The New West: Mild and wild, it’s the region for the next century

Various descriptions are used to characterize the major changes sweeping the United States and the world: revolution, a new civilization, the third Wave, the new Information Age.

Whatever the label, these forces are responsible for five fundamental shifts that are creating a “New West” in America. They are: migration, urbanization, diversification, globalization and gentrification.

Migration. Since World War II, the West and the South have been America’s fastest growing regions. During the 1990s, nine of the 10 fastest-growing states are in the West – led by Nevada, Idaho, Arizona, Colorado and Utah.

Westerners are younger, more ethnically diverse, and better educated than the rest of the country. Examples: Washington state has the nation’s highest percentage of high school graduates; Colorado the highest percentage of college graduates; New Mexico leads the country in Ph.D’s per capita.

Today, the West is also the destination of choice for the footloose – including Americans who are moving in droves to what Rand McNally calls America’s “mild and wild” places as well as immigrants from other countries, especially from Mexico and Asia.

The problems (and benefits) of immigration, legal and illegal, are concentrated in the West: Texas and California receive 54% of illegal immigrants. The West as a whole is home to 44% of legal immigrants.

Legal immigrants are a major asset. They pay more in taxes than they receive in government benefits. Their children go to college at higher rates than do the native born. Most important, they provide energy, connections and know-how to the West’s entrepreneurial and increasingly internationalized economy – and they reinforce American idealism: They know why they are here.

Illegal immigrants, by contrast, impose a growing burden on state and local governments. Illegals have become a major source of national, as well as regional, political controversy, as shown by Proposition 187 last year in California.

Urbanization. Zane Grey, Shane and Lonesome Dove, the solitary cowboy riding fence on the open range – these images come to mind when you think about the West. Even today, the Big Sky, large ranches, trekking or mountain biking in what Joel Garreau called the “empty quarter” are common scenes of the West. Despite these gripping rural images, however, the West is America’s most urbanized region. More than 4 of 5 Westerns live in urbanized areas – unlike the rest of the U.S., where nearly 1 of 3 lives in a rural setting.

Most of the West resembles an archipelago separated from each other. Relations among these “city-states” and between these cities and their rural hinter-lands increasingly define important fault lines in the politics of the West.

Diversification. For most of its economic history, the West has been a natural resource colony of the West. Western oil, gas and coal fueled humming factories to the East. Western beef and grain fed their workers. Western timber provided housing for their people.

The West is still the nation’s natural resource treasure house and extractive industries still play an important role in the culture and economies of the West. But a far smaller one than in years past – and one clearly subordinate to the new knowledge-based industries on which America and the region’s economic future depend.

The nation’s economic center of gravity is shifting west. Example: Since 1983, trade across the Pacific has exceeded trade across the Atlantic – and is now more than double the Atlantic trade.

Another example is the growth of the West’s manufacturing base. For decades California and Washington have been the world leaders in aerospace, America’s principal manufacturing export. But few have noticed that Los Angeles is now the center of the nation’s apparel industry, that America’s most productive steel mill is in Utah, that California is America’s largest industrial (and agricultural) state or that South Dakota recently led the nation in manufacturing job growth.

Of the Inc. 500 “fastest growing” businesses in America for 1994, six of the top 10 and half of the top 20 are in the West. All 10 of Forbes magazine’s top 10 cities in 1995 for starting New Economy business are located in the West. Hollywood is the entertainment capital of the world. Entertainment has replaced space exploration and defense as the driving force for development and application of new telecomputing technologies.

Metropolitan Denver is the world’s capital of the cable television industry. Colorado is headquarters for world leader Tele-Communications Inc. (TCI), Jones Intercable and CableLabs, the industry’s R&D unit.

The West is home to some of the nation’s most innovative telecommunications companies – including U S West (headquartered in Denver), SBC (formerly Southwestern Bell, headquartered in San Francisco) and GTE Telephone Operations (headquartered in Dallas).

Many of the nation’s most important New Economy companies are located in the West: 11 of 14 semiconductor manufacturers listed by the Business Week 1000, 14 of 22 manufacturers of computers and peripherals, and 18 of 31 software firms – including the two largest – are headquartered in the West. Of the top six biotechnology firms, the three largest are in the West.

The West is a leader in these foundation industries of the New Economy for several reasons. First, the region’s social, political and institutional atmosphere is more conducive to start-up industries. Example: The January-February 1995 issue of Expansion Management magazine rated the 50 states on their business climate. Of the four states in Expansive Management’s top category, three are in the West. Of the six states in the next highest category, three are in the West.

Second, we live in a sellers’ market for talent – and more of the entrepreneurs and knowledge workers on whom these industries depend prefer lifestyles that are available primarily in the West.

Globalization. International trade is America’s fastest growing commercial sector. According to the International Monetary Fund, the value of world exports plus imports rose from $6 billion in 1948 to more than $6 trillion in 1990.

This pattern is also found in the Western states, where exports are a major course of new jobs. Western exports come from both the traditional resource industries (e.g., agriculture, coal) and from the new knowledge-based industries. Examples: “edu-tainment” (computers, software, entertainment, multimedia) and business and professional services (telecommunications, management consulting, design and construction, financial).

As global economic activity has shifted from the Atlantic to the Pacific, Los Angeles is poised to be in the 21st century what New York was during most of the 20th, London in the 19th, and Paris in the 18th – a “world city,” a dominant center of world commerce, culture and fashion.

Seattle (like Atlanta and Miami in the South and Chicago on the Great Lakes) is already an established global hub; Denver, Salt Lake City, Portland and Phoenix are emerging global hubs. The coming Pacific Century will also be an American Century.

Gentrification. The revolution in telecomputing (computers plus telephones plus software) and rapid advances in express mail have eliminated nearly all the liabilities of the West’s remote location. One result: More entrepreneurs and freelance professionals – writers, brokers, software designers, analysts, engineering and management consultants – are migrating to the West’s small towns and urbanized areas where they use new telecomputing technologies to create new businesses as they remain connected to the outside world by modems, faxes, express mail and airplane tickets. We call these people Lone Eagles. Two or three Lone Eagles can be a major economic boon to a small town.

As the 21st century approaches, the West has a lot pulling for it – its geographical location, the richness of its natural resources, the education and energies of its peoples, the youth and openness of its political structures. The West also has growing political clout, as shown by the Electoral College, where the region accounts for one out of three votes – up from one out of five (16%) in 1952.

But the West’s greatest advantage may be its attitude. In the words of the great Western writer Wallace Stegner, the West is “the native land of hope.”

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