Quick links: Colorado’s 2 proposed Tech Hubs | Denver-area inflation up 5.4% | Colorado home sales drop | Comcast picks the Springs
With $500 million in federal funds up for grabs, a group of Colorado industry executives, academics and state officials convened earlier this year to support an effort to make Colorado an official Tech Hub, with a capital T.
Now, they’re waiting to hear if the state is selected as one of the 20 hubs. “Maybe tomorrow,” suggested Wendy Lea, in an interview Thursday. Lea, an entrepreneur who also led Energize Colorado in the pandemic, is co-leading TechHubNow!, a Colorado coalition formed after the CHIPS and Science Act passed to strategically invest in America-based technology innovation and a local workforce.
Likely though, she said, the U.S. Department of Commerce will announce it next week. And Lea, along with Gov. Jared Polis and a bipartisan group of lawmakers who penned a letter to Commerce Secretary Gina Raimondo this week, believes Colorado has a good chance at snagging at least one of the 20 spots, largely because of where we are.
“Likely, you won’t see a designation going to Silicon Valley or Boston because they’re already along their way,” Lea said. “This is about the middle of the country. The rise of the rest.”
Lea was referring to AOL founder Steve Case’s motto that tech innovation should be spread all over America if the nation wants to remain competitive globally. And that’s what the new federal program is reaching for, too. Officially called the Regional Technology and Innovation Hubs, the idea is to invest a little bit of money into the rest of America by encouraging locals to support the building up of 10 advanced industries, including advanced energy, artificial intelligence and next-generation manufacturing.
But there’s not that much money involved. Those honored as a Tech Hub will receive up to $500,000 each and then be eligible to apply for implementation grants of $50 million to $75 million. So far, only $500 million of the program’s $10 billion price tag has been appropriated by Congress.
According to the Economic Development Administration, the Department of Commerce bureau overseeing the program, there were 192 applications for the Tech Hub designation from all but two states. Another 55 asked only for grants. Requests totaled $75 million. There’s only about $15 million offered in the first round.
It’s challenging to build a global ecosystem on that amount, Lea acknowledged. But that’s not the point.
“With this first designation, there’s no money,” she said. “But there’s cachet to recruit companies here. There’s cachet to retain companies here. There’s the cachet to raise money to support the ecosystem. It’s really a marketing play across geography and across technologies, though mainly advanced technologies.”
With nearly every state plus three territories submitting some sort of bid, the program is doing what Mark Muro had hoped. He’s a senior fellow at the Brookings Institution, a nonprofit think tank focused on researching government policy, who coauthored a 2019 report making a case for why tech innovation should be spread across America.
“We certainly view this as a superior way to unleash economic growth than top-down program development. It’s an exciting moment for regions within a state,” Muro said. “And even if a Colorado consortia does not win, they likely have assembled a compelling strategy that will stand them in good stead and give them a plan going forward and maybe even be a target for funding from other sources, whether it’s philanthropy or the private sector.”
The state’s Office of Economic Development and International Trade supported two applications that came from the state TechHubNow! initiative. The group organized a pitch session of sorts among the 10 possible industries. Two rose to the top: advanced energy and quantum.
Colorado backs quantum and cleantech
While Colorado could have probably applied in all 10 tech categories, the decision to narrow it to two was strategic, based on the competition’s requirements, she said. At least three hubs must be picked in each of six U.S regions. There must be a benefit to underserved communities or rural regions.
Quantum, which already has a significant research hub and growing commercial ecosystem in Colorado, is competing in a 10-state region that excludes Illinois and Tennessee, where other quantum hubs exist. The local industry also is in the phase of commercializing the tech and you don’t need Ph.D.’s for that job, but you need a diverse workforce.
Maybell Quantum in Denver, for example, builds Kelvin cryogenic systems, essentially very cold fridges, that are needed for quantum computing. Recent hires include folks with music and philosophy degrees, said Corban Tillemann-Dick, Maybell’s CEO.
“The important thing to keep in mind is that even though Colorado is the leading hub for quantum today, we are at the very beginning of this quantum journey,” Tillemann-Dick said. “If you go back to the 1950s and 1960s, California was not leading the silicon revolution at that point. It was Boston. Boston was way out in front. But California managed to put together the pieces of workforce development, user facilities and fundamental research with a lot of support from the federal government and the state government that allowed that state to define the next 50 years or technology. We are at a similar inflection point in Colorado with where quantum is right now.”
While the state officially supports two applications, there are others that were led by local industry or a region, including one based in Grand Junction to address cybersecurity and managing the Colorado River.
“The Tech Hubs program is a once-in-a-generation opportunity to accelerate the innovation already underway in Colorado, positioning our state as a global leader advancing the technologies of the future,” said Eve Lieberman, OEDIT’s executive director, in a statement to The Colorado Sun.
Related:
➔ Colorado added 2,700 clean energy jobs last year. That’s according to a new report from a national consortium that includes the Colorado Solar and Storage Association. The state ranked seventh in the nation for renewable energy jobs, at 18,022, or 28.3% of the state’s clean energy workforce of 63,780 workers. Clean vehicle jobs, however, had the fastest growing workforce in the sector with a growth rate of 13.7%. Comparably, jobs in the gas/diesel vehicles sector grew 3.7% in 2022. >> Read report
➔ Two Colorado schools get federal grants. In an effort to promote local innovation through competitiveness, the U.S. Economic Development Administration awarded $16.5 million in grants to 23 colleges and universities to help strengthen their regional economy. That included $150,000 to Colorado State University in Fort Collins and $99,720 for Metropolitan State University of Denver. >> News release
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Denver’s annual inflation increases 5.4%
When the price of gasoline in Colorado shot up after Labor Day, the impact reversed the slowdown of inflation in the state. September inflation in the Denver area grew 5.4% from a year ago, which was the highest since March and the first time the inflation rate grew since the spring of 2022, according to the U.S. Bureau of Labor Statistics.
Average gas prices have fallen about 30 cents per gallon in the past month. AAA’s gas tracker had a gallon of regular gas in Colorado at $3.73 on Friday. Part of the decline was the seasonal switch to a winter blend, but it’s also lower oil prices, AAA said.
Eating out also costs more, up 7.8% in a year. Cole Anderson, a research analyst with Greenwood Village-based right-leaning think tank Common Sense Institute, said Denverites have felt the pinch at restaurants, with prices up 24% between November and June. Then again, he added, locals tend to eat out more than folks in the U.S. He said BLS data “shows that a significant number of Denverites buy food ‘away from home’ (at) 45.9% compared to 37.8% nationally.”
“While we do have record restaurant price increases, this doesn’t mean that we have the most expensive restaurants,” he said in an email. “Given that incomes in Denver are relatively higher than the national average, and Denverites enjoy eating out, I would venture to say that spending habits when it comes to restaurant dining have probably not been impacted much yet.”
But gas and restaurant prices weren’t solely to blame for Denver’s growing inflation last month. Minus food and energy, the region’s inflation rate was still 5.4%. Julie Percival, a BLS regional economist who tracks Colorado data, said it’s due to higher housing prices. Whether food or energy prices go up or down, housing is still a much larger chunk of the household budget so when that goes up, it has more impact.
And housing costs are taking an even larger bite for Denver-area consumer budgets now than in the past. In the latest BLS consumer expenditure report for Denver, housing was 36.7% of Denverite’s household income, compared to 36.2% before, she said. It’s like when gas goes up 30 cents a gallon, that has less weight than rent or the cost of owning a home goes up $100.
But, she added, “You can’t underestimate the psychological effect, especially if egg prices are $6 a dozen, like they were for a little while.”
Besides the cost of housing increasing — up 8.7% for owners and 7.9% for renters, also higher were tuition and child care, up 5.9%, and clothing, up 7.4%. The increases were offset by falling rates for lodging away from home, public transportation and used vehicles, down 6.8%.
Other working bits
➔ Comcast picks Colorado Springs for latest internet technology. Denver may get more metro attention than its southern neighbor but Colorado Springs on Thursday became Comcast’s “very first residential marketing in the world” to get the latest in cable internet tech, called DOCSIS 4.0. The technology, developed by the CableLabs in Louisville, essentially offers multigigabit symmetrical speed on existing cable lines. Why was the Springs first? “Colorado Springs is where we first launched 2 Gig speeds as a company about this time last year over new upgraded nodes running the network technology,” said spokeswoman Leslie Oliver in an email. Translation: The tech allows for speeds of 10 gigabits per second down, and 6 Gbps up, but Comcast is starting with 2 Gbps both directions for eligible customers starting Oct. 18 at a monthly cost of $115 for the top speeds. >> Story
➔ Kaiser Permanente reaches agreement with union. A three-day strike by 3,000 Colorado Kaiser health care workers (and 75,000 nationwide) has resulted in a tentative agreement between the company and SEIU Local 105 on a four-year contract. The gist, according to both parties:
- New minimum wage of $23 in Colorado by 2026. The union had asked in August for $25 minimum.
- Across the board wage increases of 21% over four years (“the highest ever for Kaiser Permanente workers,” according to the union). Kaiser had earlier on offered a 12.5% raise over four years; the union had asked for 24%.
- Increased investment in professional development, job training and in addressing the staffing crisis.
>> Story
➔ Colorado September home sales: Sales down, prices flat. Even as interest rate hikes have paused since July, it’s still difficult to buy a house — or sell one, according to the Colorado Association of Realtors in its September update. “(Buyers) willing to come off the sidelines have gained a little advantage and sellers, willing to sacrifice their 3.5% and lower interest rates,” face pricing concessions, said the update. Home sales for the Denver metro region were down 26.1% in September from a year earlier, while the median sales price was up just 1.4%, to $575,000. That’s still a pretty high price and 4,161 houses were sold. Statewide, homes sales were down 22.6% from a year ago to 5,402, while the median price was up 2.7%, also to 575,000. >> Latest data
Thanks for sticking with me for this week’s report. Don’t forget to check out The Sun’s daily coverage online. As always, share your 2 cents on how the economy is keeping you down or helping you up at cosun.co/heyww. ~ tamara
Miss a column? Catch up:
- What Colorado’s population will look like in the future
- Colorado business leaders are down on the economy, but not because of inflation
- Who will fill Colorado’s jobs in the future?
- Why Colorado’s growing work force seems like it’s shrinking
- The future of Colorado Springs’ economy and what it takes to live there
- How Colorado’s wages increased for 10 years — until they were adjusted for inflation
- Colorado has 190,000 job openings and 95,000 unemployed people — a disconnect?
- Denver had the second highest annual inflation rate in the U.S. last month
What’s Working is a Colorado Sun column about surviving in today’s economy. Email tamara@coloradosun.com with stories, tips or questions. Read the archive, ask a question at cosun.co/heyww and don’t miss the next one by signing up at coloradosun.com/getww.