The Down Low on Denver/Colorado

The national buzz is all about creating jobs nowadays, but are metro Denver and Colorado hot commodities among people who sell cities and regions to worldwide companies as places to expand or relocate?

Only one of nine business site selectors who were wined and dined over the past three days by Denver economic-development recruiters cited the metro area and Colorado as a current hot spot. And that recruiter suggested the alternative-energy industry -- shaky ground during the current economic downturn -- is Colorado's strongest calling card.

But the site selectors were not brought here to pat Colorado and Denver on the back. The Metro Denver Economic Development Corp.'s annual site-selection conference traditionally seeks out the weaknesses of the area's attractions to national and international corporations in order to improve regional prospects for recruiting a corporate expansion or relocation in the future.

And why should small business in Colorado care? Because big business generates small business growth in an area where it operates. When a big company comes to Colorado and hires 100, 400, or 1,000 new employees, it also must look for local suppliers, construction contractors, maintenance firms and other service businesses -- sometimes even venture partners and bankers -- to accomplish their work.

And new jobs put money in the pockets of dry cleaners, sandwich shops and caterers, landlords and professional sports franchises, gas-station operators, home builders, teachers and government workers.

So what was the lowdown on site selection shared by the experts?

Outsourcing is being reversed. Companies that sent work to China and India are bringing it back to the U.S., using domestic call centers, data centers, and distribution centers to better serve their customers. Companies are collaborating with each other to reduce costs of business services provided by third-party vendors: human resources, legal, some information technology, employee retention.

Consolidations and mergers and acquisitions are causing longer decision-making cycles, up to 18 months, but when a company decides to "pull the trigger" on a move or an expansion, they want a winning-city bidder to act quickly, sometimes within 30 days, to accomplish what they've promised in their bid.

Tax breaks and other incentives to lure businesses are being eliminated by some states, mostly for budget reasons; adjusted for different industries by others; and supplemented with cash funds, often under the control of a governor, to close deals in the hottest recruiting states. So the competition among states for new business is fierce. Colorado incentives are still graded a C- to D+ by most economic developers.

And no economic-development organization should assume current local businesses are not being recruited by other states. That's another reason small- to medium-sized businesses should pay attention to what these business-recruitment experts have to say about Denver and Colorado every year.

"You need to be in touch with your local businesses all the time," said Ann Harts, a Kansas City principal of Hickey & Associates, a national and international site-selection firm based in Minneapolis.

Another of the experts, Angelos Angelou, of Angelou Economics in Austin, Texas, said he visits Colorado and other states frequently without notice and when he hears a company has not been visited by its local business-development specialists, he wonders how his own client might be treated by that state if it chose to move or expand there.

"Colorado has never won a project on incentives," Angelou said, based on his experience working within the state. But he said Colorado can compete with any other state based on the talent of its workforce. "Focus on talent. Focus on the business proposition," he suggested to the 400 people in the audience.

Then, referring to Gov. John Hickenlooper who had spoken to the crowd to open the breakfast meeting, Angelou said Hickenlooper's vision of Colorado as a "pro-business" state is as competitive as any of the arguments of hot-spot recruiting states.

"Take the governor to places," Angelou said, "and let him speak." He seemed to think that might be Colorado's sharpest tool in its shed.