Colorado Tech Industry Driving Job Growth, Despite Talent Shortage
Colorado’s top economists and business leaders expect the state’s economic growth will continue into 2014, and they believe high tech industries such as aerospace and software development will lead the way.
In fact, the industries are expected to do so well, they might have more job openings than qualified people to fill them.
That’s according to a forecast released this morning by the University of Colorado Leeds School of Business. The school compiles an annual outlook that is the consensus opinion of the state’s academic and business establishment. Those surveyed expect the state to have solid growth and add more than 61,000 jobs.
About 14,200, almost 25 percent, of the jobs will be in a category economists call “professional and business services,” which includes everything from lawyers to IT consultants to accountants, but also a good number of tech jobs like aerospace engineers, corporate managers, and software developers.
Companies in that broadly defined category benefit from many of the same advantages that advocates of Boulder and Denver as startup communities boast about.
“Colorado has strategic advantages in the professional and business services sector given the highly educated workforce, innovative spirit, and small-business base that we have in the state,” Dr. Richard Wobbekind, the executive director of the Leeds School’s Business Research Division and the author of the report, said in a media release.
Specifically, that includes the second-most college educated workforce in the country, a business and entrepreneur friendly environment, and a high-quality outdoor life that attracts young professionals, particularly those in their 20s and 30s, the report said.
Tech entrepreneurs working on software-as-a-service and cloud applications are bringing new life into a sector the report said had steadily been losing steam for a decade. Overall, software publishing has experienced a 10-year decline, but that number might be misleading. The report relies on categories economists developed decades ago, in the pre-Information Technology era. That leads to a split in how software development companies are classified. Companies that sell applications the traditional way—in boxes you can buy from an electronics store, or the enterprise equivalent—are considered “software publishers,” and are lumped into a category with book, newspaper, and phone book publishers.
In 2012, the report’s authors found there were 397 software publishers in Colorado, with 12,340 employees. The headcount of total software companies and employees is likely much higher, though, because that number doesn’t capture developers working for companies that deploy software through the cloud, who are put in the aforementioned professional and business services category. Like much of the business world, economists are still trying to catch up with the software-as-a-service paradigm.
Overall, Colorado companies look well placed to meet the demand generated by companies that are shifting more of their work to the cloud, the forecast said, and the state has a healthy business software sector, especially when it comes to network security.
Tech entrepreneurs got a special shout out. The state has a healthy business software sector, especially when it comes to network security, the forecast said. The report also cited the Kauffman Foundation’s report that found Colorado had four of the 10 communities with the highest density of tech startups, with Boulder, Fort Collins and its sister city Loveland, Denver, and Colorado Springs cracking the top 10.
But the news isn’t all good for tech. The forecast’s authors believe there’s a severe talent crunch that leaves many jobs unfilled. Otherwise the outlook would be rosier.
“One of the greatest challenges facing the industry is the talent pool shortage. Employment data and discussions with industry suggest modest growth in the state’s software publishing sector in 2014. The modest growth rate is largely due to the fact that the industry continues to be unable to find qualified workers, which leaves many unfilled jobs,” the forecast said.
The report did cite the work leaders in government and education are doing to address the problem with more support for science, technology, engineering, and math, or STEM, programs. It also noted private sector initiatives, like the g School at Galvanize, where students can learn to become computer programmers.