Medford, OR – A recent report from the University of Oregon has raised alarms within the state’s business community, revealing a concerning trend: more and more Oregon companies are being courted by recruiters from other states. According to the findings, 25% of the businesses surveyed reported being approached by out-of-state recruiters, and nearly 70% of those companies ultimately decided to expand or relocate outside of Oregon.
States like Texas, Washington, and California are often cited as preferred destinations due to their favorable business climates, including lower taxes, fewer regulations, and policies seen as more advantageous for companies. These states are actively enticing Oregon businesses with incentives that are increasingly difficult for Oregon to compete with.
Chris Dubose, board president of Southern Oregon Regional Economic Development, Inc. (SOREDI), acknowledged the national competition but noted that the degree of follow-through was unexpected. “We see a lot of competition nationally—especially from states like Texas, Washington, and California,” Dubose said. “So the outreach itself wasn’t surprising. What did surprise me was that it seemed to decline in 2023 and 2024.”
One high-profile example of this trend is Dutch Bros, which originated in Grants Pass, Oregon. The popular coffee chain, once a proud symbol of Southern Oregon entrepreneurship, has since moved its headquarters to Arizona. This relocation highlights a broader issue: many companies are increasingly questioning the viability of staying in Oregon, where costs are rising, affordable housing is scarce, and workforce shortages persist.
Dubose emphasized that while some business relocations are driven by expansion, others reflect deeper systemic challenges within Oregon’s business environment. “I’m not naïve enough to think other states aren’t trying to recruit our top-tier businesses,” he said. “But what’s also clear is that access to bigger markets, more flights, and even tax differences can be real deciding factors.”
Local incentives, such as the state’s Enterprise Zones, which offer temporary tax breaks for businesses investing in designated regions, have been helpful in some cases. However, Dubose suggested that these measures alone are not enough to retain businesses in the long term.
The University of Oregon report points to several key factors driving companies to consider relocating, including rising operating costs, the lack of affordable housing, and workforce shortages. These issues are making it increasingly difficult for business owners to justify staying in the state, especially when they can access more cost-effective options elsewhere.
“When business owners start asking, ‘Do I have to do this here?’—and the answer is no—they start looking into more cost-effective options,” Dubose explained.
In response to the growing threat, SOREDI is advocating for stronger coordination between local officials and state agencies, such as Business Oregon, to retain businesses and jobs within Southern Oregon. Dubose emphasized that without strategic collaboration and comprehensive solutions, the region may continue to see a decline in both the number of businesses and the jobs they provide.
As Oregon faces mounting competition from other states, the need for meaningful policy reforms to support local businesses has never been more urgent. The state’s ability to address rising costs, housing shortages, and workforce gaps will likely determine whether it can retain its economic base or watch more companies follow the path of Dutch Bros out of state.