Idaho’s Love Affair with Technology
Back in the 1970’s when Hewlett Packard’s newly appointed division manager, Ray Smelek, was given the task of choosing a location for HP’s new printer division, he was basically told to find a great location within a 2 hour flight of the Bay Area. Little did he know the decision to start HP’s division in Boise would have such a strong impact on our culture and change industry in our state forever.
According to his memoir, “Making My Own Luck,” Smelek talks about the initial trip to Boise with his site selection team, “We spent two to three days in Boise, meeting with the governor, mayor and various business people. I made a presentation about HP, what we wanted to do and what we were looking for. Governor Cecil Andrus immediately said, “Sounds good to me. Let’s do it.” It was a very positive visit and everyone was very supportive.”
Had the governor and city officials not had the foresight to be supportive of the technology industry our tech landscape might look very different—not just for HP, but also for Micron, who planted roots in the Treasure Valley So how does this benefit technology based companies in Idaho today?
During beginning stages of idea building and company start-ups, entrepreneurs may not give a lot of thought to what the government situation is around them. Community support, taxes, state budgets (and deficits), workforce, and overall business “friendliness” all affect a business’s bottom line and chances for success. Choosing a location is an incredibly important decision, because once rooted into a community, the daunting process of re-locating becomes expensive, politically charged, and frustrating to employees and their families.
For the technology sector, Idaho has matured into a supportive partner in success for many companies, and for good reason. Electronic equipment makes up the majority of Idaho’s exports, a significant source of revenue and quality jobs for the state.
Other interesting quick facts about the tech industry in Idaho come from the Idaho Department of Labor:
- Over 48,000 workers in Idaho are employed in technology
- Between 2000 and 2010, the number of high-tech companies in Idaho grew by 61 percent
- Technology accounts for 17 percent of all wages earned statewide ($3.4 billion)
- More than 4,700 of Idaho’s 65,000 establishments are technology businesses
Innovation is something Idaho is known for, as the state consistently ranks in the top 1 to 2 spots for number of patents per capita [Kauffman Foundation]. In fact, Idaho’s extremely high patent ratio is more than 3.5 times the national average. New product activity and patents are inextricably linked, so for Idaho to receive this honor year after year is a tribute to its entrepreneurial spirit.
How does Idaho support businesses in the technology field? As in every industry, businesses are eligible for a number of incentives that range from business tax credits to infrastructure grants. Companies can earn tax credits on everything from hiring new workers, conducting research, expanding their broadband infrastructure and investing in new facilities. Often, these credits can be carried forward up to 14 years.
The state also offers customized recruiting services as well as workforce training. Eligible companies can receive financial reimbursement up to $3,000 per new employee. In 2011, Idaho created a hiring incentive named “Hire One.” The incentive promotes job growth by giving qualified employers a refundable income tax credit for the total gross wages paid to each new employee during the first 12 months of employment. The amount of credit is based on the business’ unemployment insurance rating and the unemployment rate of the county where the job is created.
All Idaho state incentives are “statutory” which is a fancy way of saying both existing and new businesses are eligible to receive all incentives if they qualify. Consult your accountant or the Idaho Tax Commission to determine eligibility.
The Procurement Technical Assistance Center (PTAC) supports Idaho businesses looking to contract with the government or work with agencies using bid/proposal procurement methods. Membership is free to Idaho companies, who upon registration, can receive customized bid matches from over 2000 procurement sites as well as consulting and training on different aspects of government contracting.
The newest program to hit the state’s tech scene is IGEM, or the Idaho Global Entrepreneurial Mission. The goal of this initiative is “to create new enterprises and high-paying knowledge-based economy jobs…through targeted partnerships between higher education, government and industry.” Through these partnerships, Idaho will generate technologies that compete globally, while fueling the growth of higher paying jobs, stimulating start-ups and providing a much needed bridge between public technology and the private sector gap.
To make this happen, IGEM leverages four strategies: Investing in strategic research, attracting innovators, increasing research funding, and investing in the entrepreneurial ecosystem. With the program administered through the Idaho Department of Commerce, eyes around the region will watch in awe as the program becomes a reality.
Like any relationship, Idaho’s love affair with technology is still in need of nurturing and constant attention. By its very nature, tech is an industry of adaptation and transformation. In order to keep up with the needs of business, the state requires input from the private sector to understand how to best support new growth
The recent approval of IGEM is an example of what can happen through public-private sector collaboration. This collaboration is essential for state leaders to be able to provide tech companies with the environment needed to be successful. Idaho stands to remain an industry leader for technology and from the growth our companies have shown, we are just getting warmed up.
About Jessie Speck
Jessie is a native of Boise, and currently works as a Business Development and Attraction Specialist at the Idaho Department of Commerce. Jessie came to the Department of Commerce from a background in the private sector where she owned a business for ten years. In her spare time this hockey-playing, golf swinging, yoga fanatic also consults a few local businesses with their social media marketing, volunteers with Boise Young Professionals and raises her three daughters (not in that order). Follow her on Twitter @IdahoJessie.