Colorado was ranked third among U.S. states in a recent report by the Milken Institute that measures the success of local technology and science industries.
The State Technology and Science Index looks at tech-based economic growth, investment in higher education, entrepreneurship, technology development and the skill levels of a state’s workforce.
The index uses dozens of data sources, including the U.S. Census Bureau, Bureau of Labor Statistics, Venture Monitor reports, the Patent Technology Monitoring Team and household surveys.
Colorado’s highest marks in the index were in its Technology and Science Workforce Composite category, which ranked our state at No. 2, said Charlotte Kesteven, senior policy analyst at the Milken Institute’s Center for Regional Economics.
“There’s a strong pull of tech workers from places like California,” she said. “Mountain-west states have been doing this for several years now. Colorado has good infrastructure, broadband connection and a good business environment.”
Workers also move to Colorado — from cities such as San Francisco and Los Angeles — seeking a higher quality of life, Kesteven explained.
“The coastal states increasingly do not have this unless you earn an enormous amount of money,” she said. “If you earn $100,000 in a city like Los Angeles, you’re definitely not in the stable middle class, whereas if you move to a suburb in an inland state, you only need a reasonably well-paying tech job to have a really good life.”
Colorado’s affordability is eroding, but “will probably keep going for a little while longer,” Estevan explained.
Our state’s second-highest score, No. 3, was in the index’s Technology Concentration and Dynamism Composite category.
“Colorado has done pretty well at being a tech hub, especially in IT,” she said. “There’s a hub of people in software engineering.”
California came in at No. 2 overall in the index, but the state’s high taxation rates have driven many workers to move to Colorado, Estevan explained. Massachusetts was ranked No. 1.
Colorado’s lowest score, No. 8, was in the Human Capital Investment Composite category, which measures how well the state invests in education. The index looks at how much money is invested in students at all levels, but particularly in STEM, Estevan explained.
Our state also scored slightly lower, No. 6, in the Research and Development Inputs Composite category, which measures the output of research from universities, grant funding for research and companies’ investments in research and development.
Colorado was also ranked No. 6 in the Risk Capital and Entrepreneurial Infrastructure category, another index that measures how well innovation is supported in a state.
“Say, for example, a university develops some interesting new thing, and then a private company brings in billions of investment dollars to turn that into a commercial product that will become a big company that then employs scientists and high-tech workers,” Estevan said.
Colorado dropped by one slot from its No. 2 ranking in 2020 by the biennial index.