SALT LAKE CITY — Gov. Gary Herbert listed several Utah accolades during an economic summit on Thursday, including the fourth most diverse economy in the country and a low unemployment rate of 3.9 percent.
But the secret of success, he said, is not so much a secret as it is tried-and-true best practices.
"It’s really quite simple," Herbert said. "We believe in the fundamentals and know how to execute them to grow our economy. We know time and circumstance change but the fundamentals remain constant."
Among those fundamentals, Herbert said, are low, competitive and consistent tax rates and a business-friendly regulatory environment.
"Too many regulations are simply a drag on the economy," he said. "They’re like weeds in a ditch bank, they impede the flow of commerce."
Herbert's comments came during the annual Governor's Utah Economic Summit, which brought together public- and private-sector leaders at the Grand America Hotel. This year's event carried the theme of executing the fundamentals of economic development and included a keynote address by renowned business scholar and Deseret News Editorial Advisory Board member Clayton Christensen.
Christensen spoke about how jobs tend to lag behind the overall economy during and after a recession, both in bottoming out and rebounding to recovery. But during the most recent recessions, he said, the lag time has extended further, resulting in sluggish employment growth while government and business balance sheets recuperate.
"Something has fundamentally gone wrong with our economy, that it’s just harder and harder and harder to bring employment back," he said.
He suggested part of the problem is that the generally accepted measures of success reward businesses that invest in efficiency, finding ways to do more with less and maximizing profits. But job growth, Christensen said, stems from investment into innovations that create new markets and make products available to a wider customer base.
"These measures of success are causing us to invest in innovations that eliminate jobs and not invest in the things that create jobs," he said. "The things we’ve measured historically are not the way we need to measure success in the future."
Nic Dunn, a spokesman for the Utah Department of Workforce Services who attended the event, said Christensen's remarks were particularly relevant in Utah, a state that is known for innovation and doing more with fewer resources.
"During and after the recession there was a big focus on efficiency," Dunn said. "We had to cut the fat, in government, in the private sector, everywhere. Even individual households had to trim their budgets."
Dunn said he appreciated Christensen's emphasis for investment in human capital, or the people who do the work in the state. He said the lessons learned during the lean years of the recession will hopefully propel the state forward as the economy continues to improve.
"A lot of companies have learned how to make do with a lot less in terms of extravagant resources," he said. "Now the question is how do we maximize those resources moving forward?"
Christensen said the steps taken by Utah are in line with where the state and national economy need to go. He said both government and businesses need to look not only at their bottom line, but also how they can help make the good people of the state better.
"I think that’s one thing Utah has to offer the world, that it’s a great place to do business," he said. "But I think we need to invest in our people so they can do more and more remarkable things."
Our message to business in other states and countries is clear: If you're looking to expand and become more profitable, there's no better place to do that than in Utah.
–Governor Gary Herbert
Herbert listed several challenges facing Utah, including air quality management and funding for education and transportation, and called on business leaders to work together with the state officials to identify solutions.
The governor said Utah's successes cannot lead to complacency, and the increasingly global nature of market competition requires the state to "run just to keep up."
"Those at the summit soon have lots of company from those who want to knock them off their perch," he said. "Let’s not forget that the competition is out there, it is formidable and it is growing."
Business, and not government, is the backbone of Utah's economy and the state's future is bright, he said.
"Our message to business in other states and countries is clear: If you’re looking to expand and become more profitable, there's no better place to do that than in Utah."