After a number of years away, we recently returned home to the Beehive State. So much has changed in the past decade, but nothing quite as much as Utah’s economy.
What used to be a regional economy defined by locally owned small businesses has quickly evolved into a mini-Silicon Valley with hundreds of venture-backed start-ups and billions in out-of-state capital. While many applaud these changes, we worry about them.
For the past few years, we lived in the San Francisco Bay Area, where one of us worked for a venture-backed start-up and the other pursued a master of business administration. While we enjoyed our time there, we also grew increasingly skeptical of the economic model of Silicon Valley. One defined by the boom and bust of big winners, like Facebook, and big losers, like Theranos. One where business is seen primarily as a short-term mechanism for getting rich, rather than a long-term commitment to people and places. One where growth comes at any and all costs, including burned-out founders and tech-addicted customers.
The majority of people we met in San Francisco were genuinely committed to changing the world, yet the city has nearly 20,000 homeless people and the highest income inequality of any municipality in the country. This economic powerhouse that so many have long admired felt more dystopian than utopian.
Historically, Utah has been the philosophical opposite of the California economic model. In our state’s earliest days, we were seen as an oddity in an American West that was defined by rapaciousness and rugged individualism. Where gold rushers polluted, exploited and extracted, the early Utah settlers formed land banks, shared irrigation systems and complex welfare systems for those left behind.
We’ve always been more community-minded, less self-interested. Our capitalism has always been more inclusive, less winners-take-all. We’ve always known and cared for one another. In Utah, all boats rise.
That cultural ethos of economic inclusivity still defines us. In his pioneering research on upward mobility, Harvard economist Raj Chetty pointed to 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 odds of a poor kid escaping poverty were higher here than virtually any other place in the country. That isn’t a coincidence. It’s the result of a uniquely inclusive economic model. And it is one worth fighting to preserve.
In the Utah model, businesses are owned by people who actually live in our communities and who have shared long-term interests. Work and wealth are means to a greater end, not ends in themselves. We build for the next generation, not the next financial quarter. Our ventures reflect deep commitments to people and places.
We understand, as the essayist Wendell Berry once said, that “although many of our problems are big, they do not necessarily have big solutions.”
Both of our parents were successful entrepreneurs. But they were also active Little League coaches, engaged parents and dedicated community members. That is the Utah model.
The dichotomy is clear. As more of our economy shifts away from the Utah model toward the Silicon Valley model, we fear there may be an irrecoverable loss. Over the past decade, our business community has increasingly sought to emulate the economic success of the Bay Area. We have welcomed billions in capital from institutions with no Utah ties. We have accepted a start-up culture obsessed with “exits” — the opposite of rootedness.
Our approach to work has been transformed in a thousand ways by our admiration of tech’s most famous founders. Many of our most powerful companies are no longer controlled by the Utahns who started them. And, as a result, our economy is increasingly concentrated in the hands of distant investors optimizing returns and disconnected from consequences, rather than local business owners balancing the needs of employees, customers and shareholders. That should concern all of us.
Utah will continue to grow and change. That is worth embracing. 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 that Utah can, and should, lead in technology, energy, manufacturing and the arts. But we should do so on our own terms. Without letting go of what makes this place so special.
The economic model in much of the rest of this country is deeply flawed. U.S. wealth inequality is at a postwar high. In the decade since the Great Recession, the richest quintile of Americans saw their wealth grow by double digits while the rest of American earners saw a 20% reduction in wealth. And the outlook is not improving. U.S. income inequality is the highest it’s been in the five decades since the Bureau of Labor began tracking it.
These are challenging times. Now more than ever, Utah should be exporting its economic model — not importing it from somewhere else.
Ryan Beck & Madeline Crawley and their daughter Louise
Madeline Crawley is the studio manager for Provo-based artist Colby A. Sanford. She holds a B.A. in art history from Brigham Young University and a Master’s in art history from University College London.
Ryan Beck is the managing partner at Tapestry Capital, a Salt Lake City-based firm focused on making long-term investments in Utah businesses. He holds a B.S. in business strategy from Brigham Young University and an MBA from the Stanford Graduate School of Business.