Colorado is positioned to become a business innovation leader in the center of the country, according to a new study by Colorado State University economics professor Stephan Weiler.
Weiler announced his findings in early August at the 2012 Colorado Innovation Summit. The two-day gathering in Denver brought together business, government, education and community leaders for a summit to discuss innovation and the business climate in Colorado.
Weiler, a research associate dean in CSU’s College of Liberal Arts, and four CSU student research assistants produced “Reaching Our Innovation Summit: The 2012 Colorado Innovation Index” at the request and with the support of Ajay Menon, Colorado’s Chief Innovation Officer and Dean of CSU’s College of Business. The report compares Colorado’s innovation economy to other states and provides a call to action that defines innovation issues and challenges facing the state.
“This is the opening hand in this debate, and I wanted to be an objective analyst, taking as much of an agnostic view as possible,” Weiler said.
Over the past year, Colorado’s emerging innovation climate has been touted across the nation. The 2011 Kauffman Index of Entrepreneurial Activity listed Colorado as fifth for the highest rate of entrepreneurial activity in the United States, with 450 new business owners per 100,000 adults.
Earlier this year, MoneyTree named Colorado the fourth leading destination for Early-Stage Venture Capital Investment, the U.S. Chamber listed Colorado second for the 2012 top 10 states for entrepreneurship and innovation, and StartUpHire listed Colorado as first for growth in the startup job sector, as the state saw a 170% increase in startup jobs between 2010 and 2011. Colorado has come a long way in innovation and is well positioned in terms of being a national player, Weiler said.
“Places like Massachusetts and California had a huge head-start on us, but we have made up a lot of ground,” he said. “Could Colorado become the most innovative state between those states? I think that’s a worthy challenge to consider going forward, and there are some real reasons to be optimistic.”
Weiler pointed to Colorado’s entrepreneurship and a business climate friendly to small business lending. He also noted that the state’s growing, highly educated population is another positive factor and has helped Colorado become an “innovation leader.”
“I don’t think you would have thought of the state as a potential innovation leader 20 years ago,” he said. “There are some real reasons to be optimistic.”
At the same time, he said there are warning signs that should be heeded, including the dwindling of venture capital pouring into the state. The big concerns, however, deal with two of the state’s primary strengths.
“We used to be a nice place to live that was relatively cheap and that helped fuel our growth,” he said. “Well, it’s no longer as cheap to live here, and we are not educating our young people like we used to. A big part of our educated population came from move-ins from other states. Effectively, we’ve become even more reliant on these in-migrants, as our production of our own talent has diminished and our quality-of-life vs. cost advantages are fading as well.”
Weiler hopes the index can become an annual study that helps the state track its growth—or decline—in innovation.
“What I’m really heartened by is having all of these high-profile business leaders alongside public figures at this event,” he said. “Colorado is now on the map when it comes to innovation, and that is something to be excited about. We’ve come a long way but there are some holes we’ve got to fill. If everyone comes out of this realizing there are some clear benefits to everyone involved, I will be pleased.”