In New West, Disk Drives Replace the Cattle Drives
DENVER — Roger Christensen came to the Rocky Mountains via the Dakotas, by working his way up through the ranks of the Bell telephone system. Until five years ago, he had never left American shores nor given much thought to doing business abroad.
Now Mr. Christensen spends his time jetting to Jakarta and other foreign capitals, developing the international business operations for US West's Media Group. He has learned the art of dealmaking in cultures as diverse as Britain and Japan. "Now we expect our employees to be global," says the Iowa-born Christensen.
More than any other part of the United States, the American West is wedded to the global marketplace. The union, produced by the region's shift to high-technology industries, is being heralded this week in Denver, host of the annual summit of the Group of Seven advanced industrial nations and Russia.
"Colorado is an appropriate venue for a summit like this because Colorado and the Rocky Mountain West symbolize the economic transformation that is sweeping the world," says Philip Burgess of the Center for the New West here.
Movers and shakers in this Rocky Mountain metropolis, once a railhead for cattlemen and miners, are now computer software engineers and telecommunications moguls with their eyes on global horizons. A similar transformation is sweeping the West, where a higher proportion of jobs are export-dependent than in the eastern US. Moreover, the proportion of export-related jobs is rising at a faster rate than elsewhere in the country.
"With millions of Americans benefiting in their jobs directly or indirectly from trade, our economic success is a function of a healthy global economy," Treasury Secretary Robert Rubin said June 16, in a prelude to a theme that will resound at the G-7 summit.
Golden State's Midas touch
The most vivid example of an export-dependent economy is California, where economic vitality is more intertwined with international operations than is any other state. California, with 12 percent of the US population, accounts for a quarter of the nation's merchandise trade. One of every 7 jobs in California is linked to foreign trade and investment, says Philip Romero, chief economist for Gov. Pete Wilson (R).
Traditional industries of the West - timber, energy, and agricultural products - remain important in the trade picture. But knowledge-based industries such computers, software, entertainment, and telecommunications services are supplanting them.
Oregon is a case in point. Because Oregon is perched on the Pacific coast, "the global market has always been relatively important," says Paul Warner, chief economist of the state's Office of Economic Analysis. But until the late 1980s, trade was dominated by exports of lumber, wheat, cattle, and other farm products.
In the past seven years, trade has spiked upward, led by the mushrooming electronics industry, especially semiconductor producers, says Dr. Warner.
Oregon's exports nearly doubled in that period, from $5 billion in 1989 to $9.8 billion last year, nearly twice the rate of overall economic growth. Electronics exports in the state grew exponentially, from $336 million to $2.1 billion.
Beyond the Pacific
For Oregon, as for the rest of the West, the key export market lies on the other side of the Pacific, in East Asia. Japan, Singapore, and China top the list of trade partners of most states in the region.
"If you look at our trade patterns, the high growth rates in Asia are going to impact the Western US more than anyplace in the world," R. Thayne Robson, a University of Utah economist, said last year at an economic roundtable of the Western states.
For companies and states, overseas markets provide opportunities that may no longer exist at home. California's Dr. Romero says foreign markets helped to cushion the bump of the last recession, from which the state has only recently emerged. "Our recession would have been substantially deeper but for foreign trade," he says.
An evolution in thinking
For telecommunications giant US West, the decision to go abroad came slowly. The Denver-based firm is one of the Baby Bells, formed after the breakup of AT&T, and provides local phone service to 14 Western states. "Back 11 or 12 years ago, there was some debate: Are we going to be a global company or a domestic telephone company?" recounts Christensen. Aside from "some evangelists," the decision then was that global business would not be a significant part of the company's portfolio, he says.
Even five or six years ago, as the firm began to branch out into new technologies (cable television, wireless communications, and delivering television, data, Internet access, and telephone calls all over the same line), "it wasn't clear to us how significant international [business] was going to be," Christensen says.
Fierce competition at home gave the final push. The company concluded that overseas markets offered the best opportunity for growth in these new technologies.
Now US West Media Group is doing business around the world, earning more than $1 billion in revenues internationally last year. Its cable television operations reach 19 million homes in Great Britain, Japan, Argentina, Singapore, and a number of other countries. Its wireless telephone service has access to 200 million potential customers in Eastern Europe, East Asia, and South Asia. In countries such as Hungary, Poland, and the Czech Republic, where people ordinarily wait years for phone connections, the firm is having a field day.
"We have lines around the block when we sell service there," says the Media Group's Cathy Fowler.
Denver has emerged as a hub for many companies doing international business. But the local infrastructure is still trying to cope with this change.
"The only problem I have is I can't get any international flights out of Denver going anywhere I need to go," says Christensen.