Small Businesses Drive Growth and Innovation in Colorado Springs
By Jayne Mhono, Communications Manager
The Pikes Peak Region comprises diverse businesses that support economic development in the region. Defined by the Small Business Administration as companies with fewer than 500 employees, small businesses are the engine that drives the region’s economy by sparking innovation, generating tax revenue, and creating jobs that support local families.
Small businesses with less than 500 workers employ approximately 121,651 people in Colorado Springs, accounting for 47.4% of metropolitan area employment. Colorado Springs has an estimated 74,287 small businesses, representing 98.7% of metropolitan area businesses, according to the U.S. Small Business Administration.
In 2021, Congressional District 5, which comprises El Paso, Teller, Park, Fremont, and Chaffee Counties, had 16,715 small businesses that employed 130,128 people. The Professional, Scientific, and Technical Services industry had the largest number of employees, about 2,526, accounting for 41% of the small business payroll. The Construction industry, and Healthcare and Social Assistance industry followed closely at 2,345 and 1,988 employees for the former and latter, respectively.
Thriving Startup Ecosystem
Renowned for its thriving aerospace and defense industry, the Pikes Peak region has created a healthy environment that supports business innovation and growth. Incubators and accelerators, including Catalyst Campus and Exponential Impact, help rejuvenate and insulate the region’s economy by providing resources that promote entrepreneurship, a prolific startup ecosystem, and technological evolutions that create competitiveness. Colorado Springs’ venture capital programs have enabled small businesses to build connections that stimulate growth.
Since 2018, Catalyst Campus has hosted 107 companies in its accelerator program and secured 353 government contracts valued at $284 million, according to the Gazette. Some of the companies that went through the program received millions in investments, while 11 others underwent consolidations. Synaptech, a Colorado Springs Software engineering company, was acquired by LMI, a consulting firm based in Washington D.C., expanding LMI’s space presence.
In its quest to enhance economic growth, Exponential Impact has injected $4 million into local businesses since its inception in 2017. The accelerator provides programs that support technology startups at all stages of growth and connects them with funding to help them flourish. Through its Survive & Thrive Program, Exponential Impact distributed $2.3 million in low-interest, non-recourse loans to 132 small businesses in Colorado Springs that were struggling with the adverse effects of the COVID-19 pandemic, resulting in $156 million in economic impact. The loans enabled businesses to keep afloat with little worry about possible claims on their possessions in case of non-payment.
Small and mid-sized businesses in Colorado Springs continue to make headlines for churning out innovative technologies that revolutionize 21st-century manufacturing. In the Colorado Chamber of Commerce’s “Coolest Thing Made in Colorado” 2023 Awards, OcuLenz, a technology designed by Ocutrx, for people with moderate to severe age-related macular degeneration, made it to the top-ten list. OcuLenz provides “functional vision” for patients who have lost the ability to read emails and visualize faces.
Quantum Metric, a Colorado Springs Startup, was ranked by Deloitte as one of the fastest-growing technology businesses in North America in 2023, following its revenue growth of 395% in the past three years. In 2021, the software developer landed $200 million in venture capital in a deal that valued the company at more than $1 billion, making the startup one of the first technology unicorns in the region. The favorable business environment and early-stage support that the Pikes Peak region provides to startups and growing companies boost its ability to attract some of the most promising businesses.
The International Trade Administration shows that in 2020, a total of 462 companies of unspecified sizes exported goods and services from Colorado Springs. The State of Colorado exported goods valued at $10.3 billion in 2022, making it the 33rd largest exporter out of the 53 exporters in the United States, according to the Observatory of Economic Complexity (OEC), an online data visualization and distribution platform focused on geography and dynamics of economic activities. Most firms that engage in exports in Colorado are small businesses with fewer than 500 employees. In 2021, a total of 5,729 companies exported goods worth $8.5 billion from Colorado, of those, 5,028 were small businesses, making up 28.9% of exports or $2.5 billion in export value.
The importance of small businesses cannot be overemphasized. While government aid is essential in the growth of small businesses, consumer support is also crucial in building thriving communities.