John, as you know, this topic - why do Oregon companies get acquired instead of doing the acquiring - is one that has fascinated me for years.

The question was first posed to me by Patricia McCaig over a decade ago.

Time and again - Fred Meyer and Willamette Industries are two more examples - Oregon companies get acquired, rather than being the ones that swallow up firms elsewhere.

"Too nice" is one possible explanation, though I suspect that's more a symptom than a cause.

The explanation that I've finally landed on is this - admittedly without any empirical proof:

Oregon is a nice place to live. People who move to (or stay in) Oregon do so for exactly that reason. As a result, our culture is such that people here don't do the rat-race 80-hour work-week thing (as much) as people who live elsewhere.

In short, Oregonians have lives. We value weekends at the beach, up the mountain, on the trail. We value evenings at the local pub, or afternoons at Powell's or the library.

And that means that when it comes to corporate raiding, we're much happier having our ship boarded by pirates - and sailing off on a golden lifeboat. The life of corporate piracy doesn't appeal to many Oregonians.

Those Oregonians who do want such a life tend to relocate to Seattle, Silicon Valley, New York, and elsewhere.

Portlandia says that Portland is a place where "young people go to retire". I think it's more accurate to say that Portland is where "50-something corporate executives would rather retire than become international corporate titans."

Phil Knight, as you note, is our most prominent exception. But I think he's the exception that proves the rule.

I couldn't tell if this was a gnashing of teeth, smug self-congratulations, or sour grapes?

Dog-eat-dog business doesn't come to Oregon because there are better states for that.

aren't 90% of all jobs and all economic wealth thru small/medium businesses? why do we sweat the big companies? our efforts should be directed at fostering the businesses that are an organic part of Oregon, and we should be working with concepts like Jefferson Smith's "Economic Gardening".

John makes an excellent point, and he's right about the tax base and job creation.

There are many reasons why a corporation locates in a specific area. They often cluster in cities where other large corporate entities exist because they can pull from the workforce, have a significant presence of large manufacturing companies nearby (within a certain radius), and exist where ease of travel is found. And, you'll often find corporations existing in states and/or cities with a large university presence. Tax rates (capital gains and others), along with tax incentives can also be factors.

Kari also makes a good point that the typical corporate culture doesn't exist in Oregon like it does elsewhere.

T.A.'s point is valid as the SBA reports that small businesses collectively create the most jobs overall (80% of all new job creation), but corporations employ the most people. So having a few large corporations would, as John said, not only provide more jobs in Oregon, but increase the tax base - which would bode will in Salem and at the local level.

Economic Gardening is worthwhile, but it's only one aspect of economic development. Gardening typically focuses on growing and expanding local businesses, but leaves out recruitment. Recruitment plays a vital role, too, as it helps diversify the economy, and bring in new money, jobs, and investment. Both local expansion and recruitment are equally important.

Corporations are also known to be large contributors to non-profit and other service organizations, etc. (And they're known to give to sports organizations...does PGE Park ring a bell?) According to the "Chronicle of Philanthropy" 68 American corporations (not identified), gave $3.9 billion in 2010. That's just 68 companies, so the overall giving of corporations is much larger than that.

The link below is a good read, as it provides a case study on Boeing's move to Chicago in 2001. Tax incentives are often used to lure corporations, and I'd argue that Oregon (and Portland) aren't very competitive in this arena. (Which could very well play to the lifestyle issue discussed above.)

"Of the many reasons, Boeing chose Chicago because of its overall geographic location, efficiency as a transportation hub and highly educated workforce."

http://www.tradeandindustrydev.com/industry/manufacturing/corporate-headquarters-site-selection-441

"thanks to Melinda, Bill Gates may be remembered more for his fight against deadly diseases than destroying his competitors."

Exactly. Robber barons almost always use charities to cover their tracks as well as to shape the future of society. What users of Microsoft remember about Bill, though, is that while he was the most ruthless at destroying his competitors, he didn't have, alas, the best software.

Do we really want more a-hole corporate bosses in Oregon?

John

I didn't care much about this when I lived here in the late 70s, but moving back here for the past decade, and this alternately puzzles and alarms me. The latter because I think we are or are in danger of losing pace with more entrepreneurial regions, and because I have watched more ambitious students, friends, and colleagues move out of state because the opportunities are limited here.

Kari's account might be part of it. I don't believe all of what Jenny writes; the "build things that are more lasting" does sound self-serving. If true, it should have resulted in some successful businesses.

My own additional diagnoses, based in large part on what I've seen in more dynamic areas (Bay Area, Seattle, Denver, Salt Lake City, Austin, RDU) are:

1) Higher education. It continues to seriously harm our economic development. Every single one of the areas listed above has one or more major research institutions. We have none and our flagship state institutions are, to be blunt, mediocre at best.

2) Business in Politics and Politics in Business.
Who are our business leaders who get involved in civic life, beyond Phil Knight building sports facilities at U of O? Why aren't the Boyles more involved? Who are the other major business leaders in this town? At the same time, why doesn't the political establishment celebrate business success?

3) Complacency. Ok so this is the controversial one. It's been referred to above as a desire to be raided and not raid. Or don't get rich quickly. I sometimes feel that we so precious, so inward looking, that we are unable or unwilling to look to other cities or states for examples or realize that we are in a competition for the best and brightest. After all, we are so great that people just flock to Portland, right?

BTW Jenny, I don't know what you mean by the boom and bust cycle in Silicon Valley. They have been booming for the past quarter century, while we are in the fourth serious bust cycle of the past decade. If Silicon Valley is boom and bust, I'll take it!

There was an article I read last week,(can't find it right now) that polled hyper successful business owners on their motivations. Guess what. It isn't money. It is winning. Their driving force was to be the best whatever they could be.

Not sure that mindset is valued here.

Good point, Michael.

Thank you for the interesting article. I know many people in the Portland Metro area who are willing to work themselves to the bone in order to try to hit a home run in their business. It does not matter what type of business, and certainly food and beverage and retail folks work every bit as hard as corporate types to try and be successful. And although I don't know too much about programmers or IT people, I assume they are out there right now working 24/7 to create value for themselves and their employers. In my own profession I think of the first and second year associates at big law firms working 70 or 80 hours a week.

But all things considered, at least from my standpoint Portland does not project a "vibe" of young people willing to sacrifice themselves on the alter of commerce to gain treasure for themselves and their dependents. I tend to agree with those who value family and freedom over personal profits, but I wonder if that has a negative influence on Fortune 400 companies considering a move here.

I’ve pondered, and come to no conclusions, on related questions. If much of the future global economic growth is going to take place abroad in emerging markets (in places like China, India, and Brazil), why is there no public interest in Oregon in tapping into those markets and increasing our export of goods and services? For example, President Obama has an effort underway to double our national exports in four years. Yet no political or business leader in Oregon has uttered such an Oregon related goal. The economic opportunities are out there. Some of our businesses go after them (Nike, Intel) but there is little public focus, support or even discussion of possible ideas on how to increase exports.

John

I do remember the dot com bust. Seems like Silicon Valley has recovered pretty well, yet "Silicon Forest" is a dim memory.

I bet if we look at wealth creation, unemployment and income numbers, San Jose has outpaced us by a huge amount in the last 40 years.

Good, bad, or indifferent - Oregon has a reputation. (Portlandia is a good indicator. Portland, Salem & Eugene embrace it while the rest of the state is probably chagrined.) On the plus side, many young (and a lot of older) people want to move to Oregon. Conversely, "The American Dreamers" think Oregon is a fine place to visit...

The answer to this question is obvious to anyone from another state the first time they pull up to a 4 way stop in Oregon. Nowhere else in the country will you see traffic congestion because 4 drives are all stuck waiting for the other to go first.

In all seriousness, huge successes like Intel, Google, Facebook and Microsoft are the rare exception. It is important to note that Oregon does well by these companies, even without having their HQ. Oregon is the largest Intel site in the world - not their Santa Clara HQ. Google and Facebook have made major investments for Data Centers.

This article really started me to thinking. I have been in the Salem business community since 1993 an am very familiar with hundreds of business owners here. I cannot recall one instance where I have ever heard of a business owner planning any type of growth that wasn't organic. Never heard any talk of M&A activity on any level.

Makes me think that many small businesses are nothing more than jobs for the owners. If they can grow to the point of having 5-10 employees, great. But I don't get the feeling that hyper-growth is what they want. Sure, some small businesses grow to be rather large, employing 100+ people, but that seems to be the exception rather than the rule here.

I must confess that I am doing the same thing. I have set my business up to be essentially a one man operation. Give me a computer and an internet connection and I can run this business from anywhere in the world. I only consider growth from product line expansion and market share growth.

Thanks John for making me think about this. You might have nudged me in a slightly different direction.

John,

As noted in Luring, Growing, and Retaining Corporate Headquarters and Management Offices: A Research Report Prepared for the Associated Oregon Industries Foundation by two Willamette University professors, there is little that the state can do to keep headquarters in an age of mergers and aquisitions, and they question whether HQs should really be the goal.