When Nate and Vanessa Quigley were deciding where to build Chatbooks, the photobook startup the married couple founded together, they looked for a place deep with creative and technical talent — preferably, that they could have all to themselves. That ruled out the rocketship-heavy Bay Area, where Nate’s friends running tech companies told him that “if they hiccup even for a second all of their best talent bolts.”
Florida, the Quigleys’ home at the time, didn’t have enough tech talent. In New York, it seemed the company would need to be in Brooklyn or the Flatiron area to access the right workers—and neither of those places were practical given that the Quigleys have seven kids. Boston, where Nate attended Harvard Business School and had a strong network, didn’t have enough of the creative people the couple would need to run their business. “Also, the winters are too long and the skiing isn’t good,” says Nate.
That left Salt Lake City, where Nate knew a handful of seed stage investors and fellow entrepreneurs. “There was creative and technical talent in a secret spot where I wasn’t competing with rocket ships,” he says. Today the Provo-based company’s team of 65 includes 23 full-timers, the majority men on the technical side, and 42 part-timers, the majority of them millennial moms, who handle art, design and marketing. The staff have a loyalty not commonly found in the Bay Area. Two-and-a-half years after launching, Nate says “We’ve lost zero people that we didn’t want to lose.”
Chatbooks is just one of a growing number of tech companies springing up in Utah. Though the state’s 4,300 tech companies are a small part of the picture, they’ve contributed to some impressive economic growth. Last year the economy in the Salt Lake City metropolitan statistical area grew 6.93%, the fourth-fastest rate among America’s 100 largest metro areas. The nearby Ogden-Clearfield CLFD +0.13% MSA grew even faster, at 7.21% year-over-year. Median annual pay for college-educated workers in greater Salt Lake was $63,600, 36th in the nation, according to Payscale.com. (In Ogden, it’s $57,100).
That may be well below what college-educated workers command in Silicon Valley ($106,000) or New York ($72,300). But given that the cost per square foot for housing in Salt Lake is $138, just 10% of the $1,368-per-square-foot in New York City, according to nonprofit Silicon Slopes, at least some companies are betting workers might consider cheaper housing a fair trade.
Goldman Sachs has planted 2,000 employees in downtown Salt Lake. While business is adding to the region’s gross metro product, Utah’s large Mormon population drives up the state’s population with its large families. Thanks to this potent combination of fertility and economic growth, Salt Lake City jumps to the No. 5 spot on Forbes’ annual list of America’s Fastest-Growing Cities, with Ogden right at its heels at No. 6.
Behind the Numbers
To compile our list of America’s Fastest-Growing Cities, we ranked America’s 100 most populous metropolitan statistical areas (cities and their surrounding suburbs, as defined by the U.S. Office of Management and Budget) based on six metrics weighted equally. Using data from Moody’s Analytics, we factored in estimated population growth for 2015 and 2016, year-over-year job growth for 2015, and 2015 gross metro product growth (in other words, the metro area’s economic growth rate). We also looked at federal unemployment data. Finally, we considered median annual pay for college-educated workers in each area, using data from Payscale.com. The result is a list of the 20 metro areas in America with the fastest-growing populations and economies.
California and Florida each place four metro areas on our 2016 list, while North Carolina and Texas scored two cities each. Austin regains the No. 1 spot after being toppled by Houston last year. Thanks to its booming technology, pharmaceutical and biotech industries, low cost of living, and cachet, the Austin economy remains on fire. Hordes of people are moving in (Austin’s projected 3.15% population growth rate in 2016 is the highest among the 100 metro areas we examined) to take advantage of Austin’s job opportunities (employment expanded 3.28% last year). The city has topped our list of Fastest-Growing Cities for five of the past six years (last year it slipped to second place).
But Utah’s fastest-growing cities are exhibiting impressive acceleration: Salt Lake City jumped seven spots on our list and Ogden returns to it after falling off in 2015. Though technically two separate metropolitan statistical areas, Salt Lake City and Ogden-Clearfield are part of one continuous region along the Wasatch Front–which stretches from Provo to Ogden and encompasses Salt Lake City–that is viewed by locals as a unified economy. About 80% of Utah’s population of 3 million live in this corridor.
The Wasatch Front is a diversified economy, with industry clusters around more lucrative jobs–in aerospace, financial services, software and IT, and life sciences—and which play to Utah’s strengths (among them, outdoor recreation: nearly 30 sports equipment and apparel companies have outposts here). Of Utah’s 4,300 tech companies (57,000 jobs in software or IT), the most prominent is the online education firm PluralSight, a unicorn with a reported $1 billion valuation. Silicon Slopes is growing: in 2014 $700 million in VC funding flowed to Utah, according to Mountain West Capital Network. Nonetheless, the more glamorous sectors are small, and the local economy is primarily a service one. “It’s health care, retail, and government,” says James Wood, an economist at the University of Utah. “Those are the big ones.”