Colorado’s inability to attract and retain large corporations is harming the state’s economic future, warned Kenneth Tuchman, chief executive and chairman of TeleTech Holdings.
“Colorado has a significant economic-development issue,” Tuchman said. “We are seeing a net loss of corporate headquarters at an alarming rate.”
Tuchman raised the issue Wednesday morning at the 2006 Rocky Mountain Economic Summit, a panel discussion sponsored by Microsoft and Accenture at the Donald R. Seawell Grand Ballroom in Denver.
Colorado is home to 10 Fortune 500 companies, two more than it had in 2004. During the same period, however, the state lost several headquarters companies.
Storage Technology Corp., DexMedia and Tom Brown Inc. disappeared because of mergers. Others – including printer Cenveo and Titanium Metals Corp. – just picked up and left.
At the same time, the state has failed to land enough big names to replace those leaving.
“We know mountains and the quality of life are not enough,” said Joe Blake, president and CEO of the Denver Metro Chamber of Commerce. “It is a difficult issue to deal with because of the state budget.”
As much as 70 percent of the state budget is automatically earmarked for items such as education and Medicaid, leaving little for economic development.
“Texas has hundreds of millions of dollars available for incentives,” Blake said.
Tuchman urged the state to target two or three companies and go after them in a focused and deliberate way.
“Large corporations want incentives,” Tuchman said. “The state has to say we will make it worth your while.”
Tuchman moved his fledgling customer-service outsourcing firm to Colorado from California in 1993.
Economic-development assistance in finding real estate and a loan were crucial to the firm, which has a market capitalization of $873 million and employs 40,000 worldwide.
Blake said business and government leaders are aware of the problem.
Engineering firm CH2M Hill donated to the Metro Denver Economic Development Corp. $1.7 million of the $355 million bonus it earned for cleaning up the former Rocky Flats weapons plant ahead of schedule.
Persuading the wider public to devote tax dollars to economic development may prove a tougher sell, panelists said.
Colorado dodged a bullet last week when the state’s largest public company, First Data Corp., said it and its Western Union subsidiary would stay put in Greenwood Village.
“We did our part. We stayed,” said Kevin Grieve, president of First Data Prepaid Services.
Given that most job growth comes from small firms, Grieve said, Colorado should focus on maintaining its entrepreneurial culture.
Robert McDowell, vice president for Information Worker Business Value at Microsoft, called state competition over incentives a “zero-sum game.” A better approach, he said, is to “make it friendlier for business.”
Staff writer Aldo Svaldi can be reached at 303-820-1410 or asvaldi@denverpost.com.
