Think Colorado and it’s hard not to think of a robust and healthy populace getting out and about in a robust and healthy landscape. Around here, they don’t need New Year’s resolutions — the devotion to the good life is a year-round pursuit.
There’s good reason to believe that perception is one key to the state’s thriving business climate. After all, who wouldn’t want to be in the second most active state in the nation surrounded by 5.9 million people (median age 37.5) whose idea of a good time trends as much toward fitness as festivals — with plentiful options for both?
The 2021 Sharecare Community Well-Being Index released in July 2022, based on nearly 500,000 surveys covering 10 domains such as food access, physical well-being and financial well-being, ranked Colorado No. 7 in the nation. The report’s most recent metro-area analysis ranked Boulder No. 10 in community well-being among the nation’s 383 metro areas. Metro Denver was No. 18 and Fort Collins was No. 41.
In an era when talent trumps all other site selection factors, attracting high-caliber people is key to attracting the high-growth companies that will employ them. Colorado is part of a western-moving trend that saw 11 western states grow by more than 153,600 people in the year between July 1, 2021, and July 1, 2022. U.S. Census Bureau estimates released in December 2022 show the state has grown by 66,193 residents since April 2020, making it the 12th fastest growing state since that month.
“Colorado’s strong economy continues to outpace other states, with lower unemployment and more job growth here in Colorado than we are seeing nationally.”
— Colorado Gov. Jared Polis, December 20, 2022
The state’s population grew by 14.8% (744,518 new residents) between 2010 and 2020. That’s the sixth-strongest surge in the nation. From 2010 through 2019, Colorado averaged 50,000 net in-migrants per year — equivalent to the number of advanced college graduates the state produces annually, which make the state No. 3 in terms of the education of its population.
Something Ventured
A fair number of those residents — new and longtime alike — are the entrepreneurial type. Fitsmallbusiness.com has called Colorado the No. 2 state to start a business (2019). More recent analysis confirms the influx of adventurous thinkers and venture capital.
In late 2022 I worked with Conway Data Director of Programming Daniel Boyer to search the granular data from the National Venture Capital Association and Pitchbook for meaningful location-based rankings based on six categories: VC deals, VC investment, number of company exits, exit investments, number of fundraising rounds and fundraising investments between Q1 2014 and Q3 2022. Colorado was No. 5 in our overall evaluation, ahead of larger states such as Illinois, Texas and Virginia. Boulder was No. 10 among our top VC metro areas and No. 5 per capita, with the Denver-Aurora metro area vying with such areas as Chicago and Salt Lake City as an emerging VC metro.
When it comes to doing business, Colorado is No. 21 in the nation according to the 2023 State Business Tax Climate Index from the Tax Foundation. A new two-year, $700 million property tax cut signed into law by Gov. Jared Polis in May 2022 will relieve the strain caused by soaring home values, while also reducing the assessment rate on businesses from 29% to 27.9% — the first reduction in the commercial assessment rate in 40 years. In November 2022, Proposition 121 passed, meaning a reduction in the state income tax rate from 4.55% to 4.4%.
The state’s most recent economic outlook states, “Monthly new business applications have stabilized at a high level after rapid increases through mid-2021, while business ownership has increased significantly among Blacks and Latinos.” In the tech sector alone, a new company is born in Colorado every three days. Meanwhile, Colorado’s State Demography Office forecasts that Colorado’s population will exceed 8 million by 2050.
In business climate terms, that convergence means the view from the mountaintop is clear and sunny as far as the eye can see.
Complementing the entrepreneurial landscape is an environment conducive to employee ownership: There are 105 ESOPs across more than 88 Colorado communities.
“Several states have taken steps to encourage employee ownership, but they often turn to one state — Colorado — for inspiration,” Loren Rodgers, executive director of the National Center for Employee Ownership, tells me. “Colorado not only has a large and diverse community of employee-owned businesses, but a state-led effort to promote different forms of employee ownership. The result is more successful companies and more stable employment — with those companies and jobs rooted in Colorado, and with the profits they generate circulating inside Colorado’s economy.”
Add a healthy profit circulation system to the state’s annual check-up results and you have a recipe for one of the nation’s healthiest, most attractive economies.
