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Error Sector Loss Approaching – Why isn’t our tech sector booming?

From between two desks filled with computer monitors and towers of books with titles like “Mobile Robots”, “Sensor Robots” and “Making Things See” professor Nebojsa Jaksic oversees the growing mechatronics program at Colorado State University- Pueblo, a small gold mine of innovators.>>>

He teaches and works with students in the program to build products that make life easier. Innovations like robotic chair stackers, a solar-powered electric bicycle and robots that could build houses are among the projects Jaksic watched students work on this past year. 

Mechatronics is the combination of mechanical and electronic engineering with the use of computer controls. The program also has the potential to improve the economy in Southern Colorado, as the state is becoming a front-runner for tech companies and start-ups. 

Colorado ranks third in the tech industry when it comes to concentration. In 2012, 162,600 Coloradans were employed in the tech industry, up 600 jobs from 2011, according to the 15th edition of the Cyberstate Report from TechAmerica,. 

The report found that Colorado is sixth in the nation for software publishers, seventh in computer equipment manufacturing and ninth in engineering services. 

Built in Denver, an advocate and “matchmaker” for inventors, investors, academics and creatives of digital technology, reported there were 122 digital tech start-ups in the state. That’s equivalent to launching one start-up every 72 hours. 

Cocoona Technology, a Boulder company that invents and markets natural technologies used for fabric, and Blogfrog, a software publisher specializing in brand building, are just two examples of companies that call the Denver-Boulder area home. 

Mapquest, Otterbox, Photobucket and NewsGator all call Northern Colorado home as well. 

While the Denver-Boulder area is becoming a hub for technology, Pueblo’s economy is still based around manufacturing, as it always has been.  

Jack Rink, president and CEO of the Pueblo Economic Development Corporation, said that even though Pueblo is heavy in manufacturing, the organization is open to bringing more tech companies to Pueblo and encouraging start-ups. 

“Industries tend to attract each other,” Rink said, explaining that businesses tend to “cluster.” Because Pueblo was established as a manufacturing city, other companies have made Pueblo their home, just as tech companies have relocated to Denver because they’ve witnessed other businesses succeed. 

This principle means the industrial culture in Pueblo will likely continue. 

Southern Colorado is also becoming a hotspot for railroad companies that will continue to expand in the near future. This will feed the manufacturing sector and possibly the tech industry, said Rink. 

Both Rink and Jaksic said railroad engineering has become more hi-tech, which could expand the digital culture in Southern Colorado but the railroad industry is highly complex and a much different type of technology than start-ups are. 

This fall CSU-Pueblo will be introducing a master’s program in railroad engineering. When the department looked into adding the degree Jaksic said the Transportation Technology Center and PEDCO were both big supporters. 

“We heavily rely on the railroad industry to help,” Jaksic said. 

TTCI will be providing instructors for the courses, some of the best labs in the country and has even received applications from students wanting to enroll in the program. 

“We’re hoping to bring in more railroad companies,” Jaksic said, adding that responsibility would be on PEDCO. 

As for growing a culture where the tech industry can thrive in Pueblo, Rink said PEDCO engages in several marketing techniques, attends conferences in hopes of attracting businesses to Pueblo and has planned a trip to San Francisco to recruit companies looking to relocate. 

Rink said diversifying the industries is most important. PEDCO would like to bring more healthcare companies to the area as well. 

The question still remains how to encourage start-ups in Southern Colorado. 

Rink said in order to encourage entrepreneurship, four components are needed: an educational feeder system, people who understand technology and business, economic incentives and the ability to network with other people in the same industry. 

To foster start-up companies, there exists little funding, however. In 1984, voters approved the half-cent sales tax and while this money goes to PEDCO, it is used it to “bring primary jobs to the area.” Rules set by city council make being able to qualify for funding difficult for small businesses or start-ups but Rink said there are still opportunities for start-ups.  

“We are happy to help smaller or existing businesses find ways to qualify for funding- and would love to do more of that,” Rink said. 

It’s not that there aren’t resources for start-ups in Pueblo. They’re just greater in the Denver-Boulder area. 

Northern Colorado is rich in venture capitalist groups and incubators, a major reason why the area is becoming known as “silicon mountain.” 

USA Today reported in August that TechStars and Foundry, two Colorado based venture capitalist groups, have over $350 million to help start-ups succeed. 

And while data on the Rocky Mountain Venture Capital Association website shows that just over $90 million has been invested through venture capitalists in the state, Southern Colorado is staying the course.  

“(Pueblo is more focused on) proven technologies,” said Hector Carrasco, Dean of the College of Education, Engineering and Professional Studies at CSU-Pueblo. 

This all goes back to PEDCO’s mission of bringing primary jobs to town. Carrasco said this usually leads to manufacturing jobs because primary jobs make products that are sold outside of the community where they are produced.  

When the focus is on primary jobs and older, proven industries, entrepreneurship seems to be lost. Jaksic doesn’t believe there is incentive for his students to venture into a start-up in the region. 

Jaksic said the majority of his students take internships after graduation rather than founding their own companies or continuing their innovations because starting pay with an established company is good, usually around $60,000 and start-ups aren’t guaranteed to succeed. 

“If (students) have a lot of buy-in in their (senior) project, they’ll continue,” Jaksic said, but this doesn’t seem to be happening, “They don’t want to be hungry,” he added. With nearly all of his students securing jobs, or internships that lead to jobs, after graduation, creating companies just isn’t a part of the picture.  

So how does Southern Colorado retain young, innovative minds that build businesses? 

That answer is still unclear. 

Rink said promoting entrepreneurship is an important aspect to fostering new growth but bringing companies to town that will hire these graduates is key because “many will not choose to take the entrepreneurial route, either because they don’t have a risk-taking personality or they prefer to work for an established firm with the kind of resources and structure they prefer.” 

Joey Cho, assistant professor of computer information systems in the Hasan School of Business at CSU-Pueblo said it is rare for his students to establish their own start-ups, as they are usually looking to find jobs already available in the Pueblo area. 

He said bringing speakers of start-ups to talk to students might inspire them. 

Cities usually tend to attract relocating businesses because they have good infrastructure like airports and a pool of qualified employees, Cho said. 

Carrasco believes cities to the north are booming in technology because of the universities. They’re large and many of the innovators choose to stay in the area because they like the atmosphere. He noted that those universities are much larger than CSU-Pueblo but overtime that should happen in Pueblo too. 

But as Jaksic puts it, “One part is missing. The crazy inventors.”

— by Kara Mason

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