven free from income taxation. “Restarting our economy is not a race to be won but a cooperative effort. Our approach has created a model for success that can be applied throughout the country,” Gordon said.
Wyoming has seen several notable investments and expansions in the past year. In April 2020, Kennon Products broke ground on a corporate and manufacturing building in Sheridan. TBC Manufacturing recently announced the relocation of its headquarters from Colorado to Cheyenne. And in September 2020, the Wyoming Banking Division approved Kraken’s application to create the world’s first Special-Purpose Depository Institution (SPDI), a move that will further strengthen the state’s hold in the cryptocurrency industry.
FAST GROWTH AND FISCAL RESPONSIBILITY
Several rankings indicate Idaho has maintained one of the fastest-growing economies since the start of the pandemic. Alex Adams, administrator in the Idaho Division of Financial Management, attributes that to the state’s fiscal responsibility, tech community, ability to support remote work and quality of life. In a trend opposite of most other states, Idaho sees an influx of residents and projects the largest budget surplus in state history. “Idaho is a great state for remote work. We have a low-cost living, outdoor recreation and many other things that have become increasingly attractive,” Adams says.
The food manufacturing and processing sectors have continued to expand. TORCHx opened a new home office and expanded operations in Boise in August 2020, and in September, Ericsson agreed to acquire Boise-based Cradlepoint for $1.1 billion. Amazon is also nearing the completion of a new distribution center in Nampa that will employ 2,000 workers.
Part of the plan is to reinvest that $587 million budget surplus back into infrastructure projects, broadband and to shore up small businesses. “If we can get Covid under control, based on how we currently have a surplus in our budget, the governor has indicated he would make investments in our economy that would have long-lasting benefits and create jobs,” Adams says.
SPURRING NEW ENTREPRENEURIAL GROWTH
The Centennial State’s economy has held firm in the face of the pandemic, says Michelle Hadwiger, deputy director of global business development at the Colorado Office of Economic Development and International Trade. Q3 2020 business filings were up 25.5 percent year-over-year, as entrepreneurs bring new business models and ideas to market. Colorado has also experienced one of the smallest drops in GDP due to Covid-19, which positions it for a strong recovery, Hadwiger says. The diverse knowledge-based economy continues to see robust growth in bioscience, aerospace and information technology. “Remote work has further fueled our growth by attracting an influx of companies and talent across industries that covet Colorado’s quality of life and its proximity to global and domestic markets,” Hadwiger says.
The state has seen several notable investments and expansions in the past year. Google Lunar XPRIZE competition finalist ispace announced in November 2020 that it would locate its first U.S. headquarters in Denver. Steel product manufacturer Evraz announced in August 2020 a $500 million expansion in Pueblo that would create 200 jobs. And in November 2020, publicly traded REIT Healthpeak announced the relocation of its headquarters from Irvine, California to Denver. “Our diverse, knowledge-based economy, world-class talent and Colorado’s entrepreneurial ecosystem continue to pace our perennial ranking among the top economics in the nation,” Hadwiger says.
The Arizona Commerce Authority recently announced collaborations with tech companies to enhance talent in the state. In July, the Maricopa County Community College District announced working with Microsoft to provide military veterans opportunities to earn fast-track certification to careers in IT. And in October 2020, the Arizona Commerce Authority, with the support of Amazon Web Services, announced a statewide commitment to train and certify 5,000 students for entry-level cloud computing careers by June 2022. The program will integrate AWS Academy and AWS Educate programs into high school, community college and universities with content mapped to in-demand technical careers.
“As Arizona continues to attract more high-tech jobs to the state, this collaboration will help provide workers the education and skills they need to fill those jobs,” said Gov. Doug Ducey in a statement.
The Grand Canyon State has also experienced a steady flow of investments and expansions since the start of the pandemic. In March, Root Insurance expanded to Chandler, creating 480 jobs to serve its growing West Coast customer base. Shellpoint Mortgage Servicing announced in August 2020 it would establish operations in Tempe and create 600 new jobs by the end of 2020. Sandvik Materials Technology announced in September 2020 an expansion to Tucson. And in October 2020, Sportswear company WOW Studios announced it would locate its new headquarters in Tucson.
The tech momentum the Big Sky Country cultivated in recent years is helping it pull through the pandemic. Tech entrepreneurs and venture capital continue to flow into growing hubs like Billings and Bozeman, says Bridger Mahlum, government relations director at the Montana Chamber of Commerce. In August 2020, CACI International, acquired Montana-based Ascent Vision Technologies, a leading provider of solutions to support reconnaissance, unmanned aircraft and aircraft defense systems. “We continue to attract high-tech industry, whether that’s big companies wanting to create jobs here or venture capital flowing into startups,” Mahlum.
One possible boost to economic growth is the state recently elected its first Republican governor and now has a red majority in the house and senate. “I think there may be a resurgence to bring back some of our natural resource industries like mining and coal. Given we have an abundance of natural resources, we may bring back some development and job creation in those fields,” Mahlum says.
#39: NEW MEXICO
TAKING TO THE SKIES AND THE BORDER
The Land of Enchantment has seen a notable influx of businesses leaving cities like Los Angeles, San Francisco and New York in search of the most cost-effective and stable business climates, says Alicia Keyes, cabinet secretary at New Mexico Economic Development. The Santa Teresa border region continues to grow as a hotbed for Foreign Direct Investment, where the port of entry saw overall trade increase by 17 percent in 2019. Taiwanese company Admiral Cable is constructing a $51 million facility in the region, and Taiwanese metal manufacturer Xxentria announced in September 2020 it would relocate a distribution facility to the area. “It’s part of an emerging trend for companies in Asia that don’t necessarily want their manufacturing in China and want to put it on the border. We have a great relationship with [the Mexican State of] Chihuahua, so we’re doing a binational agreement where they can do more heavy industry in Mexico and have assembly and headquarters in New Mexico,” Keyes says.
New Mexico is also a growing hub for the lower Earth space industry, Keyes says. HAPSMobile announced in June 2020 it will test operations and development of a specialized communications platform at Spaceport America. Spinlaunch and Sceye are also testing new technologies in the area. “We’re really seeing an influx of space companies,” Keyes says.
INNOVATING NEW OPPORTUNITIES
Despite its struggles in Portland, the Beaver state still holds great economic potential and has seen several notable announcements in the past year. In January 2020, Apple announced 30 new jobs at an expansion in Portland. Swiss footwear company On Footwear relocated its North American headquarters from Clearwater, Florida, to Portland. Portland Pet Food Company, a recipient of GPI’s Growing Small Business Globally export assistance scholarship, announced in August 2020 it would soon be selling its products in Japan. And in September 2020, Adidas announced it was nearing completion of its newly expanded headquarters in North Portland.
Oregon is now looking to capitalize on the momentum with a framework to focus on innovation. In August 2020, Business Oregon announced a Futures Commission to design a 10-year innovation plan to direct the future of innovation policy as part of its economic development strategy. “Oregon’s ability to foster the growth and scalability of innovation-focused businesses will play a huge role in our ability to recover from this economic crisis, and set the stage for long-term prosperity,” said Business Oregon Innovation and EntrepreneurshipManager Kate Sinner in a statement.
While many sectors took a beating in the spring of 2020, technology giants have continued to grow. That has benefited Washington state as tech companies like Amazon, Microsoft, Facebook and Google continue to double down on their investments in the Seattle area, says Lisa Brown, Director of the Washington State Department of Commerce. The state has also experienced substantial growth in several agricultural exports due to its strong maritime sector and access to Asian markets. Clean energy development also remains a priority for the governor and legislature, Brown says. “The diversity of the Washington State economy has been a great benefit. In addition, the quality of life and affordability in central and eastern Washington has led to an in-migration of people in Spokane and the Tri-Cities area as they leave more expensive places on the coast.”
GROWING IN THE GOLDEN STATE
With headlines about restrictions, rising homelessness and potential tax increases, the U.S.’s largest state economy seems to be in trouble on the surface. Nevertheless, the state remains home to 53 Fortune 500 companies and one of the nation’s top talented workforces. Officials believe the short-term economic impact of restrictions will be offset by the long-term benefits of stamping out the virus. “Covid will be with us for a long time, and we all need to adapt. We need to live differently. And we need to minimize exposure for our health, for our families and our communities,” Governor Gavin Newsom said in a statement.
California remains home to an advanced manufacturing hub in Los Angeles and the capitol of tech in Silicon Valley. The Governor’s Office of Business and Economic Development (GO-Biz) announced in November 2020 it had issued more than $80 million in tax credits for companies to create more than 6,500 jobs in the state. Lockheed Martin announced a $100 million investment and 450 new jobs, Better Holdco announced a $55 million investment and 3,500 new jobs, and diagnostic test manufacturer Cepheid announced a $250 million investment in Lodi and Santa Clara County that will create 2,500 jobs. “Companies like Cepheid, which are leaders in science and technology, are unique to California’s economy and what makes us successful,” said Chris Dombrowski, GO-Biz acting director, in a statement. “Our continued economic vitality and recovery depends on sustained support and investment in these innovators.”