Boom and bust. That is the love-hate economic cycle that weaves its way through Colorado’s history that many of us know all too well as our economy expands and then contracts, sometimes overnight. In our Colorado history classes, we learned about the collapse of the fur trade in the 1830s, the Silver Bust in the 1890s, the Great Depression in the 1930s, and even more recently Black Sunday in 1982 which hit the West Slope hard. We know the story of Leadville with the closure of Climax Mine in the late 1980s and how that impacted both Leadville and Buena Vista, my then hometown, as jobs were lost causing families to move and the community’s overall wealth and ability to attract investment to decline. Thankfully, Colorado is learning how to evade the sharpest busts as community leaders from urban and rural areas embrace smart economic development practices.
At the heart of it, economic development is about supporting the diversification of a regional economy across a wide array of industry sectors. It is akin to working an investment portfolio, identifying risks and opportunities, hedging to offset declines, and doing the research on what the next big opportunity is so that you are well-positioned in the market to gain wealth. Or simply put, don’t put all your eggs in one basket.
Wise communities study the distribution of their industry sectors looking at jobs and total salaries to know where their community is invested and to identify any potential risks. Then, they take action and make thoughtful investments in areas of opportunity that will support long-term economic sustainability and an improving-quality of life for their community. Colorado has seen this necessity to diversify our local and regional economies and it is delivering results.
Colorado’s economy was ahead of the nation during the Great Recession and again it is ahead of the nation with the current pandemic-induced recession. Our economic diversity is making us more resilient to economic shocks, just as a diversified investment portfolio does.
Do we have risks? Of course we do, but we know what they are, and we are proactively working to smooth the risk in those areas while smartly targeting our diversification work towards up-and-coming industry sectors and new start-ups that pay above-average annual wages.
This is a proven economic development strategy to advance economic diversity by directing resources towards sectors and jobs that are higher on the economic ladder with a strong future. A few of our targets include outdoor gear manufactures, value-added agriculture, creative industries and location neutral business/workers. In the long run these deliberate efforts help protect our community’s economic well-being and quality-of-life by maintaining and expanding our community’s existing wealth while also presenting a strong case to those looking to invest in our community. Anyone looking to open or buy a business, build or buy a home, or simply relocate here and enjoy a stable and sustainable community should find reassurance in our economic diversity when making comparisons and investment decisions now and down the road.
We enjoyed record-breaking real estate market over the summer of 2020, and building permits are up year-over-year as people are making investments. Other economic indicators such as personal income, including median household income, average weekly wages, and labor source vs. non-labor source income, are all trending the right direction and have for the past few years.
Looking at business indicators, we see new business openings, city sales-tax collections, GDP and unemployment rates all trending in the right direction. Prior to the pandemic, our local unemployment rate was so low it was actually restraining business expansion due to lack of workers to support expanded operations. Another indicator of note is that investments in the region, revealed by bank deposits, commercial property values, and residential property values, are all steadily trending upwards at reasonable rates. These indicators tell us that our diversity is our key strength, keeping us well-positioned for the next decade and away from a boom and bust cycle.
John is the Director of the Economic Development Council and a 3rd generation Routt County resident with a deep love for the Yampa Valley. Coming from a long line of ranching, he is proud of, and has a passion to protect, Steamboat’s diverse economy that supports all industry sectors.