Tilling the soil for the next Nike or Intel
There are a few simple things that Oregon should pay attention to if it wants to increase the chances of another company having the type of Oregon success that Intel and Nike have had.
Mark Hester worked 20 years at The Oregonian in positions including business editor & editorial writer. He currently is a communications consultant.
With Oregon’s best known companies grappling with the aches and pains of maturity, it’s time for the state to focus on nurturing the next generation of corporate employers
The past year has brought scrutiny and challenges to Oregon’s two most visible corporate citizens: Intel and Nike.
Though based in Santa Clara, Calif., Intel has its largest manufacturing hub and biggest concentration of employees in Oregon. The company opened its first Oregon factory in 1976 and has expanded steadily since then, though it has sent mixed signals about future plans.
Nike, of course, is Oregon grown and based. It not only is a major employer but also a big part of our history and culture, growing from a startup created by a former University of Oregon runner and his coach in 1964 to one of the most recognizable brands in the world.
I’m not concerned about the future of either company. They each face shifting market forces, as do many businesses, and have been through internal leadership changes. But they also have a long history of overcoming challenges and continuing to thrive. What Oregon should be concerned about is when we will see another Intel or Nike.
There are Oregonians in both the public and private sectors working hard to attract jobs to Oregon. The state has been especially aggressive in the pursuit of “green” jobs. But here’s the problem with chasing the next big thing. It’s a crowded track. Everyone is chasing those jobs. Convincing more traditional companies to move or expand here is only slightly easier for the same reason — if the jobs are desirable, there’s a line of communities seeking them.
No one was chasing Nike when Phil Knight and Bill Bowerman founded the company’s predecessor, Blue Ribbon Sports, in 1964. Knight and Bowerman were chasing opportunity. So was Intel when it built its first plant in Oregon before personal computers, much less cellphones, were commonplace.
Blue Ribbon became Nike in 1971, but the real growth began in the 1980s, about the same time that demand for personal computers and Intel chips was beginning to accelerate. Today, Nike and Intel are mature companies. Explosive growth likely is behind them. Likewise, Oregon is unlikely to benefit again from two companies of such stature zooming on parallel growth tracks at roughly the same time.
But the state does need to make sure the tracks are clear for the next growth train, wherever it might come from. There have been questions about how hospitable Oregon is to business since I moved here in 1996. The truth is “business climate” is such a subjective term that the debate barely is worth having. But there are a few simple things that Oregon should pay attention to if it wants to increase the chances of another company having the type of Oregon success that Intel and Nike have had.
1. Entrepreneurs and highly skilled workers need to want to live here. This has been a strength of Oregon for years. But almost every city will have to re-prove its worth in the post-COVID world and because of the global negative attention that Portland received over the past 15 months, Oregon, particularly Portland, will have more to prove than many locales. And it’s not enough for workers to want to live here, they have to be able to afford to live here. (More on that below.)
2. The education system must prepare workers. Good schools are essential at every level of educational attainment and every stage of the economic ladder. Quality education from pre-K through high school prepares both students who are college bound and those headed directly into the workforce. Community colleges are essential both for skills training (and retraining) and as a low-cost bridge between high school and four-year colleges. Strong universities help retain top students in state and attract talent from out of state. Excellent graduate schools collaborate with employers on both training and research.
3. The barriers to success need to be as low as possible. Different people point to different things businesses need to succeed, often filtering their views through an ideological lens. Truth is it would take a complex algorithm to even attempt to measure what businesses need, and it varies from industry to industry. But there is a simple cliché that policy-makers should keep in mind, “Time is money.” The more time and effort it takes to get what they need, the less likely a business is to succeed. Oregon has many of the things businesses need — qualified employees, natural resources, access to growing markets in Asia — but do we make it more difficult than it needs to be to access those assets?
4. Costs need to be competitive. Oregon remains a cheaper place to live and operate a business than Pacific Coast neighbors California and Washington. But we no longer have a cost advantage over many other parts of the country. At times, too much attention is focused on taxes. Though businesses certainly care about taxes, what really matters is total cost and what you get for you money. As other operating costs rise in Oregon, taxes become more of a factor. But the primary concern always should be on total costs — both for employers and employees — and the advantages Oregon offers that make the cost worth the price. If inflation increases, as many economists expect, being cost competitive will become even more important.
None of these challenges are unique to Oregon. In most of the four areas above, we rank in the middle of the pack nationally. But the payoff from improvement could be big — as big as the next Intel or Nike.
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