Influx of high-paying tech jobs expected to significantly boost Colorado Springs’ economy
Technology and defense-related businesses have expanded in the city at a historically fast pace since December
Colorado Springs is on a roll.
Technology and defense-related businesses have expanded in the city at a historically fast pace since December; nine companies have announced plans since to hire nearly 3,000 people over the next several years.
The companies range from a major semiconductor manufacturer that plans to hire more than 400 people to a small firm that offers classified workspaces and networks for businesses and government agencies and plans to add 35 people. The nine companies plan to spend nearly $2 billion on buildings, equipment and other purchases for their expansion and will add nearly $1 billion a year to the Colorado Springs area’s economic output.
That sum would boost the economic growth rate of the Colorado Springs area, which last year was 5.1% when adjusted for inflation, to 7.3% — the highest in the 20 years the data has been calculated.
More than 80% of the jobs planned in the nine expansions are from five companies operating in the area — Boecore, Entegris, Infinity Systems Engineering, Microchip and Zivaro.
“That number (nearly $1 billion in economic output) is fantastic. It is pretty significant, especially since it is coming from companies who have been here and are staying here and generating that kind of growth,” said Tatiana Bailey, executive director of Data-Driven Economic Strategies, a Colorado Springs nonprofit focused on economic and workforce development research.
“These kinds of (high-paying) jobs are much needed. They will make a dent” in moving local wages higher.
Financial incentives — state and/or local tax credits and rebates — totaling more than $280 million played a role in persuading the nine companies to select Colorado Springs over other cities and states.
But the companies must first hire the employees and make the investments in buildings and equipment before credits can be claimed or rebates paid. The credits and rebates are for a limited period and are designed to help reduce the cost of expansion.
The string of announcements rivals some of the biggest economic development wins in the area’s history, including two projects announced a week apart in 1991 by technology giant Apple and long-distance telephone provider MCI Telecommunications. Those announcements helped pull Colorado Springs out of a deep recession and launched an economic expansion that lasted nearly a decade.
The current expansions will have a ripple effect on the economy; spending by the nearly 3,000 employees the companies plan to hire is expected to generate another 3,900 jobs in the local economy at grocery stores, restaurants and other businesses, according to estimates by the city’s Office of Economic Development.
The expansions “demonstrate that Colorado Springs is on the map not just nationally but internationally,” Eve Lieberman, executive director of the Colorado Office of Economic Development and International Trade, said in September during the University of Colorado Colorado Springs Economic Forum. Colorado Springs “has achieved an incredible transformation, the model of a turnaround that is making Colorado and Colorado Springs more competitive around the nation and world.”
The City Council has approved incentive agreements this year with nine companies to open new operations or expand their existing operations in the Springs. Eight of those companies, which also received state incentives, have announced plans to expand in the city. A ninth unidentified firm has yet to decide where to expand.
Shawna Lippert, the interim director of the city’s Office of Economic Development, said the nine agreements match the combined total for the past five years.
The Colorado Economic Development Commission approved financial incentives this year for eight projects in El Paso County, three more than any other county in the state and nearly-one fourth of the 33 approved statewide during the same period.
Lieberman said that several of the Colorado Springs projects involve semiconductor manufacturers or suppliers who also are receiving federal support through the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, enacted last year to provide $280 billion for domestic semiconductor manufacturing and research. Eleven chip companies employing 1,500 people operate in the Colorado Springs area, state statistics show.
Twelve companies are studying whether to seek CHIPS act funding for projects in Colorado, including three that have announced expansion plans in Colorado Springs — Entegris, Meyer Burger and Microchip — said Daniel Salvetti, semiconductor industry manager for the state’s Office of Economic Development and International Trade.
Microchip is spending nearly $900 million to retool its Colorado Springs manufacturing plant.
Entegris is spending $600 million to build a plant here for products used to make semiconductors. And Meyer Burger is spending $400 million to convert a long-closed local chip plant to make solar cells.
The most recent expansion announcement, by Colorado Springs-based Infinity Systems Engineering, started two years ago as a search for a new headquarters, but those plans got bigger as the company developed a new product line.
Called digital engineering solutions, the new software will be launched next summer and will use artificial intelligence and machine learning to help the Department of Defense and manufacturers “digitally transform” their operations.
More good news could be coming to the Springs.
Three companies that were approved for either city or state incentives haven’t yet made decisions on where they will expand; those companies plan to hire another 770 workers, invest millions in buildings and equipment and boost local economic output.
At least one of those companies, a Colorado Springs business that plans to add 200 people to its 70-person payroll, is nearing a decision and could announce its plans by year’s end.
Lippert, of the city’s Economic Development Office, said the announced expansions could eventually attract more companies to Colorado Springs, especially by suppliers and vendors to the expanding firms.
Those plans “prove that people are paying attention to Colorado Springs, and it is a serious contender when companies are looking for places to expand. All of the efforts to make the city an attractive place to invest have paid off,” she said.
Theresa Metcalf, who headed economic development efforts for the Colorado Springs Chamber & EDC before leaving this month, said in September that interest by businesses in expanding in Colorado Springs has increased “across the board both from within and outside the community.”
Many businesses look at expansion activity by other companies in a community as one of the criteria they consider when selecting a location for their own projects, she said.
The business expansions announced in the past 12 months are part of key industries the chamber is targeting with its economic development efforts, Metcalf said. Those include aerospace and defense companies, cybersecurity and software development, semiconductor production and advanced manufacturing, she said.
All nine expanding companies plan to pay salaries well above the county’s average annual wage of nearly $62,000.
The salaries for the three semiconductor manufacturers and suppliers are more than $10,000 a year above the county’s average wage.
The six other companies — defense technology contractors Boecore, Infinity Systems Engineering, Intuitive Research and Technology and Zivaro, cybersecurity firm Infinity Labs and classified workspace and network supplier Nooks — will pay average annual salaries ranging from $115,000 to $165,000.
“The whole point of this (economic development effort) is that they are high-paying jobs,” Mayor Yemi Mobolade said after Infinity Systems Engineering announced this month that it plans to expand its local payroll by 459 people.
“We are trying to bring down the cost of housing, but a more impactful solution is giving people the opportunity to make more money and be able to afford to live in this city.”
Bill Craighead, director of the UCCS Economic Forum, said the expansions will help increase local incomes and eventually move them closer to the national and Colorado averages as higher-wage jobs from the nine expansions are added over the next decade. The county’s average wage last year was 11.4%, or about $8,000 a year, below the national average and 16.6%, or about $12,000 a year, below Colorado’s average.
“The argument for these kinds of incentives is that they will raise average wages in the community, bring in more tax revenue and will have a greater overall economic impact,” Craighead said.
“In this case, the number of jobs isn’t large in terms of the overall economy, but it will make a difference.”
A string of job announcements and company expansions has occurred since late last year. They include:
December 2022
Zivaro
• Denver information and technology company focused on serving government and national defense partners
• 304 jobs, $5 million investment
• Average wage: $165,076
• Added annual economic activity: $62.5 million
Entegris
• Massachusetts-based global supplier of electronic materials that support the semiconductor and other high-tech industries
• 600 jobs, $630 million
• Average wage: $75,754
• Added annual economic activity: $148 million
February
Microchip Technology
• Phoenix-based semiconductor manufacturer
• 400 jobs, $880 million
• Average wage: $72,148
• Added annual economic activity: $419 million
March
Intuitive Research and Technology
• Huntsville, Ala., engineering and analysis firm
• 71 jobs, Not available
• Average wage: $115.049
• Added annual economic activity: Not available
April
Nooks
• California company that offers classified workspaces and networks for businesses and government agencies
• 35 jobs, $33 million-$50 million investment
• Average wage: $165,942
• Added annual economic activity: $14 million
August
Meyer Burger
• Swiss solar manufacturer
• 350 jobs, $400 million
• Average wage: $77,842
• Added annual economic activity: $107 million
Boecore
• Colorado Springs-based aerospace and defense company focused on software development, system engineering and cybersecurity
• 600 jobs, $8 million
• Average wage: $160,484
• Added annual economic activity: $137.3 million
October
Infinity Labs
• Dayton, Ohio, technology research and development firm focused on modeling, simulation and cybersecurity
• 61 jobs, $8 million
• Average wage: $130, 253
• Added annual economic activity: $3.3 million
Infinity Systems Engineering
• Colorado Springs
• 459 jobs, $14.7 million
• Average wage: $143,615
• Added annual economic activity: $60.5 million
ABOVE: Gunter Erfurt, CEO of Meyer Burger, right, talks with Mayor Yemi Mobolade in July after announcing his company will open a solar cell factory in Colorado Springs. RIGHT: Boecore President Tom Dickson lays out the company’s expansion in Colorado Springs in August during a Colorado Springs Chamber & EDC news conference.
Bertrand Loy, Entegris’ president and CEO, announces plans in December to spend $600 million to build what Entegris calls “a manufacturing center of excellence” on Colorado Springs’ northwest side that could add 600 jobs over the next several years.
Boecore President Tom Dickson announces the company’s expansion in Colorado Springs on Aug. 22 during a press conference at Colorado Springs Chamber & Economic Development Corp.
An architect’s rendering shows a 100,000-square-foot manufacturing facility that will be built by Massachusetts-based Entegris on a site along Rockrimmon Boulevard in northwest Colorado Springs.
Meyer Burger will repurpose the old Intel building on Garden of the Gods Road to use as a solar cell manufacturing facility.