08 Sep Colorado offers economic growth lessons for Wisconsin
Boulder, Colo – The drive along the U.S. 36 corridor between Denver and Boulder offers stunning views of the mountains that make up Colorado’s Front Range, as well as impressive perspectives on the state’s economic growth.
Technology companies in the life sciences, telecommunications, energy and aerospace have found a home along the often-congested corridor, which is among many physical examples of Colorado’s business boom.
While Wisconsin can’t offer mountain vistas, the story of Colorado’s economic performance offers some potential lessons for the Badger State — as well as affirmation of trends already underway.
An annual 50-state study conducted by the Metro Denver Economic Development Corp., using a variety of sources, provides statistical evidence to support what’s obvious to the human eye. Released in late 2013, the study showed that Colorado ranked fifth in the nation in employment growth, fifth-highest in business creation and third in high-tech employment concentration.
Its overall competitiveness rank was sixth, its “new economy” index was seventh, its per-capita personal income was 13th, its economic outlook index was 16th and its innovation index was seventh.
Colorado ranked 12th in entrepreneurial activity, fifth in number of new businesses for 1,000 employees, fifth in venture capital investments per $1,000 for state domestic product, ninth in initial public offerings, third in federal Small Business Innovation Research grants and consistently high on research-and-development investment and patents.
The list went on and on, but you get the picture. Colorado is humming along, despite what the report described as “miserably low” spending on higher education, weak investment in highways and other public works, and housing costs that appear to be rising faster than wages.
Observers credit a mix of factors beyond the outdoors hooks: A regional government approach in the Denver area that keeps municipalities from fighting among themselves, a pro-business governor with an entrepreneurial background, the lure of Denver International Airport, the energy boom, labor stability and major research universities and federal labs across the state.
“But the secret sauce is creating a culture of entrepreneurship and being a place that attracts and retains talent,” said Stephen S. Miller, senior director of entrepreneurship for the Daniels College of Business at the University of Denver.
Miller, whose background includes working for and with tech-based companies, said what fuels Colorado is a culture that appeals to younger people with a “live, work, play” outlook. It’s a setting that welcomes transplants who are just as likely to be spotted wearing Badgers or Packers garb at Swanky’s on Blake St. as cheering for the Buffaloes or Broncos.
“It’s not hard to attract younger people here,” he said. “And once students from elsewhere get here, it’s hard to pry them away.”
The top three states for exporting talent to Colorado are Texas, California and Illinois. That is despite Colorado’s policy of making up for low in-state public university tuition with high out-of-state rates.
Some of the entrepreneurial support systems in place in Colorado are much like what Wisconsin has begun to build. Miller credits an “ultra-vibrant mentoring network” that is cross-generational, with older entrepreneurs mentoring newcomers and sometimes the other way around.
Younger workers and companies have clustered in areas where there’s a mix of lifestyle attractions and cohesive working spaces. Colorado has also seen an explosion in business accelerators, to the point where Miller doubts most will survive — a matter for the markets to decide.
Most of Colorado’s venture capital comes from outside the state, Miller noted, but there’s a premium on local firms co-investing with larger outside funds and “working with investors who value the growth ecosystem of the state.” That helps keep young companies from being uprooted.
Because Colorado has relatively low taxes, Miller said, it lacks discretionary money to spend on unfocused economic development targets. He praised the $25 million Wisconsin investment so far in the state’s new “fund of funds” as an example of targeting dollars while protecting taxpayers.
Entrepreneurs in Colorado and elsewhere are most interested in government removing — or not erecting — regulatory and permitting barriers, he said. “The last thing on their minds is paying taxes. It’s as much about the time as it is the money,” Miller said.
So how do Wisconsin’s rankings compare to Colorado? In some areas, they stack up well: Wisconsin was 18th in competitiveness, 15th in economic outlook, 12th in academic R&D, 16th in patents and fourth in state and local tax burdens on new investment. In other categories, Wisconsin was middle of the pack or lower.
Wisconsin can’t sprout mountains, but it can stay the course in encouraging its high-growth, innovation economy. That’s a mountain worth climbing.
Recent articles by Tom Still
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