Colorado’s high-tech industry, which helped fuel the state’s rapid growth in the late 1990s, is bubbling back to life. Recent statistics give hope that employment levels will rally, too.
High-tech exports from Colorado totaled $4.1 billion in 2004 – up $500 million, or 14 percent, from $3.6 billion in 2003, according to a new analysis by AeA, a trade association. However, the number of high-tech workers in Colorado, coveted because of their average $75,000-a-year salaries, continues to drop, according to the study.
The mixed report may sound like the proverbial good news-bad news dilemma, but several economists are confident job numbers will be the next to rebound.
“We’re finally gaining the kind of momentum we’d normally get in an economic expansion,” said Carl Tannenbaum, chief economist at LaSalle Bank in Chicago, who recently visited Denver-area businesses. “If the 1990s are any lesson or guide, we should be able to pick up momentum from here.”
More than 60 percent of Colorado’s exports typically come from the high-tech industry. When the economy peaked in 2000, Colorado exports totalled $6.6 billion. That amount dipped over the next two years, leveling off at $5.5 billion in 2002. But in 2004, that number jumped back to nearly $6.7 billion. Of that, high-tech exports totalled $4.1 billion.
Colorado still has the highest concentration of tech workers in the country, but that number fell from 176,900 in 2002 to 162,200 in 2003, the most recent year data was available, AeA says.
The numbers show the industry has been successful doing what most businesses have been forced to do in recent years: do more with less, said Patty Silverstein, president of Littleton’s Research Development Partners.
“It is good news,” she said of the mixed report. “They have learned through productivity advancements to do more with less, but eventually, if they’re performing more solidly, that will translate into some employment gains.” She believes once businesses are confident that positive trends are continuing, they’ll begin to beef up staffing. But no one is confident it will get back to the levels of 2000, when most companies were gung ho to expand.
Much of Colorado’s export business is going to build the infrastructure of call centers and other high-tech businesses in India and China, Tannenbaum says. That type of business wouldn’t seem to boost local job numbers, but Tannenbaum says offshoring and trade is much more of a two-way street than people think. Many of the people earning higher salaries overseas are consumers of American products. And if export numbers continue to grow, job numbers here will follow as companies expand.
And then there’s the intangibles he witnessed on his Denver outing: “Business people in the area are really quite upbeat,” he said. “Very often that kind of psychology can be self-fulfilling.”
