LONGMONT — Colorado made a strong showing in a nationwide study that looked at entrepreneurship, innovation and the effect the two have on economic growth.
The Innovation-Entrepreneurship Nexus study examined a decade of data from 394 regions of varying sizes across the country, and Fort Collins finished No. 1 overall in the rankings of the most innovative and entrepreneurial regions in the United States.
That list combined two indices: one factored in entrepreneurial activity among new and growing companies during an 11-year period; and the other examined innovation based on the number of patents, research and development dollars spent and number of hi-tech industries.
“By weighing it by community size, it pretty much makes it a fair shot for all,” said Pamala Gibson, CEO of the Magellan Center, a Longmont think-tank that hosted the release of the study’s results.
Three other Colorado areas joined Fort Collins in the top 20: Denver, which includes the entire metro area, from Longmont on the north to Douglas County on the south; Colorado Springs; and Glenwood Springs.
Glenwood Springs finished No. 1 overall on the study’s Regional Entrepreneurship Index, which looked at the number of new firms started in a region in relation to the size of the region’s labor force, and at the number of firms that described themselves as “growing rapidly” during the same 11-year period.
It is when the entrepreneurship index is combined with the innovation index that a region achieves a “multiplying effect on economic development,” said Brian Headd, a Washington-based economist with the federal Small Business Administration.
The study was commissioned by the SBA and the Edward Lowe Foundation, a Michigan-based entrepreneurial support organization. Studying data from a variety of sources, researcher Michael Camp of Advanced Research Technologies was able to quantify the link between entrepreneurial activity and innovation and the health of local economies.
“Today, many regions are learning the expensive lesson that innovation is a necessary but insufficient condition for sustained economic growth,” Camp wrote in the published study results.
Regions ranked high in entrepreneurship had stronger local economies during the period studied than did those on the lower end of the scale.
From 1990 to 2001 the most entrepreneurial areas had 125 percent higher employment growth, 58 percent higher wage growth and 109 percent higher productivity than the least entrepreneurial regions.
“Those are big numbers,” Headd said. “Obviously, 11 years is a long period, but you want to be high on that list if you want to show good economic growth.”
How to use the study is the impetus behind Colorado Catalyst, a project spearheaded by the Magellan Center, along with Louisville’s DaVinci Institute, the Colorado Office of Economic Development, the SBA’s Office of Advocacy for Region 8 and the Edward Lowe Foundation.
Many of the government, economic development, academic and business leaders who attended Tuesday’s press conference announcing study results stayed after for a working lunch to launch Colorado Catalyst.
“We’ll be looking at a few things about Colorado that we know now, and each table will have an idea to discuss,” Gibson said, adding that seven of the Magellan Center’s eight senior fellows will work on the Catalyst project.
The idea is to forge as many relationships as possible, Gibson said, and to take the discoveries made in the study and use them to help Colorado remain in the forefront of entrepreneurship and innovation nationally.
“We’re delighted that Magellan is there in Longmont to do this,” said Jim Henderson, a regional SBA director. “It’s strategically located in a way, between some of the neat things that are coming out of (Colorado State University), and the many, many things that come out of Boulder and, of course, Longmont itself is starting to have some interesting things going on.”
Tony Kindelspire can be reached
at 303-684-5291, or by e-mail