Economic Development 2014

economic development in the 21st century

special section

gazette.com/business

sunday, january 19, 2014

LoCAL busIness

heALTh seRVICes

spoRTs eConomy

Flocking together Business alliance targets 11 key industries in which it hopes to cluster similar companies in the Springs

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by rob larimer

rob.larimer@gazette.com —

he Colorado Springs Regional Business Alliance’s Key Industries program aims to create industry clusters that can help foster the attraction and growth of similar companies in the city.

“What it says is that if you come here, you have an automatic network you can relate to,” said David White, former chief business development officer for the alliance, who left Colorado Springs for another job in California last month.

“It’s not just about the mission of attracting businesses anymore; it’s also about the mission of creating community.”

The business alliance has identified 11 key industries, or areas, in which it hopes to cluster similar companies. The key industries were chosen because alliance officials think the region has qualified workers for those industries and because those industries are ones officials want here.

White said the idea of having target industries isn’t a new one. Colorado Springs’ business and community leaders have identified target industries for the past 20 years.

What is new, though, White said, is the idea that communities surrounding the industries need to built and fostered.

“It used to be that we made a list of industries and said this is what we want, now let’s go get them,” White said.

Although that approach might have worked well for a while, it opened up the risk for short-lived successes because companies might move here only to discover there are no similar companies with which to create common ground, officials said.

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see alliance • page 5

Economic DEvElopmEnt 2 ❘ the gazette ❘ Sunday, January 19, 2014

economic development in the 21st century

Economic efforts have long roots City has weathered many booms, busts

by WAyNE HEILMAN wayneh@gazette.com —

The history of Colorado Springs and economic development have been intertwined since the founding of the city by railroad baron and Civil War hero Gen. William Jackson Palmer in 1871.

Palmer founded the city as a stop for his Denver Rio Grande Railway and a summer resort at the junction of Fountain and Monument creeks for his wealthy East Coast friends. After seeing the area for the first time two years earlier, Palmer and his friends acquired 10,000 acres in the area that would become Colorado Springs.

They wanted to attract affluent residents and visitors to an inviting place with streets lined with cottonwood trees transplanted from the banks of the Arkansas River.

The city, marketed as “Little London,” attracted thousands of tourists annually and grew to more than 21,000 residents by 1900, boosted by the discovery of gold in Cripple Creek in 1890 and an influx of tuberculosis patients to the area’s many sanatoriums.

Palmer died in 1909, but less than a decade later mining millionaire Spencer Penrose built the opulent Broadmoor hotel.

The beginning of World War II brought a new type of economic engine to Colorado Springs that would become the foundation of its economy.

After the Japanese attack on Pearl Harbor, the city bought land south of its borders and donated it to the War Department for construction of what would become Fort Carson. A few months later, the Army opened a small air base near the city’s airport to train pilots and crews for photo reconnaissance, later for heavy bomber combat pilots and eventually as fighter pilots.

After the war ended, both bases were deactivated, but didn’t stay that way for long.

The Air Force opened what would later become the North American Aerospace Defense Command (NORAD) in 1951

CoUrteSy PHoto

Undated photo of Hewlett-Packard’s first building in Colorado Springs at 4637 Winters Drive. A large-scale attempt to attract industry to the Springs began in the 1950s. at a base near Memorial Hospital that later became the Olympic Training Center, reopening Peterson Field at the same time. Fort Carson reopened in 1954, the same year a group of civic boosters persuaded a commission that included aviation giant Charles Lindbergh to build the Air Force Academy just north of Colorado Springs.

The first large-scale attempt to attract industry began in the 1950s, when local business leaders set up the Colorado Springs Industrial Foundation to sell low-cost land on Garden of the Gods Road to companies that would open plants there. They landed Kaman Nuclear in 1959 after the company couldn’t find affordable buildings in Albuquerque.

Test-and-measurement giant Hewlett-Packard followed in the early 1960s, triggering the opening of University of Colorado at Colorado Springs in 1965.

By the early 1970s, the local economy was booming and Colorado Springs was one of the nation’s fastest-growing cities. Concerned about the local economy’s heavy reliance on the military, a group of three developers — Steve

Schuck, Bruce Shepard and David Sunderland — created a blueprint in 1971 to attract more technology firms and other high-paying employers to the Springs area. That blueprint said the military generated well over 50 percent of local payroll, which constituted “a major economic risk” for the city.

Two years later, the Colorado Springs City Council imposed a moratorium on new natural gas connections, halting local growth and plunging the local economy into a deep downturn that lasted into the mid-1970s. The new economic development initiative, called the Quality Economic Development program, got its first major win in 1974, when Honeywell announced plans for a computer chip plant in southern Colorado Springs that would be sold a decade later to Atmel and still operates today.

During the next few years, NCR, Litton Industries, Schlage Lock and Digital Equipment announced plans to open plants in the Springs.

Digital would eventually grow to become the area’s largest private employer for a time on a campus that included buildings totaling more than 1 mil-

lion square feet — just smaller than The Citadel mall.

In 1977, local boosters scored perhaps their biggest coup, bringing the headquarters and an athlete training center of the U.S. Olympic Committee to the former Ent Air Force Base.

By the late 1970s, the economic development effort had landed four semiconductor plants — Honeywell, NCR, Inmos and Mostek — prompting boosters to launch an effort to brand the city as the home to “Silicon Mountain.” The economic development group, part of the local Chamber of Commerce at the time, in the early 1980s also attracted two computer disk drive manufacturers; major aerospace operations for Ford, Texas Instruments and TRW; and a telephone switchboard plant that would later be acquired

by IBM. The last of four local military bases, which is now called Schriever Air Force Base, opened in 1983 to house satellite operations for the Air Force and a mission control room for military space flights. Though the mission control room was never built, the base now also houses missile defense operations.

Layoffs hit the Springs with a vengeance in the mid-1980s, but a housing and commercial construction boom continued and eventually resulted in a glut of unsold speculative homes, land, apartments, shopping centers and office buildings that made the Springs what the national media called the nation’s “foreclosure capital.” Swamped with defaulted loans on real estate, all but one local savings and loan association and four banks failed and thousands of homes, empty building lots and other real estate ended up with a government agency created to clean up the mess.

Local economic development officials turned to nonprofits and religious organizations, including the national headquarters of Christian ministry Focus on the Family and the Christian and Missionary Alliance denomination, to put local residents back to work in the late 1980s and early 1990s.

The glut of real estate would prove attractive to Apple Computer and MCI Telecommunications, which announced plans a week apart in 1991 to expand into a pair of shuttered manufacturing plants and eventually employ thousands. The local economy turned from bust to boom almost immediately and another string of economic development wins followed during the next few years with the arrival of Rockwell Semiconductor, Oracle and computer chip giant Intel. By the end of 2000, local manufacturing employment peaked at nearly 27,000.

The technology industry meltdown that began in late 2000 hit Colorado Springs hard as WorldCom, which acquired MCI, laid off thousands from its local software hub and dozens of other manufacturers such as Agilent Technologies and Quantum shifted production to less expensive overseas locations.

The area lost more than half of its manufacturing jobs during the next nine years, and few returned to the area even when the nation’s manufacturing sector began expanding again.

The area’s economy began to recover by 2004 as the Colorado Springs Economic Development Corp. attracted a series of call centers and data centers to the area, providing thousands of needed jobs but at far lower wages than the manufacturers that they replaced.

As a result, recovery from the 2001-03 recession was slow — the area wouldn’t recover the jobs lost in that downturn for five years and local incomes failed to keep up with inflation or the rest of the nation even as the local economy improved.

Another recession hit as the nation’s overheated housing market tanked amid a financial crisis in 2008, eliminating more than 20,000 jobs amid widespread layoffs and plant closings, including Intel shutting down its chip manufacturing plant and shifting the work to Taiwan. The area’s economy has yet to fully recover from that downturn, with the unemployment rate stuck above 8 percent even as the rest of the state recaptured the jobs lost in the most recent recession by early last year.

As part of a strategy to refocus the area’s economic development efforts, the Greater Colorado Springs Chamber of Commerce and the Colorado Springs Regional Economic Development Corp., which had once been part of the same organization, merged recently to form the Colorado Springs Regional Business Alliance.

In an effort to jump-start local economic growth, a coalition of groups led by the city of Colorado Springs sought and received approval in December for $120 million in state sales tax rebates to develop four new projects, together called the City for Champions. The projects would be built over the next few years and are designed to attract out-of-state tourists. The projects constitute an Olympic museum, a multipurpose stadium and arena complex, a sports medicine complex at the University of Colorado at Colorado Springs and a new visitors center for the Air Force Academy.

Champions has potential to change city’s reputation, some say

by Rob laRimeR rob.larimer@gazette.com —

The proposed City for Champions projects have the potential to change Colorado Springs’ reputation and how residents view their city, some experts say.

“Colorado Springs can be a tough place,” said Jariah Walker, a 36-year-old Springs resident and co-owner of Walker Asset Management Realty.

“We’ve always been that ‘almost city,’ We think we’re not as good as Denver. We think we’re not going anywhere.

We’ve just needed a win for a long time.”

Walker said that win came last month when the Colorado Economic Development Commission awarded an estimated $120.5 million to help finance the City for Champions projects.

They include four tourismrelated projects: a 10,000-seat stadium and 3,000-seat indoor sports center, an Olympic museum, a new Air Force Academy visitors center and a sports medicine and performance center at the University of Colorado at Colorado Springs.

Before any City for Champions project can proceed, supporters must find sources of financing to complement state funds. And money awarded by the state comes with some stipulations. Among them, the projects must be started within five years and completed within a decade.

Walker was among several

JERILEE BENNETT, THE GAZETTE

Jariah Walker, co-owner of Walker Asset Management Realty, is a young professional who supports the City for Champions projects and believes they can benefit the city. residents who traveled to Denver last month to speak in support of the proposal before the commission.

“In the back of my head, I was thinking ‘Are they going to believe us? Do they think that we believe in ourselves?

We’ve just got to stay positive and look positive to them,” Walker said. “Sometimes it seems like we can’t work together, and when we do have a success, we beat ourselves up over it.”

He said he was preparing for the commission to say no.

“But when they gave us the full amount of funding, I knew anything was possible,” he said. “I know our identity was going to change.”

At that moment, when the Colorado Springs crowd celebrated together, Walker said

something remarkable happened.

“We had worked together to accomplish something incredible,” he said. “We had rallied together, and now we were all on the same page, and to me that’s just as important as more jobs and more visitors.

It was a huge turning point.”

It’s the kind of turning point Oklahoma City sought in the early 1990s when it embarked on a $350 million capital improvement project called MAPS (Metropolitan Area Projects), which added sporting venues and renovated the city’s downtown area.

Before that, Oklahoma City had a dying economy that was bleeding younger workers.

Former Oklahoma City Mayor Ron Norick, who helped propose the MAPS plan, spoke

about it in a recent video celebrating the project’s 20-year anniversary.

“Any time you’d travel, people would ask where you’re from, and I’d get this blank stare,” he said. “They just had no concept to what Oklahoma was. It’s not the bricks and mortar that MAPS did. It’s the change of attitude of our community. Our kids and our grandkids are going to want to stay here. They’re going to find employment and raise their families here.”

Now, the city is celebrated as a hub for young professionals.

During 2013, American City Business Journals ranked it No. 7 on its “Best Places for Young Adults” list. It came in at No. 7 on Apartment.com’s “Best Cities for Recent College Gratuates” list.

The Atlantic named it as one of the 15 most popular cities for millennials.

In Colorado Springs, the City for Champions proposal seems to have caught the attention of more than a few young professionals.

When the plan was introduced, the Colorado Springs Rising Professionals, a group of young professionals offering opportunities for young, career-minded individuals, polled 100 of its members about support for the proposal.

Ron Stauffer, chairman of the group’s marketing committee, said 64 percent responded saying they support-

ed the plan.

“Response has been a little bit mixed, but for the most part there’s been a lot of buzz about the possibilities surrounding City for Champions,” said former Rising Professionals president Shawn Gullixson. “Mostly, everyone’s happy that something positive is happening in our community.”

Gullixson said there’s been a lot of talk, too, about how the project will open doors for young entrepreneurs and small businesses.

Gullixson, like Walker, is hoping the message about a hipper, happier Colorado Springs spreads around the country to grow the local economy.

The city’s social and political reputation differs across the country.

David White, who left his job as chief business development officer for the Colorado Springs Regional Business Alliance last month, said the city’s conservative reputation often comes up when he talks to a business about moving to Colorado Springs.

“I get a lot of pushback from places like the Silicon Valley or New York,” he said. “But there have been plenty of other places in California that have been concerned that Colorado is becoming too liberal.

They say you’re becoming too much like California.”

White said large companies tend to care more about things like the conservative nature

of the city and a lack of diversity. Small and medium-sized companies are just concerned about the bottom line.

That resonates at the state level, too.

Ken Lund, executive director of the Colorado Office of Economic Development and International Trade, believes a city’s social reputation matters little when appealing to large companies.

“By and large, corporate prospects think very little about what a city’s social reputation is, whether it’s conservative or whether they support homosexual relationships,” he said.

“All those things are a distant secondary to what bearing the city can have on the balance sheet. ‘Is this a place where we can make money?’ is what they want to know. They have responsibilities to shareholders.”

Lund said business owners want to know about the regulatory environment for businesses and what type of skills the local workforce has to offer.

Lund said that Colorado lawmakers recently approached him with questions about whether the state’s legalization of recreational marijuana would have bearing on economic development efforts.

“I told them that I just don’t think so,” he said. “I honestly don’t see marijuana being a factor. It comes down to talent and talent acquisition in many cases.”

Sunday, January 19, 2014 ❘ the gazette ❘ Economic DEvElopmEnt 3

economic development in the 21st century

City works to be business friendly Support not just in form of incentives

By RoB LaRimeR rob.larimer@gazette.com —

There are several factors that can qualify a city as “business friendly.”

Often, a city with low tax rates is considered business friendly. Sometimes, it’s tax incentives for relocating companies and the promise of expedited business licensing.

In some cases, it’s cold, hard cash handouts to relocating businesses. And in still other instances, it’s the old-fashioned welcome wagon and red-carpet treatment.

While Colorado Springs does offer some tax incentives to new, relocating or expanding businesses, it has focused on the latter.

Such was the case with FuseSport, an Australian sports software company that announced plans in May to move its international headquarters to Colorado Springs.

The company had 11 employees at the time of the announcement and expects to add 100 within four years.

“We need future generations of younger people like you to make sure our city is successful for the long term,” Colorado Springs Mayor Steve Bach said to Chris Clark, the company’s CEO, during a news conference announcing the move.

The friendly welcome is indicative of the city’s zeal to attract young entrepreneurs, and especially sports businesses.

The city’s burgeoning sports industry will likely get a boost if the City for Champions projects are realized, but Colorado Springs already has a strong foundation to support a growing sports economy.

The U.S. Olympic Committee calls Colorado Springs home along with two dozen Olympic national governing bodies.

Colorado Springs also boasts great outdoor opportunities, such as a parks and trail system and national forest land in its backyard.

Those were factors in Borealis Fat Bike’s decision to start its operation in Colorado Springs in September.

Borealis, too, was greeted with open arms. “I went to the city and the business alliance and said I want to do this and this, and they said.

‘OK, we’ll do this and that,’ and I couldn’t believe it, they did everything they said they were going to,” said Borealis co-owner Steve Kaczmarek, who also teaches an entrepreneurial studies course at Colorado College.

Kaczmarek said the Colorado Springs Regional Business Alliance invited him to a meeting in which economic development and government officials assured him they wanted to do anything they could to help him succeed.

“The reality is that as a startup, I was blown away with the

phoToS By CARoL LAWRENCE, ThE GAZETTE

Borealis Fat Bike techs Garreth Landry, left, and Flynn George put together a bike in the shop at 110 S. Weber St. The company is part of a growing sports industry in Colorado Springs. attention I got,” Kaczmarek said. “I mean, I only had a handful of employees and I wasn’t even making a capital investment. I always tell my entrepreneurial students to seek government help, but even I didn’t expect what I got.”

Kaczmarek said he didn’t receive any economic development incentives, but the support he received through those meetings was more than enough.

He said his company, now in its fourth month, is growing 10 times faster than he expected. It’s expected to reach the $2 million sales mark this month. “We had an indication we were going to do well,” he said.

As a college instructor, Kaczmarek said he has studied several economic development models, some that offer big incentives and some that don’t, and noted there are benefits and drawbacks to each.

“For the types of businesses Colorado Springs wants to attract, I think their model is working well,” he said.

Local economic development officials say an expeditious development review process, an environment that fosters existing businesses and not just seeks to attract them and few government regulatory burdens are key to their efforts.

Brian Yandell specializes in helping businesses relocate.

He is co-owner and senior vice president of Issaquah, Wash.based SEA CON Business Relocation Services. He said 25 years of relocation work has shown him some markets are easier to work with than others.

The biggest factors, he said, are government regulation and the speed of develop-

ment review, the process in which new businesses and construction are approved and licensed. He said business incentives, such as tax breaks, are important but are usually a secondary concern.

A streamlining of the city’s development review process is among several efforts made to improve the local business climate in the past few years.

The city’s sights are set on continuing to improve the business environment, said Bob Cope, principal analyst for the city’s economic vitality division.

One step toward that is an increased effort to use its Rapid Response Team, which was created in 1994 but used more than ever during the past three years.

The team brings together representatives from the city Planning Department, the Fire Department, the Pikes Peak Regional Building Department and Colorado Springs Utilities to expedite the review timelines for primary employers, those companies that sell 50 percent or more of their goods or services outside El Paso County.

Companies that qualify for the expedited service are given a priority status at every department stop along the development review process.

An online tracking system allows companies to follow their progress, which varies from project to project.

“There’s no standard timeline for development review.

It’s different for every company,” Cope said. “But we estimate that since we instituted the Rapid Response Team, we’ve been able to cut the development review process in half. So, we think it’s been a huge success.”

Cope said two businesses

From left, Borealis Fat Bike techs Aric Cecale, Garreth Landry and Flynn George put together Fat Bike prototypes for a bicycle trade event and show. Co-owner Steve Kaczmarek says the company is growing 10 times faster than he expected.

that benefited from the expedited review process are Agilent Technologies and The Mining Exchange hotel.

Cope said California-based Agilent Technologies benefitted in 2011 when it struck a deal with the city for a $121 million, 55,000-squarefoot expansion of its campus at 1900 Garden of the Gods Road.

The Mining Exchange benefited from the team’s help to open in May 2012.

The Mining Exchange and Agilent received economic development incentives from the city.

Colorado Springs remains

far from offering the type of incentive offered by Pueblo, which long ago enacted a halfcent city sales tax to create an economic development fund.

Agilent received about $650,000 in city incentives, including sales- and use-tax rebates on building materials used for its building expansion and for equipment bought locally. Agilent also received a 2 percent rebate on the city’s personal property tax, which is levied on machinery and equipment.

Agilent spokeswoman Suzanne Patrick said Agilent expects to invest about $121 million in capital over 15 years.

“Agilent is pleased with the assistance it has received,” she said. “The Rapid Response Team review of data center construction documents was conducted in an effective and timely manner.”

Cope said that the city offers tax rebates that are determined by how many jobs the company will create.

“The main clarification that has to be made is that we do not offer cash,” he said. “We have a limited ability to offer companies incentives. We always perform an economic impact analysis, and there’s never a situation where we sit down and write a check.”

Results of a September business-climate survey conducted by Springs-based Summit Economics shows local business workers favor fewer local government business regulations as well as governmentfunded economic development initiatives.

About 400 business workers responded to the 24-question survey. Among the questions was, “What role can local government play to improve the business climate for their organizations?”

Respondents were allowed to check off more than one response.

Nearly 40 percent said local government should streamline the permit approval process, and nearly 56 percent said they want government to fund more economic development initiatives. When it came to the local tax rate, respondents were divided; 18.6 percent said local government should cut taxes to help business, and 17.6 percent said government should increase taxes.

That’s feedback Cope is listening to.

“Our goal is to become the most business-friendly city in the state,” he said.

Economic DEvElopmEnt 4 ❘ the gazette ❘ Sunday, January 19, 2014

economic development in the 21st century

In their words

CHRISTIAN MURDOCK, THE GAZETTE

What is the most important step Colorado Springs needs to take to boost job growth?

Robin RobeRts President, Pikes Peak National Bank

“We need to focus on two areas: improve the support provided to our entrepreneurs and celebrate their successes.

This will lead to more activity in that sector. Military members leaving the service are a big opportunity. A robust transition assistance program that includes mentorship from the business community can be instrumental in their decision to open a business here or back home.”

Kim WoRth Vice president, BBVA Compass

“Colorado Springs needs to define its identity as a business community and look to attract, retain and invest in those businesses that fit within that vision. We have had various focuses from the sports industry to green business to technology.

Focusing on so many areas has left our resources stretched and has not allowed Colorado Springs to establish itself as a hub for specific industry and in turn boost job growth.”

Doug PRice CEO, Colorado Springs Convention and Visitors Bureau

“To invest our dollars and knowledge into our own community will create new, exciting projects that generate more employment opportunities and ultimately attract young professionals as well as more visitors. The City for Champions proposal is this type of investment that could ultimately mean 1,000 new jobs to the area.”

tony Fagnant CEO, Qualtek Manufacturing

“We the citizens of the community, not just elected officials, need to say we want more jobs here in Colorado Springs. We have to commit to and welcome whatever it takes to create a business-friendly environment. Colorado Springs, with its medical ties to the U.S. Olympic Training Center and academic medicine, is uniquely positioned to brand itself as a premier health care destination. There is arguably no bigger eco-

nomic driver than that. Health care ranks among the top industries in the U.S. for job creation. Not only does it generate high-paying jobs, but top-quality care is essential for any new business looking to come here.”

maRgaRet sabin CEO, Penrose-St. Francis Health Services

“We’re extremely fortunate to live, work and play in such a beautiful community. The steps we’re taking to enhance the downtown area — in addition to creating high-end mass transportation — will pay huge dividends for job growth.

It’s also imperative that we embrace sustainability in lowering our carbon footprint as we grow.”

Lance boLton President, Pikes Peak Community College

“The most economically successful American cities are also the best educated. Through education, these cities support growth and entrepreneurialism.

If we support a culture of educational excellence, it can spark a local renaissance of innovation and collaboration.

This educational investment isn’t a quick fix but is a certain fix.”

tucKeR WannamaKeR Chief marketer, Magneti Marketing

“Since I’m a marketing guy, I think in terms of target markets and what story we are telling to them. We need to focus on the type of job growth we want, then put resources into quality communications to those markets. Great storytelling is a bottom-line investment.”

JiLL tieFenthaLeR President, Colorado College

“In today’s economy, jobs are created by great ideas. Creativity has replaced physical capital and natural resources as the fuel of economic growth. The most important step that Colorado Springs needs to take to boost job growth is to create an environment where the most talented people want to come and stay.”

Jay Jesse President and CEO, Intelligent Software Solutions

“For our industry, investing in the expansion of UCCS and reversing the decline of the airport are two good areas for the city to focus on. Both will pay strong dividends but will take patience and time to recognize the benefits.”

Ryan coLe Executive director, Pikes Peak Country Attractions

“Colorado Springs needs to think long term about programs and opportunities that can create sustainable job growth and come together to produce lasting opportunities for growth in our area. Tourism employs thousands of people, and we need more ideas like City for Champions to grow the Pikes Peak region’s tourism opportunities.”

Kathy boe President and CEO, Boecore

“The biggest thing we can do as a community is attract young professionals to Colorado Springs and revitalize and replenish the baby boomer generation (workers) as they retire. Ultimately, this will create a more robust local economy and reduce unemployment overall.

Incentives for attracting companies to the community should be considered if a prudent return on investment is determined. In the short term, we need to focus on bringing another low-cost air service carrier, which will increase our tourism revenue and increase jobs while exposing future employers and employees to our great city.”

RicK DaWson President and CEO, Bal Seal Engineering

“Looking at this issue from our perspective as a manufacturer, the biggest challenge we face in increasing the number of employees we hire in Colorado Springs is workforce development.

Increasing the availability of educational opportunities for people to learn the science, technology, engineering and math skills we depend on would be our top priority.”

Sunday, January 19, 2014 ❘ the gazette ❘ Economic DEvElopmEnt 5

economic development in the 21st century q&A • Mark lautMan, author

Finding ways to succeed by rob larimer rob.larimer@gazette.com —

Mark Lautman believes the key to winning the economic development game is to not do things the old way.

Lautman is the author of the 2011 book “When the Boomers Bail: A Community Economic Survival Guide.” The premise behind the book is that communities need to actively replace their workforce as Lautman it ages.

He is a founding director of the Community Economics Lab, a private nonprofit think tank that seeks to create new approaches to economic development. He also runs a consulting business, Lautman Economic Architecture.

Question: How did you become interested in economic development?

Answer: In college after switching from economics to architecture, I remember wondering why there wasn’t more emphasis on economics in the city planning courses I was taking. It seemed to me that the economic base of a community or region had more to do with its form, function and character as the many other factors that city planners focus on.

Just before graduation, I had a conversation with a visiting professor about how some day planners and community leaders might use design thinking in their efforts to improve their economies. If you are endeavoring to design and build a physical landscape that would improve the lives of future residents, why wouldn’t you take a crack at designing the economic base that would be needed to amortize it? A decade later, I found myself in the business of designing and building new economies.

Q: What communities have you studied that have had the most economic development success?

What strategy worked for them?

A: So many fundamentals of the economic development game have changed since 2008 that you have to be careful benchmarking best practices from one place to another.

On a regional scale, what the Columbus 2020 group is doing in central Ohio is really impressive. Dubuque and Cedar Rapids, Iowa, Oklahoma City and Tacoma, Wash., are doing great work at the metro level, and Vermillion, S.D.,

Spencer, Iowa, and Newton County, Ga., are doing groundbreaking work at the small-town level.

The communities best positioned for this new economic development game seem to be those in which the community’s leaders have accepted the fact that they are in a new game, one in which you must invest more to achieve less.

The accelerating rate of change means any strategic advantage you might currently enjoy is probably temporary. Your current and future economic-base employers are going to experience increasingly shorter life cycles resulting in diminishing returns for many of our legacy job creation approaches.

This doesn’t mean you should cut investment in traditional job creation approaches. To the contrary, most places will need to double down on these programs despite knowing they aren’t going to work as well as they used to.

This new era of “transient advantage” means communities that figure out how to innovate new job creation program approaches are going to have a huge leg up.

Another important area for economic development program innovation is figuring out ways to raise the metabolic rate of entrepreneurship. There is interesting work going on in this area, but it is still a long way from being a coherent program approach that you can implement by the numbers.

The most difficult issue will be figuring out how to truly integrate local workforce and community development strategies with the community’s economic development efforts.

The bottom line is you can’t play this new game with the old mindset. To succeed now, you have to be willing to do three counterintuitive and expensive things at once: 1. Put more money, not less, into programs that don’t work as well as they used to.

2. Invest in innovating new program approaches knowing some of them will fail.

3. Get your economic development, workforce development and community development institutions working in strategic harmony.

Q: What are the most important steps toward attracting and retaining young professionals?

A: First, you need to determine how many and what kind of professionals you need to attract and retain. You have to decide what mix of economic activity you want. This will be the basis

for anticipating what kind of jobs are going to be in demand. This is no easy task, and it will end up being a wild guess, but without it, you have no practical way to spot the future gaps early enough to create a practical mission for your education and workforce development institutions.

After that, you will want to begin developing profiles for the workers you will need to attract and acquiring the data, analytics and insights needed to inform local community development and policy decisions. Understanding what community factors are driving away the talent you need will ultimately help you prioritize your community development agenda.

Q: What are some of the biggest mistakes you’ve seen communities make in their quest to replace their aging workforce?

A: The first and biggest mistake communities make is failing to acknowledge that they have a problem. They fail to recognize it as the economic death threat that it is. Even then, too many communities assume there is nothing they can really do about it.

More communities are driving off the talent they need now, but the science surrounding the issue has been slow to develop, so it is difficult to get beyond anecdotal assessments problem. In the near term, trying to figure out who’s coming, leaving, staying — and why — is one of the most exciting areas of economic development now.

Q: What’s your best advice for Colorado Springs?

A: Colorado Springs is leading the nation right now on diagnosing the impact of a rapidly aging population on a community and its future economic development.

While still far from being integrated into the community’s economic and workforce development thinking, the work being done by your Innovations in Aging group (a local collaborative that seeks to address age-related issues) puts Colorado Springs ahead of most other places in the country.

Next steps should be: 1. Design the specific economy the city wants to have in 10 years.

2. Forecast age-related workforce gaps and address them.

3. Develop a formal talent development, attraction and retention program — staffed by an economic demographer and a human resources professional who can become a local brain trust to help local institutions and employers refine their strategies.

ALLIANCE from page 1 —

White said the business alliance learned something interesting recently through conducting exit interviews with companies that had decided to move out of Colorado Springs.

Several companies said they didn’t feel support from the business community.

“One of the biggest reasons companies have left here is because they don’t feel the love,” White said. “We’re here now saying we want to make sure they feel the love.”

Ian Askill started his company, Aspire Biotech, in Colorado Springs in 2001 and has watched the city work to attract other biotech companies to the region.

His employees perform research and development work on medical devices, with annual salaries that can exceed $100,000.

“From a business perspective, it’s hard to build a successful company if you don’t have strong clusters,” Askill said. “If the city doesn’t have a critical mass, you don’t have the trained personnel that can move between fields, and right now we’re below critical mass, which is sad.”

Askill had worked in Chicago and New Jersey before deciding to start his company in Colorado Springs.

“I chose Colorado Springs because it was a place where I wanted to live,” he said.

“Despite the fact that it’s very hard to build here because it’s so small. It’s easy to find people in Chicago and New Jersey, but it’s hard here. If there are talented people you want to hire, you probably know the people they work for. Then you feel like you’re poaching from your friends.”

Biotech has long been on the list of Colorado Springs’ key industries.

The newest list reflects some additions.

White said the list was born of discussions initiated by Operation 6035, a 2009 economic development survey paid for by a mix of public and private sources.

The study identified three new key industries for Colorado Springs: clean technology, data storage and the sports economy.

Clean technology includes recycling, renewable energy, solar power and biomass.

The prevalence of clean tech is important to other industries, and companies might move only to a market that has built its reliance on “green” practices, such as renewable energy or recycling.

Colorado Springs was identified as a potential hub for data storage centers because of its inexpensive power rates and the rarity of natural disasters such as hurricanes and earthquakes, which makes data more secure.

The city celebrated two major data center announcements in recent years.

KEY INDUSTRIES

The Colorado Springs Regional Business Alliance has identified the following as key industries for the community: • Aerospace and defense • Clean technology • Customer support • Health care • Higher education • Information technology and data storage • Local business • Manufacturing • Medical innovation and technology • Nonprofit • Sports economy

Last year, Wal-Mart opened its $100 million, 210,000-square-foot corporate data center.

Meanwhile, T5 announced plans this year for an $800 million data center campus.

The sports economy seemed like a natural fit because the United States Olympic Center is in Colorado Springs, and because of that, the national governing bodies of many Olympic sports call the city home, business alliance officials said.

Chris Vadala, chief operating officer of USA Volleyball, said the organization has benefited from the business alliance’s key industries program in several ways.

He said that when USA Volleyball was looking for building space, the business alliance assisted the group.

“They also gave us some help with legislation in Washington, D.C.,” Vadala said. “We have lots of sports partners in town, but it’s nice to know we have a business partner, too.”

Last year, USA Volleyball bought the building the business alliance helped it find, and the national governing bodies for table tennis, fencing and archery moved in as temporary tenants.

“We, for one, made the purchase,” Vadala said. “So, I’d say so we’ve definitely made a long-term commitment.”

Tom Duening, director of the University of Colorado at Colorado Springs Center for Entrepreneurship and El Pomar chairman of business and entrepreneurship, said building clusters through key industries is important, but sometimes clusters happen aside from a communities’ best strategic efforts.

“Clusters just develop, and then you have to be ready to leverage them,” he said.

But Duening said it’s important for the business alliance to help identify clusters and help the companies in the clusters connect.

“I think the seeds are being laid in this community for something big to happen. It’s (the business community) come a long way in the four years that I’ve been here,” he said.

“We’ve just got to keep plugging away and lo and behold something will happen.”

Economic DEvElopmEnt 6 ❘ the gazette ❘ Sunday, January 19, 2014

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