Boulder economy, while challenged, rides a wave of science

BOULDER — Boulder’s economy faces significant — but familiar — challenges, including labor shortages, inflation, workforce training, lack of affordable housing and high vacancies in office space.

But the city also enjoys a diverse economic base, with one industry in particular — life sciences — showing heightened promise.

That was the message at the Boulder Economic Summit, presented Thursday by the Boulder Economic Council and the Boulder Chamber at the University Corporation for Atmospheric Research’s campus on Center Green Drive.

The theme for the program, “Our evolving economy,” served as an umbrella that brought a mixture of presentations, ranging from a celebration of The Sink restaurant on the Hill to a Nobel Prize winner to a panel of representatives from other industries.

Chris Heinritz, co-owner of The Sink, engaged in a discussion with John Vahlenkamp, senior editor with Prairie Mountain Media. The Sink is celebrating its 100th anniversary.

After relating the history of the restaurant and showing video segments about the iconic eatery, Heinritz described challenges faced by The Sink, including attracting workers.

“Our No. 1 challenge is attracting labor, and that includes affordable housing,” Heinritz said, noting that the restaurant has no employees who live in Boulder.

But he expressed optimism about two new hotels and a conference center being built on The Hill, with one hotel/conference center on the University of Colorado Boulder campus.

“It’s going to really change how the hill operates,” he said, noting that the projects will bring “new faces” into businesses in the area.

“We need to revitalize The Hill, and hopefully, this is a big step forward for us,” he said.

Strength in science

Boulder’s strength in science was highlighted with remarks by Antonio Busalacchi, president of UCAR, who related the history of the organization’s presence in Boulder and impact on science and the economy locally.

UCAR is a consortium of 126 colleges and research universities and manages the National Center for Atmospheric Research for the National Science Foundation. UCAR employs 1,450 people, with a five-year budget of $938 million, focusing research on weather, water, climate, and air quality, as well as fostering the next generation of researchers.

Busalacchi described the vision of Walter Orr Roberts, the first director of NCAR, who was instrumental in its locating in Boulder, seeking to “solidify Boulder as a scientific city.”

Roberts also helped lure other federal laboratories to Boulder.

“He wanted to create a community that fostered scientific relationships,” Busalacchi said.

CU feeds life-sciences sector

Scientific strength also extends to the University of Colorado Boulder, which has helped foster scientific breakthroughs and economic growth in the life-sciences sector.

Tom Cech, distinguished professor of biochemistry at CU and a 1989 Nobel Prize laureate, noted in a keynote address that discoveries at the university have long made it to the marketplace.

Describing CU as a “biotech catalyst,” Cech said the university is at the crossroads of commerce and research.

“We do not neglect the fact that we can have an impact on the world if we commercialize our discoveries,” he said.

Cech referenced work by CU’s Larry Gold, Leslie Leinwand, Marvin Caruthers, each of whom has helped launch multibillion-dollar companies.

Gold has launched a number of companies, including SomaLogic Corp., which went public in 2021 and recently announced a merger with Standard BioTools.

Leinwand co-founded MyoKardia Inc., a biomedical company that develops small-molecule therapeutics that address clinical needs for patients with genetic heart disease. The company was acquired in 2020 by Bristol Myers Squibb for more than $13 billion.

Caruthers, a founder of Amgen, Applied Biosystems and other companies, recently received the inaugural Richard N. Merkin Prize in Biomedical Technology.

Cech’s research on RNA helped pioneer mRNA vaccines used most prominently to vaccinate against COVID-19. Whereas traditional vaccines introduce a harmless piece of a virus into the body, triggering an immune response, messenger RNA vaccines do not include actual viruses but still trigger an immune response.

He noted that mRNA vaccines are not medicines or drugs.

“When we talk about it in that way, it tends to frighten people. It tends to make them suspicious of it,” Cech said, noting that mRNA exists naturally in humans and “in all of the food we eat.”

Cech, asked about the Boulder area’s status relative to other centers of biotech activity, said the area will never rival the largest centers for the industry.

“I think the Front Range in Colorado does not have the density or the number of companies that the two biggest places have, and that’s south San Francisco in the Bay Area and the Cambridge/Boston area,” he said. “I don’t think we have any chance of ever catching them.”

He said the reason is that the longevity of startup biotech companies is unknown.

“Failure is certainly something that can happen,” he said, and employees want to know that if an employer fails, “they can go across the street to another company.”

He said that although the Front Range does not rival the Boston or San Francisco areas, “We’re in the group right below that,” alongside markets such as San Francisco.

Reports from ‘Around Our Economy’

Jessica Erickson, director of business development at Sun Construction & Facility Services Inc. in Longmont, moderated a panel discussion bringing in different voices about the economy.

The panel included Chris Heuston, director of apprenticeships at Front Range Community College; Bhavna Chhabra, Boulder site lead for Google; Trent Hein, co-CEO, Rule 4 LLC; Becky Gamble, CEO, Dean Callan & Co.; and Steve Ouellette, president of ROI Alliance, a management-consulting company.

Gamble said growth in the life-sciences industry — as noted by Cech — has begun to permeate the commercial real estate sector, with office and other types of properties converting to life sciences.

“We’ve seen some of the largest life-science owners and developers in the country come in and make very significant capital investments,” Gamble said, referencing BioMed Realty’s purchase of 1 million square feet in Flatiron Park for $625 million, the largest portfolio transaction in Colorado history.

BioMed has been converting some of that space to life sciences, with other companies also building space throughout the Boulder Valley, targeting the sector.

“They’re looking at Boulder because of the university, because of the talent that’s here and because of the lifestyle that’s here,” Gamble said.

She said that she has yet to see “a huge impact” with companies moving in “because we haven’t had any existing lab space completed. That’s changing right now.”

Gamble said that several hundred thousand square feet of lab space is in development.

“And most of that will be coming online at the end of this year and next year. And I think at that point in time is when we will see a lot of companies move into Boulder that have never been here before, and more startups.”

But Gamble noted that office space in general continues to suffer from challenges posed by remote work, with downtown Boulder office space at about 30% vacancy.

Getting employees back to the office

Chhabra noted that Google employs about 1,800 people onsite at its Boulder campus, with “many more” working remotely, a holdover from COVID-19.

But the company is attempting to shift workers back to the office to promote creativity and productivity, she said.

“Prior to the pandemic. Google was an office-first, co-located, highly cohesive team company,” she said.

That changed quickly with COVID, with the company shifting to remote work. But as the pandemic eased, and hybrid work emerged, the system needed to change, she said, with team members now required to work in the office two to three days a week as a way to boost creativity and productivity.

“Google has declared that we are going to be doing everything that we can think of to bring people into the office because we believe that’s how innovation happens,” she said.

Workforce challenges

Hein said that the biggest challenge at his company, which specializes in cybersecurity and automation, is recruiting workers.

“On one hand from a business perspective, this market is awesome,” Hein said. “We are not limited today by sales. We’re actually limited by hiring, how fast can we hire?”

That’s because the profitability of cyberattacks has continued to increase, sparking more demand for Rule 4’s services.

Heuston said that Front Range Community College and other community colleges play a critical role in filling skills gaps by training students for specific industries.

Community colleges serve as a pipeline for workers, she said, although at times it can be difficult to predict what skills might be in demand down the road.

“Some of those jobs we don’t even know about yet,” she said. “If somebody would have told us about AI or ChatGPT five years ago, there would have been questions about that.

“So we really work to meet workforce needs by having strong collaboration with our industry partners. And that’s really critical in lots of areas from developing corporate training programs,  developing apprenticeships, but one of the biggest needs in Colorado is that skills gap.”

Promise and peril of AI

Ouellette said his company helps businesses determine the optimum metrics for success, including in working with artificial intelligence. He said business leaders enamored with AI should first understand the different types of AI that exist, including programs that engage in machine learning, with data and algorithms enabling a machine to learn; large language models such as ChatGPT; and vision systems that use technology such as a camera to detect defects in manufactured products or recommend improvements.

Users of AI should focus on specific problem-solving, he said, using data to test hypotheses.

Business owners should also determine what metrics they want to examine to measure success, he said.

“If you don’t measure the right stuff, and you put that into your AI in the future, it’s not going to know what’s going on, and it’s going to find all sorts of stuff that doesn’t help you,” he said.

This article was first published by BizWest, an independent news organization, and is published under a license agreement. © 2023 BizWest Media LLC.

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