Business leaders: Worst is over

BOULDER – The economic recovery appears to be gaining traction both locally and nationally, and more businesses are looking to invest and more businesses are being formed, according to local experts who participated in the Boulder County Business Report’s latest CEO Roundtable.

The roundtable was devoted to generating an economic outlook for 2012 and gaining perspective on how the national and international economies are affecting the Boulder area and Colorado.

“Colorado entered the recession later, came out later and seems to be accelerating faster than the rest of the country,´ said economist Richard Wobbekind, executive director of the Business Research Division at the University of Colorado’s Leeds School of Business.

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The Boulder area has weathered the recession better than most areas in Colorado, and its strength in the professional and business services sector, which includes lawyers, accountants, corporate executives, scientists and software developers, should help boost its economic prospects, Wobbekind said.

Concerns about the fragile state of Europe’s economy and its potential negative effects on international trade make the big picture less clear, but Wobbekind remains optimistic there will be job growth nationally and locally.

Executives at the roundtable said they have seen signs for optimism in their industries.

“Companies are starting to spend money again, they’re buying hardware and they’re buying software,´ said Pete Lorenzen, an IBM Corp. vice president and the Boulder senior location executive.

Patrick O’Brien, Boulder market president of the Guaranty Bank and Trust Co., said his bank has seen a surge of request for loans from clients looking to invest the money back into their businesses.

Many companies slashed operating expenses and payroll dramatically during the recession.

“In general, businesses just cut to the bone,” O’Brien said.

The requests indicate companies that survived are healthy and getting ready for growth.

More businesses are forming and needing legal advice, said Giovanni Ruscitti, founding partner of Berg Hill Greenleaf & Ruscitti LLP. There also is a demand for more help with mergers and acquisitions and securing investment.

“We’re seeing it on the ground level,” Ruscitti said. “There’s a lot of activity going on”

Boulder area residents continue to come up with great ideas for new businesses, Best Organics Inc.’s CEO Seleyn DeYarus said.

“I’m always amazed when I go to these events and there are 120 people, and there are a bunch of new bright-eyed people with a new product,” DeYarus said.

DeYarus’ experience primarily is in the natural and organic products industry, which has held its own despite tough times.

“We’ve had sustained growth in our sector. Obviously there’s been a slowdown (because of the recession), … but nevertheless we’re growing,” DeYarus said.

Local governments are trying to help and are changing their strategies, Longmont’s economic development director Brad Power said.

Economic development organizations have historically focused on the “Big Kahuna” projects that will bring hundreds of jobs to a community by opening a plant or regional office, Power said. The proposed Phillips research facility in Louisville is a prominent local example.

Economic developers are starting to recognize they may do their best work with small companies, or with large companies that want to start a small office, Power said.

“Our best work is with those people who are bringing 20 jobs at a time, 70 jobs at a time,” he said.

Longmont also is looking inward to help firms already in the city.

“We’re trying to say to the companies that are already there, we want you to grow in place,” Power said.

That has long been the strategy pursued by Boulder.

“It would be foolhardy for us to spend a lot of time trying to court new companies,” Boulder Economic Council’s executive director Clif Harald said. “Largely it’s a retention game for us, and we have a lot to retain.”

“We really do have a competitive advantage in four or five industries that distinguish us on an international scale,” Harald said. “That diversification of businesses in our economy is a real asset, and it does distinguish us from other communities that are more dependent on ‘elephant hunting.’ “

Boulder’s challenge is to ensure that companies can make the transition from startups to thriving, mature companies without uprooting. Most firms that started in Boulder want to remain, but finding space to expand is difficult, he said.

“There’s an incredible allegiance to Boulder that is gratifying to hear. Our job is to make them know they’re appreciated here and can grow here,” Harald said.

Businesses remain concerned the city of Boulder might municipalize its power system and are still trying to understand what effect that will have on rates and reliability.

“It’s a conversation I have almost daily with businesses,” Harald said.

The University of Colorado at Boulder has its own concerns that could dramatically affect the local economy. The university continues to fight for support from the U.S. and state government, and the outcome will affect the quality of teaching and research at the university, CU’s vice chancellor for strategic relations Frances Draper said.

“One of the things we want to do is build a pretty bad-ass university,” Draper said, despite Colorado ranking 48th in the amount of public funding for higher education.

Out-of-state students are subsidizing in-state students, and the university has become dependent on federal grants to conduct research. The government’s budget for research is shrinking, though, making competition among universities more relentless, Draper said.

The benefits of CU’s research dollars go beyond academia and benefit local high-tech companies such as Ball Aerospace &Technologies Corp., Harald said.

“This research money goes into the economy as a whole,” Harald said.

The roundtable was hosted in the office of Berg Hill Greenleaf & Ruscitti LLP, which co-sponsors the event with Ehrhardt Keefe Steiner & Hottman PC.