Boulder looks to redefine how innovation is measured

BOULDER — Brookings, Forbes, Fortune, Kauffman and other indexes are all measuring innovation, but Boulder Chamber and Boulder Economic Council believe they have found a better way to compare the city to the likes of Silicon Valley, Seattle and San Francisco.

After years of research, analysis and focus groups, the Boulder Innovation Venture Report was developed to compare Boulder to known national innovation hubs on issues like the people, investment capital, research and development as well as place and quality of life.

“These other reports all compare peer-to-peer top cities for startups, education, etc.,” said Clif Harald, executive director of the Boulder Economic Council. “These lists are made all the time and the media makes a big deal of them. But they tend to just do the largest metro areas. They almost always pick the top 50 cities, and it’s rare they get to small metro areas. So we are often not on these lists. Denver often is, Colorado Springs occasionally.”

But Harald said there was a belief in the city that Boulder could stack up to the giants.

“We kept saying we know if it were normalized and compared these areas per capita and per business we would rank really high,” Harald said. “We decided to take it on ourselves to do our own comparison against the big stars in the innovation and entrepreneurship. We wanted to demonstrate our leadership in innovation and entrepreneurship through this analysis.”

The Business Research Division of the Leeds School of Business at the University of Colorado Boulder was contracted by the Boulder Economic Council to research and analyze the data that formed the Boulder Innovation Venture Report. Ultimately, the Boulder County Metropolitan Statistical Area (MSA) was compared to MSAs at least three times its size: the Austin-Round Rock, Texas MSA; Boston-Cambridge-Newton, Mass.-N.H. MSA; Denver-Aurora-Lakewood; Portland-Vancouver-Hillsboro Ore.-Wash. MSA; Raleigh-Durham-Chapel Hill, N.C. MSA; San Francisco-Oakland-Hayward, Calif. MSA; San Jose-Sunnyvale-Santa Clara, Calif. MSA and the Seattle-Tacoma, Bellevue, Wash. MSA.

“We wanted to compare ourselves against well-known innovation centers,” Harald said. “These are the ones best known and that you see a lot of reporting on. Usually it’s apples to oranges when you compare Silicon Valley with Boulder or Seattle with Boulder. If we wanted to compare ourselves to the nation’s leaders, the only way to do it is to normalize it and make it apples to apples. So most of these statistics are on a per capita basis.”

When normalizing the data, Boulder often stacks up well. Some of it was expected: Boulder ranks No. 1 on percent of population 25 and up with a bachelor’s degree or higher and on percent of population 25 and up with a graduate degree. Others were surprising: Boulder tied with the Seattle MSA on coffee shops per 1,000 residents and outranked all the peer cities on restaurants per 1,000 residents.

“Our target audience was us, to an extent,” Harald said. “We wanted to educate ourselves on our strengths. Many of them we didn’t know about.”

In addition to getting a pulse on what Boulder excels at and how it compares, Harald said a goal of the report is to communicate to the nation Boulder’s talents and benefits. He clarified that the goal isn’t necessarily to recruit new businesses to the Boulder area, but to retain the entrepreneurs already in the region and spread their stories.

The report indicates many places where Boulder excels. The city ranked No. 1 of the peer cities the report is comparing on the 2017 Bloomberg Brain Concentration Index, which measures the concentration of full-time STEM workforce, advanced degree holders and net business formation. Boulder has the second highest percentage of STEM jobs out of total employment, ranking just behind the San Jose, Calif. MSA. Boulder ranks second for utility patents granted per 100,000 residents, also behind San Jose. It ranks second for 2017 venture capital investment per capita, behind San Francisco. And it ranks above Portland and Denver for total 2017 venture capital investment.

There are also areas where Boulder is ranked higher than it might want to be. The city has a median single family and multi-family home sales price of $504,000, only ranking behind San Francisco and San Jose.

“Housing is an important question,” Harald said. “I can’t say definitively whether it’s good or bad for innovation. Hopefully over time we will see trends emerge that will inform us better on the correlation between housing and innovation activity. But it is a challenge. The desirability and quality of place has been an attractor for creative thinkers and entrepreneurs. But the cost of living not just in Boulder but throughout the Denver metro is becoming an impediment especially amongst younger people bringing their energy and new ideas. That is a threat and challenge to us.”

But looking bigger picture, Harald said it was unique to an innovation report that Boulder included factors like housing and quality of place.

“It’s not so common, but in Boulder quality of place is as fundamental as it gets,” he said. “It’s what differentiates Boulder from other communities in the world and is what draws people here. We represented that in that section of the report by looking at the physical environment and cultural amenities. They can be hard to quantify but CU looked at interesting things, like the number of coffee shops.”

Harald said this report will be updated every other year, to continue measuring and comparing Boulder innovation. In the meantime, the goal is to communicate to Boulder businesses, the region and even the nation that it exists. That includes sharing the report and the factors looked at to other innovation rankers, like the Kauffman Index. That also means that other cities might start using Boulder’s methodology to compare more apples to apples and see how they stack up in innovation.

“More data, more understanding,” Harald said, “is better.”