While economic growth slowed throughout Colorado in 2019, according to the Leeds School of Business’ 55th annual Colorado Business Economic Outlook 2020 released on Monday, the state, and Boulder County, in particular, are expected to continue to outperform much of the rest of the country.
“We’ve got broad-based growth and then there are very strong subsector pieces,” said Richard Wobbekind, the executive director of the business research division for the Leeds School of Business. “So there aren’t a lot of warning signs in Boulder County of some sort of impending economic doom.”
Between September 2018 and 2019, data from the Bureau of Labor Statistics shows employment in Boulder County increased 3.3%, creating an additional 6,400 jobs and driving the Boulder County unemployment rate down to 2% compared to state unemployment of 2.2% and a national rate of 3.3%.
Though the Colorado Business Economic Outlook expects job growth throughout the state to fall from 1.9% growth in 2019 to 1.4% in 2020, Boulder County is again expected to outpace the state due to its strong base of technological and scientific businesses, as well as its robust tourism and outdoor recreation industries.
The only industry expected to lose jobs this year is the information sector, which the report estimated would lose 500 jobs statewide. Meanwhile Boulder County’s other key industries, including aerospace, biotech, cleantech, natural and organic products, outdoor recreation, tourism, and professional, scientific and technical services are all expected to grow, with professional, scientific and technical services projected to be the strongest industry in 2020 with 3.4% percent growth.
In large part, the report suggests Boulder County’s continued growth is due to the concentration of educated employees emanating from the University of Colorado Boulder while businesses in other areas struggle to find qualified applicants.
“Having an intellectual high-tech base with physicists, chemists, and aerospace scientists is very helpful in terms of being able to grow in those types of industries because they’re not on every street corner in the county,” said Brian Lewandowski, associate director of the business research division at the Leeds School of Business. “Even in manufacturing, which nationally most people think manufacturing employment is going to fall, we’re seeing manufacturing employment rising because of food and beverages and aerospace manufacturing, both of which are very positive for the Boulder area.”
The one downside to relying so heavily on tech-based businesses, Wobbekind said, is that it makes Boulder susceptible to a recession as more jobs are being replaced with artificial intelligence or automation. A 2019 Brookings Institution study reported Boulder was one of the more susceptible cities to artificial intelligence disruption in the county.
Wobbekind compared the potential disruption to the difficulty Colorado had in rebounding from the tech bubble bursting in the early 2000s, which took longer to recover from the Great Recession.
However, Clif Harald, the executive director of the Boulder Economic Council, noted Boulder has diversified its economy enough in recent years to withstand such a recession.
“If we were to see softening in one industry, say for example in IT, the strengths in aerospace, bioscience, energy, natural foods, outdoor recreation, and tourism would hopefully keep things moving along for our economy,” he said.
Wobbekind also noted the high concentration of start-ups in Boulder County and its history of innovative companies suggests that should one of Boulder’s key industries take a hit, the highly educated entrepreneurs in the area would find a way to take advantage of the opportunity.
According to data from CB Insights, $484 million in venture capital funding was received by Boulder County companies in the first three quarters of 2019, representing 48% of the state total.
“We have a very highly educated workforce within this region and a lot of these individuals are innovators and entrepreneurs,” Wobbekind said. “That has fueled a lot of Boulder’s economy over the last couple of decades so I’m optimistic Boulder will find a way to reintroduce itself.”