News Analysis
Good News and Bad News for Northern Rockies High-Tech
The improving fortunes of Micron and HP are good news for Boise. But Montana's small tech sector needs an energy boost.By Jonathan Weber , 12-23-09
Inside the Semitool plant in Kalispell, Montana. Photo by Lido Vizzutti, Flathead Beacon.
The technology business in the Northern Rockies has always been a bit of a hodge-podge: a big company here, a big subsidiary of a big company there, and a few small hives of entrepreneurship that have a lot of potential, but with the possible exception of Idaho’s Treasure Valley don’t yet have a major impact on the regional economy.
Boise is clearly the most important high-tech center in Northern Rockies, and it got a little bit of good news this week. Micron, the computer-chip manufacturer, finally turned a profit after three years in the red, and Hewlett-Packard’s huge Boise-based printing division seems to be doing better. There may not be a lot of job growth on the horizon, but at least job losses should stop for a while.
It’s hard to overstate the importance of Micron and HP for Boise. The basic ecological dynamic of high-tech communities is that talented engineers and marketers from large companies leave to start their own companies, and take advantage of the business infrastructure and services that grew up around the large companies. Without a couple of big guys around, entrepreneurs tend to go elsewhere to find the talent, the capital and the support services they need.
Micron is in Boise because the late potato magnate J.R. Simplot saw an opportunity early and had the money to make it happen. But it competes in one of the toughest industries in the world, and its long-term prospects are always a little cloudy. The company, once Idaho’s largest private employers, shut down a production facility and laid off more than 3,000 people over the past two years. While the collapse of the real estate bubble is the main cause of Boise’s severe economic woes - unemployment in greater Boise is over 10%, among the highest in the region, and a recent study of the Mountain West economy said Boise’s situation was akin to Phoenix and Las Vegas - those job losses certainly didn’t help. The good news is there is indeed a vibrant start-up community in Boise, and even some venture capital, and that has promise for the long run.
In Montana, the big high-tech news of the day is that Semitool, a large maker of semiconductor manufacturing equipment, was officially taken over by industry leader Applied Materials. Semitool is in Montana’s Flathead Valley because the founder wanted to live there and saw opportunity in low labor costs and government support. But it’s lonely in the Flathead for a company like Semitool - not much in the way of a high-tech community - and it seems unlikely that Applied Materials will keep operations there for very long. If you’re looking for cheap labor, you look to Asia. If you’re looking for expertise, you look to Silicon Valley (or maybe Boulder or even Boise).
Meanwhile, the emerging high-tech hub around Bozeman is still struggling to break into the big leagues. Bozeman has a lot going for it - an engineering school at MSU, a couple of decent-size companies in the form of RightNow Technologies and Zoot Enterprises, a productive business incubator in TechRanch, and a quality of life that is hard to beat. But TechRanch relied heavily on the largess of former Senator Conrad Burns, and its future is not assured. And even though venture capitalists love to vacation in Montana, there are still no sizable VC firms in the state - and few Silicon Valley-style deals that are suitable for VC dollars anyway.
Governor Brian Schweitzer has made much of the state’s potential as a center for alternative energy development, and there is definitely a lot of potential there. But with the sudden loss of momentum on federal cap-and-trade legislation to reduce carbon emissions - something the Governor told this reporter a few years ago he considered to be all but a foregone conclusion - the economic incentives for wind power, bio-fuels and so-called clean coal may not be there after all, or at least not as soon as many expected.
Energy technology probably has a lot more potential for Montana and Wyoming than other sectors of high-tech, since these states have the natural resources and are already in the energy business in a big way. That’s one of the reasons it’s surprising that Montanans, who derive much less benefit from fossil fuel production than their Wyoming neighbors, are not enthusiastic supporters of climate change legislation.
Meanwhile, just to the south in greater Denver, and to a lesser extent greater Salt Lake City, there’s a tremendous amount of activity in the Internet business as well as in traditional computer hardware and software. That relative proximity should benefit the Northern Rockies in the long run. Indeed, despite all the new tools for working remotely and the corresponding rise in virtual organizations, physical proximity and critical mass still matter a lot in knowledge-based industries.
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So what ever happened to the bolus thingy Micron was R&Ding;, which was a micro camera encased in a titanium pill shape, and the patient swallowed it, and it would take a zillion pictures as it made its way through the alimentary maze to the poop chute, after which it was recovered? I can't remember if it was to be downloaded (pun intended) or if it transmitted digital picture data all during the trip. But it sure sounded at the time like a less invasive way to look at the whole of your gut without the roto rooter camera cables and stuff, all going up the down staircase.