Doubling down on defense a risky strategy for Colorado Springs

By Bart Taylor | May 03, 2016

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Colorado Springs is a city in search of a new economic brand. As solid as its bedrock industries are, there's growing sentiment that defense and tourism alone shouldn't define the city's economic prospects, that there's more here, and if Colorado Springs is to attract new industry, compete for skilled labor, and keep it's best and brightest home, its identity must evolve.

Where the evolution should lead is an open question. An influential group of business leaders would double down on Colorado Springs' connection to defense-related industry to become the nation's preeminent cybersecurity outpost. Frank Backes, CEO of Braxton Science & Technology Group, frames it this way, "We need to talk about a brand for Colorado Springs like Silicon Mountain was in the '80s and '90s. We need to make sure that the headquarters of the industry is here."

But for others, the issue isn't just whether Colorado Springs should move to attract cybersecurity-related industry. Most agree it should. A bigger question is whether the city subordinates other economic opportunities in a push to attract more defense-related federal spending, dollars that already comprise "40 percent of the Pikes Peak region's economy and about 50 cents of every paycheck dollar here." Would deepening the connection to the town's defense brand leave room to fully support other promising opportunities?

Certainly the cybersecurity opportunity is big, the outcomes critical to the nation, and Colorado Springs' national security legacy an asset to establish significant operations here. In fact, it's more of a statewide opportunity. It was noted last month at University of Denver's cybersecurity summit that Colorado has 12,000 related job openings. DU has gone so far as to offer a one-year master's degree in the field.

Cybersecurity industry employs "software engineers, network engineers, computer scientists" and other high-tech specialists, jobs that could change the city's workforce composition. Jobs that will appeal to cadre of young, smart, talented professionals so critical to developing the vibrant and progressive economy town leaders crave.

There's a private-sector outcome here; every data-intensive business will require more secure digital systems and processes. Think airlines, financial centers, and others.

Yet much of the billion dollar-plus opportunity is tied to national security contracts, government spending that companies here would pursue. Can the Springs muster resources to compete with a high-profile list of capable cities for this business, as it rallies a new brand strategy to promote homegrown private-sector opportunities?

If not, an underdeveloped but powerful lifestyle brand-in-waiting may suffer most. Colorado Springs, the self-proclaimed 'City of Champions,' boasts assets that put it on par with Boulder and others in the region as a destination not only for athletes and sports enthusiasts, but the outdoor industry. Like most every other Colorado city, the Springs is also incubating a progressive cadre of craft beverage and food businesses. Alongside the city's impressive list of attractions and quality of life attributes, it's a compelling lifestyle foundation.

But the city's standout crop of established sports-minded businesses and organizations seem strangely unconnected -- from each other or as a tight knit ecosystem used by city planners to attract related industry to the region. Craft lifestyle brands, also an asset, disconnected even more. Will a brand that reflects lifestyle industry gain favor and lead Colorado Springs to heights where Boulder, Ogden, and Portland reside? The idea's not gained traction yet.

Parker, Colorado, up the road from Colorado Springs, has rolled out the following ad campaign.

Imagine the same from Colorado Springs. What would it convey? Cybersecurity…and lifestyle? Can both be the brand Colorado Springs grows by?

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A second opportunity was envisioned in a DOE grant awarded Colorado, the 'defense-industry adjustment program,' renamed SMART, now FourFront. By whatever name, Colorado received $6.6 million to retrain defense-impacted contract manufacturers (CAMA, the Colorado Advanced Manufacturing Alliance, administers the grant on behalf of OEDIT); $6.6 million to wean industry off government's spend. Colorado Springs was identified a location for a retraining center. Today a "Fuse Center" is located in the Catalyst Campus as a result.

One private-sector outcome would be aligned with a national trend to stand up advanced design-to-manufacturing facilities. San Francisco's Lime Lab is a vertically integrated shop that marries industrial design with modern manufacturing capabilities. The concept is a catalyst for small-batch, customized manufacturing. New, inspired products and companies should follow. Boulder Engineering Studio is doing similar work.

Yet Lime Lab's manufacturing facility is in China. Why not integrated centers in Colorado Springs? The pieces are here: a capable ecosystem of high-tech fabricators, engineers, and designers; facilities including space currently leased in the Catalyst Campus envisioned precisely for this type of activity; enthusiasm for a technology future (including cybersecurity); and a rich higher education community. New advanced design-to-manufacturing centers would also breathe life into a FourFront effort that today has progressed only as far as videoconferencing.

Catalyst Campus benefitted from a $750,000 taxpayer grant last year, launching with the tagline, 'Where ideas converge.' Watching the Campus become a center for cross-industry collaboration in pursuit of a new and more inclusive Colorado Springs business brand would be a fair backpack.

It's no surprise I'm enthusiastic about manufacturing. But here, opportunity might coalesce around light manufacturing -- gear, apparel, components, beer, food, and spirits on the lifestyle side -- while showcasing a modern industrial capability centered around collaborative, high-tech, design-to-manufacturing capabilities and innovation.

Develop the cybersecurity opportunity, but redouble efforts to attract private-sector industry that better captures the creative undercurrent in this urban Colorado gem. As talent, money, and ideas flow into Colorado and the West, the city can emerge as an alternative to its high-flying but often frantic counterparts.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.