Startups powering new wave in tech sector

Most sectors of the economy have simply sought to weather the recession, but technology industries in Northern Colorado have found a way to thrive during these lean times.

Even as economic growth was slow and unemployment remained high in 2010, Northern Colorado business in clean technology – alternative and renewable fuels and energy efficiency – and bioscience and information technology has developed at a brisk pace.

“We’ve seen literally an explosion of new startup companies,´ said Mark Forsyth, CEO of the Rocky Mountain Innovation Initiative in Fort Collins, which supports and promotes new science and tech businesses regionally. RMI2 has fostered the establishment and growth of 30-plus businesses, including several new and emerging companies that received recognition during the past year. And since 2008, RMI2-supported enterprises have attracted $70 million in investment capital.

Forsyth and other boosters of the so-called Innovation Economy say the local tech sector has avoided the harsh recession repercussions because of several factors. Companies looking to put down roots and investors seeking out sound businesses have taken notice of the performance and reputation of several established tech titans – Hewlett Packard, Advanced Energy, Woodward – and the institutional support from the city of Fort Collins and Colorado State University, among others. The region’s skilled workforce has also attracted business and sprouted its own enterprises.

Both AE and Woodward have announced increases in sales and revenues – and stock earnings – from last year, signaling the large companies have, for now, pushed through financial slowdowns. Among the bevy of startup firms, several clean-tech groups posted prosperous years, including Abound Solar, Ice Energy and VanDyne SuperTurbo. These clean-tech businesses represent a next wave of industries that are building on Northern Colorado’s tech legacy and growing despite the dreary global economic environment.

Partnerships key

Partnerships between the small, emerging companies and bigger firms have been key to landing major projects and grants. According to Forsyth, regional companies have done an exceptional job of winning Small Business Innovation Research grants from federal agencies, by collaborating and promoting their different specialties. The SBIR grants fund product development for government purposes, but also specifically enable new and small businesses to pursue commercial applications and sales. These successes are the fruit of a regional strategy, first launched in 2005, to build industry clusters that have encouraged these cooperative partnerships, Forsyth said.

In 2011, new cluster groups focused on water innovation and advanced engines could spur the next round of successful tech businesses in the region. The already established bioscience cluster should also get a boost from the CSU Research Innovation Center, which supports public-private partnerships, Forsyth said, and from RMI2’s new facilities, which have offices for a number of its supported firms.

Technology ventures remain typically high-risk investment opportunities, so wooing capital will remain a priority in the coming year. More developed technologies, such as solar and wind energy, face the greatest challenges in finding suitable investors since companies, including Abound Solar and global wind giant Vestas, are building manufacturing lines and major installations that require large infusions of funds. Smaller companies centered around green-building and energy-efficiency innovations – Ice Energy and VanDyne, for example – should remain more attractive to investors.

State political changes should also play some role in the development of the regional tech industry. Outgoing Gov. Bill Ritter championed clean-energy industries and the New Energy Economy, and Gov.-elect John Hickenlooper is expected to continue many of his initiatives, already announcing a “full-court press” to renew grants that support the Governor’s Energy Office after he takes office Jan. 11.

But for the first time since 2006, Republicans control the state House of Representatives, and have already renamed several House committees to reflect an interest in more traditional energy development. If politicians try to block state clean-energy funds and incentives, it would likely impact the direction and pace of regional business growth for local tech industries.

“Northern Colorado clearly benefits when clean energy is a driving focus for the state,” Forsyth said.

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