Forbes ranks Colorado 4th best place to do business
Forbes.com recently ranked Colorado the fourth best state in which to do business, due largely to the quality of its work force, steady growth potential and a favorable economy.
Colorado moved up from sixth place in the 2006 ranking. Using data from Moody’s Economy.com and eight other sources, Forbes ranked states based on six factors: business costs; labor; regulatory environment; economic climate; growth prospects; and quality of life.
Colorado ranked first in labor for having numerous higher-education degree holders (32.7 percent of the population in the 2000 census), high migration (Colorado took in 644,000 people from other states between 1995 and 2000) and more people expected to arrive.
Colorado was second for growth prospects. A favorable ratio of business openings to closing, projected job growth and a hefty amount of venture capital investments helped the state place second, along with per capita income averaging $42,377 last year, according to the Bureau of Economic Analysis. Colorado experienced a 2.8 percent boost in gross state production in the past five years to reach $203 billion in 2009.
The state placed fifth in economic climate. Big companies such as Coors and Quiznos are headquartered here, United has an airline hub at Denver International Airport, and numerous other large companies operate in the state. The unemployment rate hasn’t surpassed 7.8 percent during the entire economic downturn.
Colorado didn’t perform as well in the quality of life and regulatory environment categories, placing 15th and 17th, respectively. The quality of life ranking is based on schools, health, crime, cost of living and the poverty rate. The Denver-Boulder-Greeley consumer price index, a cost of living indicator, increased 17.7 points to 190.9 between 2000 and 2005, according to the Colorado Department of Labor and Employment. The state’s poverty rate was 13 percent in 2007, according to the Kaiser Family Foundation.
As for Colorado’s regulatory environment, incentives, transportation opportunities, tort climate and bond ratings, the state has train tracks, some major highways and airports in its favor, and some business incentives, including a tax credit created this year that offers a break to people starting a new business in Colorado.
However, 2009 also brought new regulations, such as an update to Colorado Oil and Gas Conservation Commission rules and making food-safety guidelines universal in the state.
It’s regulations, along with taxes in the state, make Grand Junction Area Chamber of Commerce Executive Director Diane Schwenke worry Colorado may not be as business-friendly as it could be. It didn’t surprise her to find out Colorado’s lowest ranking on the Forbes list came in the category of business costs, where the state placed 33rd. The business costs ranking is based on how much it costs businesses to funnel energy into buildings, pay workers and pay taxes in a particular state.
“The regulatory environment and business costs, those are hard for a community or city to impact. That’s state driven,” Schwenke said. “We need to focus on the labor and maybe on the growth prospects.”
While taxes, regulation and growth are to some extent similar across the state, Grand Junction is faring worse than the state with an unemployment rate that has extended as high as 9.1 percent this year, a poverty rate nearing 15 percent in 2007, and fewer opportunities to work for major companies or attract headquarters for large outfits.
Grand Junction does have a lower cost of living than some Front Range cities, but per capita income is close to the state average, and the area has enjoyed a good economic climate in recent years, although that climate has faced trouble this year.
Schwenke said Grand Junction’s best bet for creating a business-friendly climate is to focus on employees more than employers. The theory is if Grand Junction builds a welcoming community, the employers and employees will come.
“Instead of chasing companies, we have to chase an educated, creative work force,” by continuing to work on city infrastructure, attractions and aesthetics, she said. “I think we’ve got a good start.”
Another place Grand Junction lags behind the state average is in the percentage of residents with higher-education degrees. For example, 34.5 percent of Denver residents 25 years or older have a bachelor’s degree or higher, compared to 26.2 percent of people 25 and up living in Grand Junction, according to City-Data.com.
Mesa State College and Western Colorado Community College, among other institutions, have worked to remedy that in recent years with the introduction of new and more certificates, programs and degree areas requested by local employers.