Economy, Fiscal Stability Push Utah to Top Spot in Best States Rankings

By Elliott Davis Jr.  |  May 2, 2023

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It’s safe to say that Utah has surprised Vanessa Charcas.

An associate account director for a marketing agency, Charcas moved from Chicago to Salt Lake City in 2020. Having grown up in Florida, she never imagined she’d like hitting the slopes. But now she considers herself part of the local skiing community, and in general has enjoyed trying new things in the Beehive State.

Utah, she says, “opens up another side of you that you don't really realize” is there.

“Unless you know someone that lives here or you have visited, you don't know how much of a gem it is,” adds Charcas, 30. “If you do visit, I'm pretty sure immediately you realize how beautiful it is and what it has to offer.”

The strengths of what Utah offers its residents, particularly in areas like the economy and education, are why it was ranked the No. 1 state in America in U.S. News & World Report’s Best States rankings for 2023, released Tuesday. Now in its fifth edition, the project captures how all 50 states serve their residents by analyzing more than 70 metrics across eight categories, including economy, fiscal stability, health care, and crime and corrections.

“I think Utah has one of the strongest economies in the country, and has for some time,” says Phil Dean, the chief economist and public finance senior research fellow at the University of Utah’s Kem C. Gardner Policy Institute.

Dean, who served in the administration of former Republican Gov. Gary Herbert, says the state has a “stable tax and regulatory structure,” which is “what business leaders want.” Utah is also diversified in terms of industry, with strong energy and tourism sectors and a growing finance sector in Salt Lake City, adds Ben Blau, head of the Department of Economics and Finance at Utah State University’s Jon M. Huntsman School of Business.

Utah’s highly educated population plays a role in the state’s economic prowess, both Blau and Dean note. The state ranks No. 5 in the Best States project’s education category, particularly excelling in metrics assessing college graduates’ debt at graduation and math and reading scores among eighth-grade students. Utah also is tied with Hawaii at 13th out of all states for having the highest share of the population 25 and older who’ve earned an associate degree or higher.

“I think this human capital aspect from the education system is carrying over into the economy,” Blau says.

Blau and Dean also say Utah provides a good atmosphere for entrepreneurs and startup companies, which has been a big part of its economic story. The state ranks No. 3 in the Best States business creation rate metric – an assessment of business growth in the private sector – and companies tend to find success after being born, too. According to research from Stanford University professor Ilya Strebulaev, 1 out of every 61 Utah startups backed by venture capital reaches unicorn status – a term for a privately held startup valued at over $1 billion. Utah’s rate is almost 70% above the national average.

Ryan Boswell, senior director of growth at Silicon Slopes – a nonprofit that works to empower connections within the state’s business, startup and technology communities, and which hosts an annual summit with renowned speakers from the business world – says there’s a reason for Utah’s unicorn-friendly corporate climate. It’s one that led him from providing free social media support leading up to Silicon Slopes’ 2022 conference to joining the team full time.

“It's an ecosystem and community that is different from anything else that I've ever seen,” says Boswell, who notes he’s done work on the East Coast, Midwest and West Coast. “There's not a whole lot of competition, per se. Yes, businesses obviously compete and have competitors. But Utah is all about building up one another and connecting people together to create opportunity.”

But what is it about Utah that makes it attractive to workers within the technology sector? Recent research from the University of Utah indicates it has a lot to do with the state’s natural beauty.