Utah puts a headlock on high-tech bonafides in 2019

SALT LAKE CITY — You’d expect to see some pretty prodigious innovations coming out of a state that was one of just a handful at ground-zero when the internet was born.

Utah has more than held its own in the whizz-bang world of technology over recent decades, but 2019 may go down as the year the Beehive State put a permanent headlock on its high-tech bona fides.

It was also a year that saw some of the state’s most successful companies flexing their individual and collective might to help ensure that the successes of today are bolstered by a steady influx of students armed with the critical tech skills of tomorrow.

Data reflects economic juggernaut

Starting in February, the University of Utah’s Kem C. Gardner Policy Institute doled out results of an expansive, two-year study focused on the state’s technology sector. Even for those who may have been keeping a close eye on the evolution of Utah’s tech realm, the results from this first-of-its-kind analysis were remarkable.

The Gardner report highlight reel reflects a Utah tech sector that’s built an enormous and still-growing footprint while becoming the prime driver of the state’s economy.

As of the close of 2018, tech was responsible for 1 in 7 jobs in the state, directly and indirectly supporting over 310,000 Utah employees, contributing nearly $30 billion to the state’s gross domestic product (about 18% of total) while paying annual wages of nearly $88,000, almost double the annual average for all other industries.

Underlying data tracking job growth rates reflect that burgeoning Utah tech is not a bubble or anomaly, but rather a force that’s likely to drive an even bigger segment of the state’s economy going forward. That growth factor is outpacing other Utah industries, and the national tech employment rate by a 2-to-1 margin. According to the report, in terms of total employment and wages in the private sector, no state with an economy of Utah’s size had a larger tech industry as of 2018.

Lawrie Allred, HTS engineer, hands a cell plate to a co-worker while seeding cells at Recursion Pharmaceuticals at The Gateway in Salt Lake City on Tuesday, Oct. 30, 2018.

Lawrie Allred, HTS engineer, hands a cell plate to a co-worker while seeding cells at Recursion Pharmaceuticals at The Gateway in Salt Lake City on Tuesday, Oct. 30, 2018.
Kristin Murphy, Deseret News

When the first of the report’s numbers surfaced last winter, Lt. Gov. Spencer Cox was gobsmacked.

“We know that the growth is happening and that it has been big, but I don’t think I even realized how big it really is,” Cox said at the time. “Double the growth rate of our other industries, but double the growth rate across the country is a big deal.”

Let’s make a deal

While tech initial public offerings and megadeals were the hallmarks of 2018, the year that followed had more than its share of capital inflow and, notably, three jumbo venture rounds that helped boost operations for a new crop of Utah high-tech heavy hitters.

Back in April and still a few months shy of its year-and-a-half anniversary, expense management innovator Divvy nailed down a whopping $200 million funding round.

The Lehi-based company continued a scorched-earth rampage, building its client list from zero to 3,000 in its first 18 months in business.

Divvy co-founder and CEO Blake Murray said that in spite of the company’s breathtaking growth rate, the new funding will accelerate ongoing product development with the goal of making Divvy an indispensable tool for expense finance professionals.

“We’re going to remain heavily indexed on product and engineering,” Murray said. “And continue to have a maniacal focus on who our buyer is, the CFO, the VP of finance, the comptroller … and responding to what they need in their day-to-day job.

“We want it all to roll through Divvy.”

Salt Lake biotech company Recursion Pharmaceuticals announced a $121 million funding last summer, pushing the 6-year-old startup’s total financing north of a quarter-billion dollars. And, financial data tech innovator MX Technologies clocked its own nine-figure deal in June. The company is helping provide the intelligence and operations capabilities behind the still-blossoming world of online and mobile banking.

“Fundamentally, we ingest mounds and mounds of data from different sources, then normalize and structure and enhance that data,” said MX chief customer officer Nate Gardner. “The end result is clean and clear information that shapes the customer’s digital experiences in mobile and online banking and financial services.”

Attitude, aptitude and altitude

Pluralsight CEO Aaron Skonnard, Banyan CEO Carine Clark, Domo CEO Josh James, Qualtrics CEO Ryan Smith, Vivint CEO Todd Pedersen and InsideSales CEO Dave Elkington take the stage during the Silicon Slopes Tech Summit at the Salt Palace Convention Center in Salt Lake City on Thursday, Jan. 31, 2019.

Pluralsight CEO Aaron Skonnard, Banyan CEO Carine Clark, Domo CEO Josh James, Qualtrics CEO Ryan Smith, Vivint CEO Todd Pedersen and InsideSales CEO Dave Elkington take the stage during the Silicon Slopes Tech Summit at the Salt Palace Convention Center in Salt Lake City on Thursday, Jan. 31, 2019.
Kristin Murphy, Deseret News

A group of five Utah tech founders dropped a challenge on state leaders in the first month of 2019, offering to pony up $5 million in personal matching funds to get a statewide computer science curriculum off the ground. While state lawmakers failed to construct a funding proposal to leverage the opportunity — and left $2 million on the table — the gauntlet did lead to a Utah computer science master plan and, as the year moves toward its close, commitments from all 41 Utah school districts to get on board.

In December, Gov. Gary Herbert announced he would include in his upcoming budget $10 million in new funding for statewide computer science curriculum — currently available in less than half of the state’s public schools — and encouraged the Legislature to get his back on the proposal.

West High School 10th grader Fikir Teklemedhin joined Herbert and others to announce the funding, and didn’t mince words when she shared her take on the importance of making computer science education widely available to Utah students.

“By failing to make computer science courses available in every public school, we’re depriving children not only of potential passion but of opportunities to thrive in any field they choose,” Teklemedhin said.

“We cannot overlook the future of this generation and hope they stumble upon success.”

Qualtrics co-founder and CEO Ryan Smith, one of the private contributors to the new statewide tech education effort, is also making moves internally to help boost the pipeline leading to tech-skill enabled future graduates.

In November, Smith and team revealed plans to double the size of their Utah County headquarters and, as part of the expansion, open a brand-new 40,000-square-foot day care facility that will focus on early science, technology, engineering and math (STEM) education.

Utah customer experience giant Qualtrics announced plans on Thursday, Nov. 21, 2019, to double its existing Provo headquarters and add an additional 1,000-plus jobs. The company has wider plans in place to more than double its global workforce to 8,000 in the next five years.

Utah customer experience giant Qualtrics announced plans on Thursday, Nov. 21, 2019, to double its existing Provo headquarters and add an additional 1,000-plus jobs. The company has wider plans in place to more than double its global workforce to 8,000 in the next five years.
Qualtrics

The project represents a coda on a year of expansion that’s seen Qualtrics assume naming rights — and 275,000 square feet — of a new office tower in Seattle, as well as new facilities in Dublin, Ireland, and Chicago. The collection of new digs will help house a staff expansion that will add some 5,000 new employees to the current roster of 3,000 over the next four years.

Smith said Qualtrics is relocating some 200 new employees a year to Utah, and one of the first questions the company typically gets from the newbies is, “How are the schools and what is the environment for families?” That employee feedback, his own experiences as a father of four, and a built-in urge to disrupt and improve old ways of doing things led Smith inexorably toward Cloud Village.

“We own the building right across from our HQ and it has about 40,000 square feet of space,” Smith said. “We had this idea of ‘What if we turned it into the ultimate day care for working parents at Qualtrics?’ We thought that this could really change their lives and change the lives of their children if we do it right.

“We had a chance to design the space, pick the provider and design the curriculum. We were thinking, if you could build the MIT of day care, what would it look like?”

And, some ephemera

Overstock employees high five CEO Patrick Byrne after he parachuted into the groundbreaking ceremony of the company’s new corporate campus, referred to as the “Peace Coliseum”, in Midvale on Friday, Oct. 10, 2014.

Overstock employees high-five CEO Patrick Byrne after he parachuted into the groundbreaking ceremony of the company’s new corporate campus, referred to as the Peace Coliseum, in Midvale on Friday, Oct. 10, 2014.
Deseret News

Patrick Byrne, the mercurial figurehead and longtime CEO of Utah-based Overstock.com, earned a series of 2019 headlines — first for reports of his relationship with Maria Butina, a Russian once suspected of being a spy but only convicted of working in the U.S. as an “unregistered foreign agent,” and later for resigning from (and divesting interests in) the e-commerce company he helped build. Byrne claimed his relationship with Butina was encouraged by “the Men in Black” and that he was a central figure in a “deep state” conspiracy. Since then, numerous lawsuits have been filed against Byrne and others alleging securities violations.

Utah’s sole Democrat in Congress, Rep. Ben McAdams, took his opportunity at a committee hearing focused on cryptocurrency in October to ask Facebook founder and CEO Mark Zuckerberg what he was going to do help stem the tide of online child pornography. McAdams noted a report that cited some 45 million images and videos of child sex abuse had been found online in 2018 alone.

“Mr. Zuckerberg, yes or no, do you believe that online social media platforms such as Facebook have a role to play — even an obligation — to ensure that their platforms are safe for our vulnerable populations, especially our children?” McAdams asked.

“Congressman, absolutely, and we do a lot of work on this,” Zuckerberg replied.

Amazon finally opened up its debut Utah fulfillment center near the Salt Lake City International Airport to media in April and then, a couple months later, announced it will be building another one in West Jordan, specifically for shipping larger items. Shipping robots outnumber the human workers at the 855,000-square-foot facility that operates around the clock, seven days a week.

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