DENVER, Colo. – If you’re hoping to buy a home in Denver or Boulder these days, you might want to bring your checkbook.
Demand for housing is outstripping demand at an astonishing pace, with more than 100,000 people moving into the Rocky Mountain state in 2015 alone and only 25,000 new housing units constructed during the same year.
The story in much the same in many Western states, which appear to have bounced back faster and higher from the Great Recession states in other parts of the country – including the Upper Midwest.
The natural question is “Why?” and the answers aren’t simple. However, demographics and the size of the workforce appear to be a common theme. Keeping talent at home and attracting it from elsewhere is a recurring theme in the New West, which offers a lesson to Wisconsin. Read the full Milwaukee Journal Sentinel article here.
The westward migration that began in earnest with the Gold Rush of 1849 renewed with a fury in the 1990s and continues to this day, fueled in part by economies that adapted to change and embraced innovation.
Colorado is a prime example. Between 1990 and 2015, its population grew by 2.1 million people – a total larger than the Milwaukee metropolitan area. Today’s total of nearly 5.5 million represents a 65 percent increase over that period, versus 28 percent for the United States as a whole.
Other Western or Southwestern states with rapidly growing populations include Arizona, Idaho, Nevada, Washington, Oregon, Utah, Texas, Montana, Wyoming and North Dakota, although North Dakota appears to have peaked with the end of the oil-and-gas boom.
Those same states ranked high in a recent Denver Post index of job growth in 13 sectors, and covering the period April 1990 through April 16. Along with Colorado, those 10 states occupied 11 of the top 13 spots among the 50 states.
“The number one reason companies locate here is the labor market, and that has three components: cost, quality, supply,” the director of Economic and Business Research at the University of Utah told the Denver Post. “We (the West) have done very, very well on all three.”
Wisconsin didn’t fare poorly in the newspaper’s rankings – it ranked 24th, two spots ahead of California. Other Midwestern states were down the list, which examined jobs in mining; government; construction; leisure and hospitality; retail trade; information; education and health services; wholesale trade; financial services; business and professional services; manufacturing; transportation; and utilities.
Most people are familiar with two staples of the Colorado economy: the oil and gas sector and the legal marijuana industry, which hit $1 billion in sales in 2015. The drive along the U.S. 36 corridor between Denver and Boulder not only offers stunning views of the mountains that make up Colorado’s Front Range, but impressive perspectives on the rest of the state’s economic growth.
Technology companies in the life sciences, telecommunications, energy and aerospace have found a home along the often-congested corridor, which is among many physical examples of Colorado’s business boom.
Observers credit a mix of factors beyond the outdoors hooks: A regional government approach in the Denver area that keeps municipalities from fighting among themselves, a pro-business governor with an entrepreneurial background, the lure of Denver International Airport, the energy boom, labor stability and major research universities and federal labs across the state.
There’s also a culture of entrepreneurism that is cross-generational, with older entrepreneurs mentoring newcomers and sometimes the other way around. Younger workers and companies have clustered in areas where there’s a mix of lifestyle attractions and cohesive working spaces. Colorado has also seen an explosion in business accelerators and other support groups, and attracts much of its venture capital from outside its borders.
Wisconsin has a strong start on much of that ingredient mix, as noted in the most recent “Wisconsin Portfolio” report by the Wisconsin Technology Council. This annual report looks and angel and venture capital trends, which are often an indicator of emerging company growth. While total dollars invested in 2015 declined from the previous year, the number of deals rose by 13 percent (from 113 to 128), there were more $1 million deals (from 38 to 47) and greater diversity in terms of geography and business sector.
Wisconsin can stay on the path to prosperity by keeping more talent at home and attracting more from elsewhere. That includes making wise investments in Wisconsin’s higher education system, which is a source of talent as well as ideas and emerging companies.
The nation’s biggest job-creation states are also states that have attracted and retained the most people. Wisconsin can’t sprout mountains, but it can stay the course in encouraging its high-growth, innovation economy. That’s a mountain worth climbing.
Still is president of the Wisconsin Technology Council. He can be reached at email@example.com.