- Colorado’s reputation as an “entrepreneurial” community is well founded given its self employment breadth and business density, which is well above the national average as well as highest among benchmark states.
- There is a national trend towards an increased share of non-employer establishments (i.e. those establishments having no paid employees and generally in the form of a sole proprietorship, partnership or corporation). True to its reputation, Colorado houses a high density of all businesses, although their growth since 2000 has slowed significantly.
- Colorado continues to be competitive in number of employer establishments. Like other benchmark states and the United States as a whole, the size of these establishments at birth is declining. These smaller employer firms and larger share of non-employers suggest an emerging trend towards micro-entrepreneurs, a primary storyline of the entrepreneurship section.
- Nationally, the five-year survival rate of a small business is just slightly less than 50%. The survival profile over an establishment’s critical first five years in Colorado is less than the national average, as is the profile of most other benchmark states. However, for those businesses that do survive in Colorado, employment growth, as well the income returns to both entrepreneur and the labor force, exceed the national average and most benchmark states.
Ideas: Research and Development
- Colorado’s ability to secure public funding for research is slightly above the national average, and university/nonprofits are also slightly ahead of the nation in terms of R&D activity.
- Nationally, private business contributions to research and development represent over two-thirds of the total research and development funding. Colorado, while ahead of other benchmark states, is below the national average and significantly behind leader benchmark states.
- Colorado is home to a highly educated workforce, in terms of both bachelor (2nd among benchmark states) and graduate degree (3rd among benchmark states) recipients.
- While competitive against other benchmark states, nationally Colorado ranks 24th out of 50 states in terms of high school graduation rates.
- Colorado outperforms the national average for STEM degree attainment, although women’s STEM degree attainment has declined nationally as well as locally.
- Educated migration continues to benefit the innovation ecosystem in Colorado, although appears to be on the decline in terms of both domestic and foreign migration.
- Bank loan, venture capital, and initial public offering data indicate that Colorado’s capital market in general mirrors the national trend downward since the Great Recession, and are particularly weak in terms of the average amount of financing.
- The relatively large number of bank branches and community banks per capita suggests Colorado has potential longer-term advantages for strong relationship lending.