Regional Innovation Spotlight: Pueblo and Southern Colorado

Amid the current debate in Washington, DC, around U.S. competitiveness issues, BPC has been crossing the nation to gather local perspectives through roundtable discussions with private and public sector leaders. One of these conversations included a stop in Pueblo, Colorado to hear how competitiveness is defined and supported in the region.

Why Pueblo?

“Rural communities have to be innovative because we just don’t get the resources that urban communities get—change has to be driven from right here.” – Roundtable Participant

Pueblo County, historically a leader in steelmaking and manufacturing, is at the center of industry growth and innovation in southern Colorado. Increased focus on economic development, with new initiatives centered around improved infrastructure, revitalized housing, and support for new business ventures, has fostered a pro-business environment in the region. From Fortune 500 companies to homegrown start-ups across industries—including health and wellness, advanced manufacturing, aerospace and defense, infrastructure engineering, and outdoor recreation—entrepreneurs are drawn to the region’s extraordinary quality of life and future-focused business innovation. BPC attended Southern Colorado (SOCO) Start-Up Week to speak directly with local entrepreneurs.

Innovation and Investment Starts at Home

“Southern Colorado [is in a] bubble. All the money stays up north, so how do we get involved in those grants and economic development funding?” – Roundtable Participant

Colorado is one of the most attractive states to start or own a business. Nevertheless, not all regions share in this success, particularly communities in the southern corridor and “outside of [Interstate-25] who are left off the economic engine.” Further, participants representing the e-commerce industry expressed concerns about the significant administrative burdens associated with the tax code. To facilitate growth statewide, participants encouraged increased infrastructure development, which starts with fixing “regional and local supply chains to put technology in place” that can help businesses thrive right at home.

Nationwide efforts, such as the CHIPS and Science Act of 2022, are intended to help catalyze economic development and innovation. Roundtable participants were cautiously optimistic about these types of federal initiatives to support domestic innovation. One participant remarked, “long-term it could create the supply chain that will lead into different communities, but it’s going to take a long time,” and only if these initiatives bring about both direct local investment and similar changes in the workforce.

While federal funding to spur industry growth is crucial, participants were quick to note that it often imposes preferential treatment for certain sectors and regions, thereby creating additional barriers to local growth. One participant noted, “when industry was less impacted by the federal government, industry thrived.” There was an overarching sentiment that Coloradan entrepreneurs craved the freedom to be creative and competitive in local and national markets, but federal bureaucracy can unintentionally leave them “in many ways, with [their] hands tied behind [their] backs.” Further, statewide goals do not always align with the industry needs of rural communities, leaving them to create their own success with less financial resources and administrative support than urban centers. Ensuring investments equally target legacy sectors like manufacturing and agriculture, alongside technology, is crucial for entrepreneurs across southern Colorado.

Some also shared that the government can be too slow to address concerns when pain points arise, and when they do it is “often a knee-jerk reaction” that overcorrects or imposes more barriers for businesses trying to adapt to changing markets. One participant, however, left the group with optimism, reminding them of the power of local entrepreneurs: “We keep saying ‘how are we going to do this, the government is not going to keep up’ but we make up these systems, we are doing this right now and are utilizing AI in some form or another. When we make the government up of us, we tend to do okay.”

Entrepreneurs as Job Creators and AI Innovators

“In rural America, 50 workers is not a small business.” – Roundtable Participant

Local entrepreneurs and small business owners in Pueblo are turning to artificial intelligence (AI) solutions to help them compete with larger firms, with some using AI to plug workforce gaps. Participants stressed the importance of utilizing AI as a complement to—not replacement for—existing industries and workforce needs in the region. Many agreed that it is crucial to improve administrative efficiency or written communications so long as it does not stifle face-to-face relationships with clients and stakeholders, which is still “extremely important” in rural communities. Utilizing AI in this way could help rural and smaller regional economies, like Pueblo’s, compete with larger ones, despite having a smaller population.

This opportunity for increased AI use was, however, met with concerns from participants. One participant said that “AI is going to kill 65 million jobs over the next 10 years. That’s so significant that the economy is going to have to change and adapt to that. Schools are going to have to change. Jobs are going to go away. [We will need to] adapt our approach to competitive markets.” As such, participants recognized that they will have to drive change in their communities to make economies more resilient long-term.

Coloradan small businesses, and especially those in the trades, have recognized the importance of AI solutions as they have struggled to train and retain a skilled workforce while also ensuring quality services still exist on-demand. Vocational training in southern Colorado, for example, has been deprioritized relative to enhanced technology, leaving rural communities depleted of vital services. Participants noted that the lack of well-paying jobs in Pueblo and surrounding communities for trade workers drives them north to better wages and opportunities, albeit with longer commutes and increased costs. Participants recognized AI as a potential solution here too, encouraging engineers in the trades to develop programs that offer self-guided virtual tutorials enabling users to fix plumbing or electrical problems themselves—in many ways, “a gap YouTube fills for many people,” as one participant noted.

Alternatively, one participant pointed out that the nationwide shift away from vocational education toward college degrees effectively “killed” these programs in local communities exacerbating workforce shortages. Further, most trades and other blue-collar jobs have long relied on technology, underscoring the missed opportunity to transition to advanced vocational training in line with modernized technology over the past few decades.

To reverse this trend, participants focused on the education system, urging a reinvigoration of certification programs in the trades, and noting “it all revolves around funding to community colleges and high schools that want to participate.” Pueblo County high schools have started to bolster career and technical programs with courses in manufacturing, agriculture, and construction, among others, that expedite students’ transition into the trades after graduation. Many agreed that training should start even earlier—in elementary and middle schools—to spark and sustain interest in developing the essential workforce of the future.

***

BPC is grateful to Start Up Colorado for hosting this roundtable during SOCO Start Up Week and to all participants for their candor, insight, and good company.

Where should we go next? Contact BPC Managing Director of Strategic Initiatives Dane Stangler with your thoughts—and if you’d like to help!