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1/18/2004

Is it over?

By Tony Kindelspire
The Daily Times-Call

BROOMFIELD — The economy may have emerged out of its “nuclear winter,” as one pundit put it. But if we were really out of the woods, hundreds of people wouldn’t have shown up expressing a willingness to work for free.

It was an interesting paradox Thursday at CTEK’s 10th annual Forecast Fair, which, this year, was held in conjunction with its third “Making Business Happen” event.

While the former gathers a distinguished panel to discuss trends they see in the economy overall and technology in particular, the latter is an event in which young companies try to sell unemployed workers on the idea of contributing “venture labor” — working for deferred compensation — to their fledgling enterprises.

“I am very optimistic about the economy in general, and I’m very optimistic about technology more specifically,” said Tom Hoenig, president and CEO of the Federal Reserve Bank of Kansas City and one of the Forecast Fair’s panelists.

Hoenig said that when the final numbers come out, he expects that the nation’s gross domestic product will show growth of slightly more than 4 percent for 2003.

He also cited several factors which he believes indicate momentum for this year, including interest rates remaining low; the improvement of corporate profits — “I think that’s extremely important for investment, and I also think that’s extremely important for attitudes,” he said — improving foreign economies, including in Europe, Asia and South America; and a low inflation rate, which Hoenig said was currently running below 2 percent, a figure he expected to continue throughout this year.

Concerns, Hoenig said, remain what they’ve been the past couple of years: another terrorist incident on these shores or an unexpected threat like mad cow disease.

Although his comments were generally optimistic, he did note that the unemployment rate remains a concern.

“My own view is that as we continue to see the economy improve, we will see the employment outlook improve as well,” Hoenig said, adding that jobs need to grow by about 100,000 a month to see real improvement.

As for Colorado’s economy — the Federal Reserve’s 10th District includes this state — Hoenig said it was clear why the recovery was taking longer here.

“It reflects the U.S. in many ways, although it is more focused, more concentrated, in the technology sector,” Hoenig said. “That’s why Colorado is seeing more of a hit, but it should continue to strengthen.”

Other panelists offered their own, generally upbeat take on things. Jared Polis, chairman of the Colorado State Board of Education and Ernst & Young’s 2000 Entrepreneur of the Year, told the crowd of more than 400 that this was an excellent time to launch a business.

“It’s harder to raise capital now, people tell me, and I see that as a positive,” said Polis, adding that because there is more “rationality” in the business climate, “that bestows its own set of unique advantages.”

Gretchen Jahn, co-founder and a board member of Aegis Analytical Corp., came to the panel with more than two decades of experience in information technology. Although she acknowledged the impact the recent recession had on the high-tech industry, she said the mood is improving.

Trends in radio-frequency identification, security and health care, and compliance with the Sarbanes-Oxley Act all present opportunities for IT product and service companies, she said.

The second half of Thursday’s event at Level 3 Communications was CTEK’s third stab at bringing together displaced workers with companies that need them.

“Making Business Happen started a year ago at the Forecast Fair, when we got together and discussed how we could get things unstuck and get business happening again,” said Lu Cordova, CTEK’s president.

The first MBH, held last June, drew hundreds of people, as did the second event held last fall.

The concept is simple: Young start-up companies can’t get venture capital funding because they don’t yet have a product. The companies don’t have a product because they can’t afford to hire people because they don’t have any money. MBH, therefore, is designed to bring some of these fledgling companies forward to pitch their ideas before a crowd of very talented, but often unemployed, people willing to work for “deferred compensation.” If the idea behind the company works, they’ll get paid.

Mark Feuer, a volunteer with CTEK who coordinates the event, coined the term “venture labor” to describe these workers.

Feuer said that of the audience members who showed up for Thursday’s MBH, 68 percent were people looking for a new position, 10 percent were companies looking to hire — “Please raise your hands so we can inundate you later,” quipped Feuer — and 17 percent were service providers hoping to hawk their various products.

“Sixty-four percent of the people in this room have either a master’s or Ph.D.,” said Feuer, adding that, “71 percent said they would work for one to six months, and 11 percent said they would work for a year or more.”

Thursday, five companies were on hand to pitch for venture labor.

“We’ve got all the right pieces,” Cordova told the crowd before the pitching began. “We’ve got labor, we’ve got capital, we’ve got ideas. They’re just not in the right order.”

Tony Kindelspire can be reached at 303-776-2244, Ext. 291, or by e-mail at tkindelspire@times-call.com.