Letter to the editor, Herald Journal, Saturday, June 28, 2008

Dear Editor

The citizens of Cache Valley have a critical choice of which elements of our history we wish to build upon. On the one hand, we have a proud entrepreneurial tradition. We enjoy the artifacts of leadership in our economic, religious, cultural, and academic institutions. Logan's downtown was once a financial center. Cache Valley is a breeding ground for innovative, energetic youth. Typically, they need to leave the area to continue to innovate. Meanwhile, we are subject to the ravages of a low income economic model (a less impressive, more recent development).

Utah State's pride is reeling from the loss of Riley Nelson. No one represents our history of achievement better than that young man. Utah State needs to rise to the occasion. As to athletics, a plan needs to be forged based on the realities of Division I football. A program without 50,000+ fans in the stands will not be competitive. Try as Logan might, 10,000 people constitute the core fan base. This number is sufficient for basketball, but woefully lacking for football. Part of the problem can be attributed to losing seasons, but not all. There are many losing programs in the big football conferences with high attendance levels.

What would cause more people to come? We need to find out. I am not sure that we have tried. We should be particularly concerned about the opinions of people in our region who routinely organize successful events. How could we get them to host their activities within the stadium during games? North of Salt Lake to Eastern Idaho and Western Wyoming, there are over 2 million people without access to Division I football other than the Aggies. Can't we get them to host their parties within our own? Think about it. If you were going to have a family reunion or a town party or a business event at the stadium, what would you want? Comfort would be a plus. Hard seats in scorching heat or freezing rain or snow are not very inviting. Perhaps hospitality suites would be of interest. If such facilities could be available year-round, some shared financing could be possible.

Think of the marketing possibilities -- not only for Loganites, but for business people in surrounding communities with commercial or social objectives of their own. Closed circuit tv could be a bonanza. Other forms of entertainment could be brought together (has anyone seen the swarms of cloggers in shiny outfits that overwhelm Lagoon each year?). By accommodating the preferences and interests of social leaders in our region, we can enjoy the fruits of innovation together. Thoughtful, informed innovation of this kind is our heritage. We need to have more of it.

Agendas

Critical to the policy process is an understanding of decision makers, their preferences and objectives, and how solutions are negotiated among these individuals and groups. It is important to distinguish between individual decision makers and organizations as decision makers. Indeed, all organizations, regardless of their missions, are run by individuals who have authority granted to them in some form. This is to say that they become primary agents of their organizations, with the ability to commit the resources and efforts of those organizations in ways that suit them. This condition is known as the agency problem, in that some such agents follow their own personal priorities, not necessarily the stated objectives of their organizations.

In Northern Utah, we are not immune to effects of the agency problem. There are plenty of examples of personal agendas of leaders that outweigh those of our institutions. This has an effect on the de-facto agenda that holds sway in our region. The net result is that we tend to have small plans, small agendas. Such plans tend to be reactive rather than proactive, as agents with overriding personal agendas tend to be less dynamic, progressive leaders than those who fully commit to the missions of their organizations.

Apart from organizations are networks, who are combinations of like-minded individuals or organizations that interact in some meaningful way to them. Networks can come to the rescue with respect to the agency problem. This is particularly the case with the kinds of tools and facilities that are available to support cohesive, committed activities of network members. Cohesive network members can lay out agendas and carry out supporting activities in ways that encourage agents to be more open and responsive with regard to the public interest than would otherwise be the case. Network participants can evaluate the performance of public agents and call attention to conceptual and behavior-oriented gaps. Network members can provide insights to the public and to agents of the public interest using technologies coupled with proven strategies.

Here are five areas in Northern Utah, centered on Cache Valley, where agendas need to be focused:

1. The economy. We need a thriving growth sector based on high contribution products and services with meaningful ties to global capital markets. We need to educate policy makers and the public as to what the aforementioned means and what opportunities and challenges would result from a stronger economy. I was informed by one downtown Logan businessman that Logan's income patterns match those of Appalachia, a factor that encourages more and larger federal grants by the city. He indicated that he expected to see food drops over town from military planes any day as a part of some low income block grant. This disconnect between the product of higher education in the region and the economy needs to be addressed.
   
2. Higher density housing. Considering Logan's demographic problem and the festering challenge of rural/urban sprawl, we need to develop a compelling higher density housing solution in Logan. Possibly this would entail conversion of some pioneer blocks to well-designed family living communities with common services and facilities. We need to stop filling the benches and our farmland with ranch houses and grass.
   
3. We need leadership by Logan with regard to traffic. We need an overpass south of town to classify and direct traffic in a safe, efficient manner. The key to our traffic woes begins in College Ward, where the main sign should start, showing drivers of all kinds where to go in and around Logan. There needs to be a legitimate belt route as soon as possible. It is silly to stop out of town traffic along 10th West for school crossings.
   
4. We need to lure people to downtown Logan with shops, museums, zoos, fountains (including crystal fountains that freeze in the winter like our crystal trees), walkways, gardens, canals, and musical and entertainment venues (in addition to the world class ones that we already have) using the land freed up from through-town traffic. Speeding cement trucks are not an attraction.
5. We need a train to Salt Lake City, preferably from the university and downtown to the south through Ogden Valley. We need this not only for our purposes, but unite us with the resorts. This would provide opportunities for downtown businesses and for entertainment. In this sense, we were better off about a hundred years ago with the Bamberger line.
   

Is this a different agenda from that of prevalent city and regional leaders? Yes, of course. Please comment on them as you like.

Differences are as follows: There is little or no acknowledgment by leaders of the low income problem in Logan. The lack of deal flow from the universities is not noted, nor is it addressed by any party. Low income is the underlying issue with regard to blighted neighborhoods much more than where cars are parked.

There is no expressed interest in learning of the benefits and requirements of a new technology development sector and the benefits of matching up with capital markets in support of new enterprises. This is a statewide problem, though there is some "pomp and squeak" on the subject.

Little effort is evident with regard to resolving Logan's demographic implosion. Young families move to the county after their schooling. Environmental problems result from urban sprawl throughout the region, but they are not addressed in ways that would create alternative models.

Traffic in Logan, coupled with the downtown problem, demonstrates the lack of action in either case. As to the idea of a train -- which worked well for many years prior to the Great Depression and the wholesale commitment of the country to motor vehicles -- there has been no open discussion of the issue. Efforts have been directed at upgrading the local airport, for example, which may be a good thing, but wouldn't do much to address the fundamental problem of getting us in and out of the valley in safe, efficient ways en route to our most common destination, Salt Lake City. Nor would it have the parallel benefit of tying us to the resorts to the south for mutual development of tourist and entertainment markets.

In the past several years, I have provided materials, including at least one op-ed article and many letters to the Herald Journal on these and similar subjects. With time, I will post some of them on this blog. The process started out with a bang, as the editor welcomed thoughtful input and encouraged submissions. The invitations were downgraded from op-ed pieces to letters to the editor. A recent letter, similar to this blog entry, was ignored altogether by the paper. I have a sense that the point of ignoring the letter is that it detracts from the agendas that have been laid out by prevailing leaders.

Well, of course, this is the point. The objective here is to establish an alternate policy framework, one that I feel is more responsive to the needs of the populace in the coming decades. Living off the perquisites of low income coupled with urban sprawl and soft leadership in transportation is not much of a plan.

Who has to leave and who gets to stay

When I was on contract with USU in 2000 to assist with the commercialization process, I came face to face with a phenomenon that I really hadn't understood when I was younger, when it applied to me. I realized that though USU prepares our youth for professional careers in a variety of fields -- particularly in business -- they basically need to leave once they develop themselves because of the nature of the local economy. There are exceptions to this in the case of family businesses, medical professionals, and a couple of other options, but opportunities are largely restricted to low-paying jobs where you don't really get to apply what you have learned even if you get the job. You know, the "new-fangled idea" problem.

Of course, this is in large part the story of what higher education provides. People from rural backgrounds get educations and go to the city. In my parents' generation, for example, all of my uncles on my mother's side grew up in Brigham City, went to war, got college degrees mostly from USU, and ended up far from here. They have had successful careers in a wide variety of fields. None, however, lived out their lives in Northern Utah, though they loved it here.

The issue I faced in discussing commercialization prospects from technology developed at USU was that there was great concern in the local business community that the development of new businesses here would hurt the economy -- at least the economy that they knew. A rising income level is apparently viewed by such individuals as a threat. Hiring overqualified employees because of a desire to stay is a compelling prospect that is habit forming. As a result, we found that there was little support for the idea of capital formation and new venture development, themes that I will return to on occasion.

In the general public discourse, it is challenging to know how to present the case for something like capital formation. In the case of Cache Valley, the weight of recent history is overwhelming. People think that things are the way that they are out of necessity. It has been a long time since major entrepreneurial efforts that increased local income levels were the mainstay of the economy, but Northern Utah has a stellar entrepreneurial tradition in that of the Eccles family and earlier than that the Thatcher family. Of course, both families as entrepreneurs and bankers had many partners and collaborators. In Ogden, the Brownings were successful on their own and with the Eccles.

The best entrepreneurial tradition is represented by the careers of David and Marriner Eccles, father and son. The scope of their work is largely unheralded. David's pioneer success story should be heralded in song and story, but few know of the details the the story that started in Scotland, that led them through to Eden, to Oregon, and to Ogden and Logan. His unexpected death necessitated strong actions by Marriner, who as a recently returned LDS missionary to Scotland took his training from Brigham Young College and became one of the most critical industrialists and policy makers in the 20th century. He built Hoover Dam. He was the Chairman of the Federal Reserve Bank. He originated and promoted the wide scale works projects that lifted the United States from the Great Depression. With his brother George and with Joe Quinney, he invented a whole new way of organizing banking, a widely copied innovation in that field. Finally -- and importantly -- he managed family accounts such that we are left with an array of family foundations and endowments that are legally committed to the support of research, the arts, and social needs.

This is an important point to understand. By innovating and establishing state-of-the-art organizations and financial institutions, Marriner Eccles in particularly established a process that enriches us in Northern Utah year-by-year. The point is that the Eccles family foundations are legally bound to make the kinds of contributions that they make. Isn't that a gift that keeps on giving?

Now, there are several very successful entrepreneurs in the region. A number of their companies persist here. There have even been some companies that have spun off from USU. Several companies exist in environmental measurement technologies, Hyclone, now a part of Thermo Fischer Scientific, continues to grow in the region, and the Thiokol snowcat endeavor was a definite success story in its time. Icon is successful on a large scale, the result of an effective branding strategy. I had a particular role in the Thiokol story in the DeLorean era that I will recall at some point.

Why, then, is income low -- at least all but a thin veneer of medical professionals, local businesspeople, the Thiokol engineers and university professors? The answer can be found in economics. What is it that we produces the other people buy? More particularly, what is it that we produce that others spend a lot of money to buy where there are high margins that can translate into high salaries. The answer is not many things. Even the highly successful integrated circuit industry locally -- started by Ezra Lundahl and his farm equipment enterprise that was located on the current site of Joann's on 2nd South and Main in Logan -- brings business, but without high margins.

To get high margins and high prices, we need to look to new technologies. Hence, the importance of university spinoff ventures. And who is going to create such ventures? Well, who has the energy for such endeavors and the inclination to assume associated risks? Well, our high-achieving young professionals, armed with educations and a veneer of experience. How do they accomplish such tasks? Well, not very well to this point, a problem faced throughout the state. I will address the venture capital/capital formation issue later. For now, the issues is straightforward. Do we want to support such developments?

Vision of the future

I am a Logan native, but have lived and worked on the east and west coasts in business. My training includes studies at USU in the arts, business at BYU, public policy at the University of California, San Diego, and a Ph.D. in education from USU with emphasis on organizational cognition and social networks. I currently work on a federally-sponsored project at USU.

I have a fire hose of information to lay out here, based on work dating to the 1980s -- from 2000 on specifically with regard to Northern Utah. There is an underlying theme. We need to prepare for the future. We need to do this in a way that will meet the needs of those who will be living in it. We need to do this by leveraging our strengths, the strengths of our youth, and the wonderful environment around us. As my grandfather loved shepherding his flocks in the southern hills of Cache Valley and Hardware Ranch, I love this region -- just as it is. It is not going to stay just as it is in any scenario, however, and we need to take action to encourage changes that will be beneficial to our lifestyles, in harmony with the environment, and in tune with changes in the world around us.

Perhaps Cache Valley, for example, is really Tolkien's Shire, as has been suggested. If so, we little hobbits have a lot of work ahead of us.