When it comes to cultivating innovation — considered key to creating new jobs and growing a more dynamic economy — Colorado is on the right track.
That’s the conclusion of the Colorado Innovation Index released Wednesday by the Colorado Innovation Network, which was created last fall to connect innovation leaders across public, private and academic sectors. The report was released as part of the inaugural Innovation Summit in Denver.
The Colorado Innovation Network worked with a research team at Colorado State University to create the report, which compares Colorado to the nation as a whole and to seven benchmark states — Arizona, California, Massachusetts, New York, North Carolina, Texas and Utah. Those states were chosen either because they’re known as hotbeds of innovation or they are regional neighbors with close geographic and economic ties.
The report evaluated innovation in four categories — ideas, talent, capital and entrepreneurship. Colorado performed strongly across all four; key assets include its high per capita rates of workers with science and technology degrees, relatively low living costs, high quality of life and a desirable location in which to recruit and retain the most talented workers.
“Innovation and entrepreneurship are critical to sustainable economic growth,” Gov. John Hickenlooper said in a release announcing the report’s results. “This index will give Colorado a true measure of the state’s industry-driven and overall innovation progress. Moving forward, the Colorado Innovation Index will help us continue to educate businesses, investors, researchers, policymakers and others about the state’s innovation activity.”
Among highlights of the report:
• Colorado exceeds the national average for STEM (Science, Technology, Engineering, Mathematics) degree attainment. And it trails only Massachusetts for having the most workers with a bachelor’s degree or higher in the nation. But the report pointed to a decrease in STEM graduates as cause for concern. In 2000-2001, nearly 16 percent of degrees granted in Colorado were in STEM fields; that fell to less than 12 percent in 2008-2009.
• The nonprofit and university sectors in Colorado contribute an above-average amount to expenditure in research and development, but overall R&D intensity lags the nation. The state reinvested just over 2 percent of its GDP back into R&D in 2008, noticeably below the U.S. rate
• Colorado outperforms many benchmark states in patents, issuing over 450 patents per million residents in 2011. In July, Colorado was chosen to be one of four satellite locations for the U.S. Patent and Trademark Office; the satellite office in Denver is expected to generate $440 million in economic-development activity over five years.
• Colorado offers a high level of private capital funding in the form of venture capital investments, small business loans and access to bank branches. While Colorado trails far behind Massachusetts and California in attracting venture capital, it did well relative to the rest of the peer group, attracting a little more than $120 in venture capital funding per person in 2011. (Venture capital continued to bypass Colorado Springs, however, for all of 2011.)
• Colorado receives a relatively large amount of public funding from Small Business Innovative Research and Small Business Technology Transfer Grants, but is slightly below the national average in terms of National Institutes of Health funding.
• Colorado’s tax favorableness is competitive, ranking higher than the majority of benchmark states.
• Colorado performs particularly well in terms of small business measures, scoring high relative to the nation and the peer group with respect to births and returns to labor, although net job creation has slowed significantly.
• Colorado is above the national average in per capita income, but has trailed the national average in per capita income growth over the last decade.
To view the entire report, go to http://coloradoinnovationnetwork.com and click on Colorado Innovation Index.