Metro Denver’s Diverse Economy Drives Growth Across Multiple Industries
The Metro Denver Economic Development Corporation released the 11th Annual Industry Cluster Study last week to the tune of sustained growth across multiple industries in the nine-county Metro Denver and Northern Colorado region.
The annual study analyzes growth across nine major industries in Metro Denver and seven industry sub-clusters. Of the nine major industries highlighted in the report, all had positive overall growth in 2016. Among the seven industry sub-clusters featured in this year’s report, all but one also saw positive growth.
To celebrate the region’s continued success in supporting industry, this week’s E-Force blog breaks down growth across all nine industry clusters contained in the study.
Information Technology & Software
Metro Denver’s ascent up the ranks of top tech hubs continues, as information technology -software saw 9.4 percent employment growth—more than twice the national average—making it the fastest growing industry in the region in 2016.
The region’s IT-software sector ranks eighth among the nation’s 50 largest metro areas for employment concentration and boasts an average annual wage of $106,110.
In recent years, Metro Denver’s talented workforce and low business costs have positioned the region as a preferred alternative to coastal cities for startup companies that are both starting out and expanding, which has driven employment growth and venture capital investment in the IT-software industry.
After making its debut in last year’s study, beverage production enjoyed another strong year with 7.5 percent employment growth, ranking it second among all industries in 2016. Beverage production had the fastest five-year employment growth among industries analyzed in the study with 28.1 percent growth between 2011 and 2016.
From the MolsonCoors Brewery in Golden—the third-largest single brewer in the world—to the iconic Wynkoop Brewery in downtown Denver, the region’s beverage production industry is driven by one of the most dynamic beer scenes in the country, earning Metro Denver a reputation for being the “Napa Valley of Beer.”
Of course, beer isn’t all we do, as Metro Denver is also home to 25 craft distilleries, nearly 60 licensed commercial wineries and meaderies, and Celestial Seasonings, one of the nation’s largest herbal-tea manufacturers.
Metro Denver’s financial services industry thrives across three sub-clusters: banking, investments, and insurance. All three segments of this key industry grew in 2016 with investment services leading the way at 6.6 percent growth. Furthermore, all three segments exceeded national growth rates in 2016.
Companies such as Charles Schwab, Fidelity, and TIAA have committed to growing their presence in Metro Denver, driving the region’s growing reputation as a financial hub outside of the northeast. Today, Metro Denver’s financial services industry employs nearly 100,000 workers at more than 14,000 companies, making it the second-largest industry in the region behind healthcare & wellness.
Healthcare & Wellness
Healthcare & wellness remains the region’s largest industry with 214,430 workers employed at 19,760 companies, generating a cumulative payroll of more than $11.4 billion. In 2016, the industry experienced employment growth of 5.4 percent, its 13th consecutive year of positive growth.
The 578-acre Fitzsimmons Medical Campus, including the University of Colorado’s Anschutz Medical Campus and the Fitzsimmons Innovation Campus, is the hub of the region’s healthcare & wellness industry.
Today, the campus is undergoing a major redevelopment and will eventually support 40,000 employees. In addition to being an employment hub, the campus is also a center for higher education with the University of Colorado’s schools for medicine, public health, dentistry, pharmacy, and nursing all being housed at the campus. The Anschutz Medical Campus alone generates a $5.4 billion annual economic impact in Colorado.
In addition to healthcare & wellness, the Fitzsimmons Medical Campus also drives a thriving bioscience industry in Metro Denver, which consists of two subclusters: medical devices and diagnostics and pharmaceuticals and biotechnology.
In 2016, both segments of the region’s bioscience industry added employment at twice the national rate. Today, the five-year employment growth rate for the medical devices and diagnostics subcluster stands at 10.8 percent compared with 1.8 percent nationally. Despite being the smallest industry analyzed in this year’s study, the pharmaceuticals and biotechnology subcluster generates an annual economic impact of $14.5 billion.
Similar to the region’s IT-Software industry, Metro Denver’s biosciences are a magnet for venture capital. In fact, Colorado ranks seventh in the country for bioscience-related venture capital distribution dollars per 1 million residents. Since 2012, Colorado bioscience companies have received more than $1 billion in venture capital. Of course, this is not surprising when you consider that more than 1,270 medical devices, diagnostics, and pharmaceuticals are being developed by companies headquartered in Colorado.
Last year, Denver International Airport (DEN) again broke passenger-traffic records, which helped to spur 4.6 percent employment growth in the region’s aviation industry.
As Metro Denver’s national and global appeal grows, DEN continues to attract new airlines while serving more destinations than ever before. In fact, the airport now offers service to 185 destinations worldwide.
Colorado has the nation’s second-largest aerospace economy with 25,500 total workers employed in the industry throughout the state. Metro Denver continues to serve as the hub of the state’s aerospace industry with 79 percent of the industry’s workforce employed in the nine-county region. In 2016, Metro Denver ranked second among the nation’s 50 largest metro areas for aerospace employment concentration. Metro Denver’s aerospace industry also grew at a rate of 1.9 percent in 2016 despite employment in the industry declining nationwide.
With four military commands and eight major space contractors, Colorado provides the ideal environment for a prosperous aerospace industry. In 2016, U.S. News & World Report ranked the University of Colorado Boulder program among the top four in the country for graduate aerospace and astronautical engineering; and the U.S. Air Force Academy in Colorado Springs first in the country for its undergraduate aerospace engineering program.
Metro Denver’s fossil fuel subcluster was the only industry not to see positive growth in 2016, a trend that was consistent across the country. The good news is that employment in Metro Denver’s fossil fuel industry declined at less than half the national rate. Even more encouraging was the high growth in the region’s cleantech subcluster, which came in at 6 percent for 2016. After leading all industries in employment growth in 2015, cleantech finished 2016 as the region’s fourth-fastest-growing industry. And most encouraging of all, both segments of Metro Denver’s energy industry ranked in the top 10 among the country’s 50 largest metro areas for employment concentration in 2016.
Today, Colorado’s energy industry directly employs more than 70,000 workers earning nearly $7 billion annually.
Broadcasting & Telecommunications
In 2016, Metro Denver’s broadcast & telecommunications industry grew 0.4 percent while nationwide industry employment declined by 1.8 percent, another sign that industry in the region is resilient.
With 42,400 workers employed at 2,630 companies, Metro Denver’s broadcasting & telecommunications industry ranks fifth among the nation’s 50 largest metro areas for employment concentration.
Is it any surprise we are Number 1?
All nine of the industries contained in this year’s study offer average annual wages exceeding the national median income of $53,889, and five of the nine industries offer average annual wages exceeding $100,000.
The region also boasts seven industry clusters and subclusters with five-year employment growth over 20 percent, and only one of the region’s nine major industries is growing at a rate slower than the national average.
With such rapid growth across industries, it is no surprise that Metro Denver has claimed the number one spot on Forbes Magazine’s list of “Best Places for Business & Careers” each of the last two years. Did we mention Metro Denver is also the “Best to Live”?