Alliance: Springs must diversify economy

Colorado Springs’ biggest economic drivers come with a serious problem: None of the city’s top three industries actually must be here to be successful.

The military, tourism and higher education bring in the most money to the Springs, with the military providing one-third of the city’s $27 billion gross domestic product.

“That money all is dependent on things we can’t control,” said Joe Raso, president and CEO of the Colorado Springs Regional Business Alliance, which pitched its plans and corporate structure at a public meeting earlier this week.

“The Department of Defense can decide to spend money anywhere; it doesn’t have to be here. Families can decide to spend their tourism dollars anywhere; it doesn’t have to be here. And the 40,000 college students who are here don’t have to go to Colorado College, or UCCS or Pikes Peak Community College.”

It’s a problem, Raso acknowledges. Those sectors make up roughly half the local economy. Fixing the imbalance will take time and effort, he says.

But the Business Alliance has a plan, focusing on other sectors: aerospace, nonprofits, clean tech, health care, information technology and local businesses. Growing those will lead to a more healthy economy, Raso says.

“The bottom line is that we want to enhance the quality of the community,” he said. “And that means economic growth, so that business growth exceeds the growth of the population.”

It’s a tough job. The Springs economy hasn’t grown in relation to the rest of Colorado in three decades, providing about 11 percent of the state’s overall economy since the 1980s. The $27 billion economy in Colorado Springs equals about $40,000 per capita, Raso said. In the Denver metropolitan area, it’s around $60,000 per capita.

So Raso and his army of 20 staff members, 15 board members and 400 volunteers are combing the city, researching the top needs for businesses — and planning to find ways to meet those needs.

Not surprisingly, transportation, workforce, health care reform and sequestration are concerns.

“I’d have to say the top seven concerns are always about workforce,” Raso told 200 people at the Antlers. “We have to grow a workforce that meets the demand of businesses.”

But the Business Alliance isn’t solely focused on existing businesses. It touted 600 jobs announced by four firms since January. “We’re off to having a pretty good year,” said David White, chief business development officer. “A better year than we’ve had in the past couple of years.”

Moving forward

The alliance is working with 20 other companies with 150 more in the pipeline, White said. And an Australian company will announce its first U.S. location in the Springs, Raso said. It all takes some time, White cautioned.

“It’s like a Chinese fire drill at the beginning,” he said. “And then they go into incubation. Then, it’s a Chinese fire drill again.”

The group isn’t leaving out startups, either. White said the organization was reaching out to local entrepreneurs, trying to meet their needs and help them grow.

“To us, it isn’t about how big you are,” he said. “It’s about whether you want to grow in Colorado Springs. We’ll work with businesses of all sizes.”

Military concerns

The alliance wrapped up its public relations push by talking about its outreach to military and defense contractors. The uncertain federal environment puts the $9.1 billion sector at risk in the Springs.

“We don’t know what’s going to happen, what the effects will be,” said Andy Merritt, the RBA’s chief defense industry officer. “There could be some opportunities.”

Fort Carson could lose up to 8,000 soldiers or gain 3,000 — depending on which way the Department of Defense decides to realign the military’s missions. The Business Alliance submitted 200 comments in favor of growing the Mountain Post.

But the picture looks positive now, Merritt said. The combat aviation brigade is moving to Fort Carson, and President Barack Obama’s budget gave the largest share of construction dollars to the post to build new barracks and facilities for the helicopter unit.

Part of the Business Alliance’s strategy in combating loss of military personnel lies in relying on state and local lobbyists. The alliance testified against a bill before the General Assembly that would have created a state agency to buy back the often-controversial Piñon Canyon Maneuver Site.

“The Army ain’t selling,” he said. “So it’s not a real problem. But it is a problem of perception. The Pentagon tracks every piece of legislation in every state; they track negative comments, negative publicity. It makes a difference.”

That’s how Raso ended the 60-minute presentation.

“Be a positive ambassador for the region,” he said. “There are good stories here — we need to be telling them.”

One Response to Alliance: Springs must diversify economy

  1. We should be focusing on small business, I agree. I owned a small business a couple years ago, one of my biggest obstacles was getting local support not only from residents but the city. This was my first venture into small business ownership. I learned everything by trial and error, it was a great learning experience but also very expensive. I wish there were more resources available or some kind of mentor program. I found it not only difficult to get local support but financial resources were scarce at best. My business is now closed and I’m back to managing hotels.

    Taves
    April 25, 2013 at 9:17 am