D. Scott Peterson.

In the mid-1980s Utah's economy was flat. There were a few large companies, but little outgrowth. This was the observation of researchers with Ernst & Young, one of the world's largest accounting firms. Things changed.

"Utah literally took off in the early '90s with opportunity," says D. Scott Peterson, Ernst & Young managing partner in Salt Lake City. "It was clear that Utah was creating a mini Silicon Valley."

The firm had a strong position working with 40 percent of the Silicon Valley 150, the leading high-tech firms in the nation. Indicators favored a stronger presence in Utah. "It was smart business for Ernst & Young to bet on Utah's technology future," says Peterson. "In 1995, we had 37 employees. Now we're the largest accounting firm in Utah with 140 employees and plans to triple in the near future."

Good research is a key factor in Ernst & Young decisions. The company looked closely at the 2000 Olympics in Sydney, observing business deals struck in a place 15,000 miles "down under." "The Olympics seems to be a lightning rod for new opportunity. Our analysis is that some of that is going to happen in Utah. Other companies will see that Utah is not an insular state and is a great place to do business," says Peterson.

A number of factors impress him, "Government policies have clearly elevated the Utah economy, primarily in technology, life and medical sciences, IT, and software. Tremendous baseline companies like Novell, WordPerfect and Iomega all spun off second-generation companies, which are now spinning off third-generation companies.

"We have a highly educated, ethical work force, the transportation infrastructure and the airlines hubs are a huge plus; and this is one of the few cities in the country that is a hub for five major fiber optics lines. That makes Utah one of the most wired states in respect to the Internet on a per-capita basis. Unless the national economy craters, there will be continued growth in our economy," he concludes.

Ernst & Young plans to establish Utah as one of only two shared-services tax-compliance offices in the country where it can electronically perform tax returns for a broad-base clientele. "Utah will serve the entire western U.S. and some foreign countries for expatriot tax work," says Peterson. "Utah has some of the best accounting schools in the country; there is less of an issue with employee turnover; higher retention rates; and an IRS service center in Ogden. By the year 2002 we'll have close to 450 people here."

WORDS OF WISDOM

Although Utah isn't quite ready to compete with Silicon Valley, state officials point out that it has made some notable progress in diversifying its economy by pursuing high-tech ventures.