Silicon Slopes Is A Growing Political Force. But Not Compared To Other Tech Hubs
Speaking before the Silicon Slopes Tech Summit in 2018, Gov. Gary Herbert hailed the Utah tech industry’s contribution to the state.
“Certainly the technology industry itself is growing dramatically — It's breathtaking,” he said. “And by the way, you're helping to fuel a significant economic growth and expansion.”
There’s little doubt about that explosive success: the Utah tech industry’s job growth from 2007 to 2017 was more than double that of the tech industry nationwide, according to an analysis by the University of Utah’s Kem C Gardner Policy Institute. And in 2017, the industry was responsible for nearly 17% of the state’s Gross Domestic Product.
While Herbert commended the tech sector for becoming an economic juggernaut in the state, the industry wasn’t a huge political force for him when it came to campaign donations. In 2016, when Herbert was running for re-election, tech accounted for about 4% of his major campaign donations, according to an analysis by KUER.
And, Utah tech wasn’t a big player in campaign donations that year outside Herbert’s campaign, either. The industry’s contributions to Herbert’s 2016 campaign accounted for almost all the major tech donations that year.
But, with 2020’s gubernatorial election on the horizon, that appears to be changing.
“Over the years as they've grown, their influence is also growing,” Dave Buhler, a political science professor at the University of Utah, said of Utah’s tech sector. “That can take a number of forms, one can be hiring lobbyists ... It also could include making campaign contributions or supporting different candidates.”
In this year’s gubernatorial race, about 8% of Lt. Gov. Spencer Cox’s major donations and 3% of former Gov. Jon Huntsman’s campaign contributions have come from tech, according to the latest disclosures.
That pales in comparison to the industry’s campaign contributions to tech investor Jeff Burningham, however. Almost one quarter of his major donations have come from tech.
John Pestana, CEO of Provo-based software company ObservePoint, is one of the biggest tech donors in this year’s governor race. He and his wife Heidi Pestana have donated $200,000 to Burningham’s campaign, according to the latest disclosures.
“Well, first of all, Jeff is a friend of mine,” John Pestana said. “I've done some business with Jeff. And Jeff is very freedom-minded … [He] wants less government involvement in most things.”
Pestana also gave $5,000 last year to Provo City Council candidate Janae Moss, yet local elections in Utah don’t usually see such a sizable donation from the tech industry. In municipal elections, contributions from real estate still reign supreme. In 2019, for every $1 spent by the tech organizations, the real estate sector spent nearly $44 on local elections in 12 municipalities where tech companies are based.
Different Regions, Different Relationships
Tech’s campaign spending here looks starkly different from other tech hubs such as the Bay Area or Seattle.
Seattle-based Amazon poured $1.5 million into its local city council races in 2019. The Seattle City Council runs from liberal to very liberal, and in 2018, it passeda sizeable tax on big businesses saidSeattle Times Politics Reporter Jim Brunner.
“That kind of emboldened Amazon and some other business interests to say that there is a discontent with the ideological direction of the city council,” Brunner said.
In Utah, more conservative local and state governments avoid levying big taxes and creating regulations.
The size of a tech hub’s companies can also determine how politically involved its companies are.
In the development of Utah’s tech industry, 2014 was a seminal year. That’s when companies started raising large amounts of capital, said Clint Betts, executive director of Silicon Slopes, a Utah-based nonprofit that promotes the tech sector. With an influx of cash, the industry didn’t have to focus all its time and resources on growing companies, and could direct some of that towards political involvement.
“Then we can pop our head up and look around the state and say, ‘How can we help?’,” Betts said. “‘And where could our voice be useful?’”
But, instead of pushing back on new taxes and regulations, as in Seattle, tech leaders in Utah have been partnering with the state to grow the industry and help mitigate some of the downsides of its growth. Examples include expanding computer science education to grow the workforce and looking for solutions to rising housing costs.
There’s a collaborative spirit between government and business leaders in Utah, according to Betts, but that’s not the only difference when compared to tech companies in California and Washington.
“We also build different companies,” Betts said. “The types of companies historically we built are software as a service type companies.”
Which, he said, are not as ripe for regulation as companies elsewhere.
“They're much more established in terms of how they're regulated,” Betts said.
Although Utah tech companies and organizations seem to be putting more and more money into political campaign, for now, Betts said that’s not a part of his plan.
“I just think that, you know, us getting loud about the issues will be more effective,” Betts said. “I don't know if that's the right move. This is very new for us.”