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Slower venture capital growth compared to the rest of the nation and a low percentage of 18-to-24 year olds enrolled in post-secondary education provide some potential stumbling blocks for Colorado’s otherwise thriving innovation economy.
That’s according to third annual “The State of Innovation: Colorado 2014 Report,” released Monday by the Colorado Innovation Network (COIN). The report details Colorado’s economic growth in relation to innovation, measuring such things as talent, ideas, capital and entrepreneurship.
It compares Colorado’s stats in those categories to nine peer states that are innovation leaders or competitors with Colorado for new business, including Arizona, California, Georgia, Illinois, Massachusetts, New York, North Carolina, Texas and Utah. COIN works with consulting firm PricewaterhouseCoopers and the Colorado Office of Economic Development and International Trade to create the report.
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Colorado businesses and organizations have been leaders over the last five years in attracting Small Business Innovative Research grants and Small Business Technology Transfer grants, ranking sixth nationally for the value of the awards, the report states. The state’s work force is highly educated, ranking second in the country at 37 percent with a bachelor’s degree. The state also has high marks in patent output and new business creation.
But, the report states, venture capital investment in Colorado declined from 2012 to 2013, whereas nationwide it has increased. And, since the recession ended, the state is trailing its peer states in venture capital funding as a share of the state economy and growth in the number of venture capital deals.
While the work force is educated and talented in technical fields, the report’s authors pointed out that Colorado’s percentage of 18-to-24 year olds enrolled in post-secondary education is two percentage points below the national average of 39 percent. Given estimates of a national labor shortage of college-educated workers in technical fields by 2020, that could pose a risk for Colorado companies. The report found that STEM, healthcare professions, healthcare support and community services will be the fastest growing occupations in the state.
“Colorado has experienced a rapid employment growth rate of 7.1 percent since the recession,” the report states. “However, to stay competitive and foster innovation, Colorado will need to attract more early stage angel and venture capital investment for startups and also reconsider the level of state funding to support higher education research institutions.”