Competing to thrive: Utah workforce vs. Colorado high-velocity industry. Who has the edge?

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In three years of profiling Colorado manufacturers and two years writing about Utah’s sector, it’s easy to understand why economic developers from each state view the other as primary competition. The attributes of each sector are strikingly similar.

It’s hard, for example, to distinguish between aerospace and bioscience contract manufacturers fabricating for high-profile OEMs; between world-class gear and outdoor industry brands; or the development dialogue that’s an envy of other states not benefitting from the in-migration of talent, money, and ambition. Both states boast great R&D research universities, transferring ideas and talent into the commercial stream. There are other similarities, much to do with the general appeal of the West.

There are differences. Utah is flush with consumer product brands compared to Colorado, where manufacturing is more significantly informed by ranching and agricultural. Colorado’s craft beverage sector has a gravity of it’s own, attracting like-minded businesses and a growing supply chain. In Weber County Utah’s perfecting a regional cluster strategy around outdoor industry that Colorado officials envy, going so far as to emulate a state-level outdoor industry office to both steward resources and attract world-class companies.

But two differences stand out. Both translate into a distinct competitive advantage — or potential missed opportunity for the other guy. How each responds may tip the competitive balance.

Utah is winning the workforce development game, maybe even nationally, no small feat or inconsequential advantage. Colorado manufacturers are significantly more challenged to find the next generation of industrial employees. On the other hand Colorado’s high-velocity natural and organic products industry is an economic engine of its own, driven by a world-class ecosystem that starts and incubates early-stage companies. Food and beverage is the state’s fastest growing manufacturing sector.

Is either a game-changer that tips the competitive balance? Can either state play catch-up and obviate the other’s advantage?

Utah’s workforce advantage is a beacon for manufacturers. Simply, the state’s developing the next-generation talent manufacturers need — educated, tech-savvy and capable but also shaped positively by Utah’s cohesive community. Utah’s sons and daughters leave, many on Church of Jesus Christ of Latter-day Saints missions, but return often fluent in another language, motivated and exposed to the world, to start careers and families surrounded by people of the same faith.

It results in workforce advantages difficult to replicate.

But a community bent on challenging conventional wisdom attracts its own talent and energy. Many of the companies that launched a natural and organic products revolution from Colorado are now multi-million dollar brands — as are its craft beer counterparts. And the ecosystem of resources that’s developed to support early-stage company growth is at once highly developed and attracting new players. Wall Street’s taken up residence in Boulder County.

In the long view, Utah’s workforce advantage may be harder for Colorado to replicate. The factors that combine to undergird workforce development here are unique. And the ecosystem that coalesced in Colorado to provide a foundation for innovation and fast-growth can certainly develop in Utah. Companies like PROBAR, Creminelli, and Kodiak Cakes, all companies we’ve featured, are an incredible foundation. They’re national brands leading their own local revolution.

Yet our interest has always been promoting the region — not just the attributes of a single state. As the region goes, so will its key players. As Colorado and Utah compete, it’s fascinating to speculate how competitive the combined manufacturing assets of both states might be on the international stage.

A Western Manufacturing Consortium of developer’s dreams.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

Manufacturing’s change-makers

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If foundries and fabricators are the heart and soul of manufacturing, today craft and lifestyle brands are its upstart rebels, tipping over convention and carving fresh tracks through and around an ecosystem never designed with its interests in mind.

Just the opposite. Craft food and beverage manufacturers have labored against a bulwark of industrial competition to gain a foothold but now lead a consumer revolution. Competitors are now envious suitors. Apparel and outdoor products enthusiasts intent on developing authentic, local brands work against a supply chain that was offshored wholesale in the late 20th century. But entrepreneurs find a way and today they plant the seeds for new U.S.-made industry, and model innovation and passion the multinational set covets.

In many ways these brands represent manufacturing’s future every bit as much as the tech-informed advanced manufacturers also changing our industrial landscape. Makers share a connection.

Here’s where we’re failing our rebellious vanguard. Support is often lip service and nothing more — even from manufacturing brethren. We’re prone to dismiss cutters, benders, and welders as relics but also frame the low-tech world of cut-and-sew or small-batch food processing as somehow beneath our aspirations as an advanced manufacturing community. For many, satellites are the end game, not saison or sweatshirts.

It’s a mistake to exclude any manufacturer. We should fancy them all.

For one, if we’re to change the perception of manufacturing, the new face of industry must include makers and manufacturers that resonate with a new generation. Today it’s a wide cross-section of neo-industrialists making ‘beer, food, clothes, skis, bicycles, and electric cars.’ Sally and Sam may not be interested in a career in rocket assembly or catheter fabrication, but may be in fashion design or advanced food processing and distribution. Or a manufacturing opportunity with an inherent social mission that helps scratch an itch.

A healthy cross-industry make-up also sustains the sector when select industries struggle. A perfect storm developed early this century when the U.S. auto industry imploded at the height of our infatuation with offshoring. Even the U.S. government was in the game. We invested in Russian-made rocket engines and manufacturing infrastructure in places like Vietnam, today a lifestyle manufacturing haven for U.S. brands.

Closer to home, pundits muse on the troubles ahead for Colorado’s craft beer sector. But if we look back, it was U.S. craft entrepreneurs sowing seeds for a more diverse sector. Ensuring manufacturing’s success means supporting a broad resurgence of industry.

So this week as CompanyWeek features a slew of upstart lifestyle manufacturers, embrace the change-makers. Revel in a new generation of manufacturers making it impossible to ignore the barriers we’ve thrown up that thwart our industrial ambitions — and their success.

And rally around the rebels.

Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com.

President-elect: Focus on domestic supply chains not trade agreements to grow manufacturing

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Hillary Clinton’s nod to Denver’s Knotty Tie at the Democratic National Convention — or was it Neil Borin’s Carrot & Gibbs? — is only the latest example of how manufacturing is influencing the 2016 general election. (Given U.S. Treasury Secretary Jack Lew’s visit to Knotty Tie last March, which we chronicled, she probably meant the former.)

Of course the sustained posturing from each candidate about manufacturing relates to international trade agreements and their impact on jobs. But like this election, there’s nothing conventional about how each views the issue. Candidate Trump could be confused for a pro-labor Democrat, angling to win Rust Belt states by blaming NAFTA and the pending TPP treaty for driving manufacturing jobs — union jobs — offshore.

Clinton seems bent on threading the needle and playing both sides, and as a result I can’t say today if I understand her position for or against. I can only surmise that in keeping with the craziness of the election, she’s aligned more closely with the dependably pro-Republican National Association of Manufacturers than Trump in generally favoring free trade.

Neither, really, articulate a reasonable alternative to the nation’s trade agreements or a fix that would actually benefit U.S. manufacturing. And there are clearly better ways to support the American manufacturing resurgence, full on underway, than canceling trade agreements to force companies to reshore jobs or stop sending them overseas, agreements that also open markets to U.S. companies.

The reality is that most are already considering more U.S.-based manufacturing, with good reason. Overseas labor is increasingly expensive. Quality and intellectual property are hard to control. Prototyping takes forever. Bottom line: Companies are simply weary of managing a 10,000-mile supply chain, and won’t if they don’t have to. The sheen is off. Owning and operating a multinational manufacturing company today if flat-out hard.

Instead, companies are interested in U.S. operations that enable them to tap a wave of new technology from America’s R&D engine. They seek to respond in real time to changing consumer tastes here and abroad — meaning speedier go-to-market outcomes made possible by shorter supply lines including locally sourced raw materials and labor. Yes, labor. A sea change is underway. We’re on the front end of a national movement to rediscover manufacturing careers. It’s driven in part by manufacturing’s new connection with millennials who want to buy locally made beer, food, clothes, skis, bicycles, and electric cars.

Want to engage in a real conversation to advance U.S. manufacturing? Be an advocate for the domestic supply chain so that U.S. manufacturers have everything they need to make things here, including labor. Want more apparel made in America? Rally support for initiatives like the Rural Colorado Apparel Manufacturing initiative, born right here, to develop cut-and-sew labor infrastructure brands need. Want major brands like Nike and Apple to make more shoes and iPhones in America? Invest in urban skunkworks that incubate technology and skilled labor that connects R&D with manufacturing processes. Start over. Embrace the design-to-manufacturing continuum, not just the design. Help Nike and Apple rediscover domestic manufacturing by reinventing processes and doing it in small batches, here, first.

It’s a campaign issue that could actually unite a divided electorate: Embrace manufacturing as a cause célèbre, without vilifying companies for pursuing the resources needed to build quality products alongside growing profits.

As candidate Trump and Clinton allude to reimaging manufacturing, we’re doing it. On the heels of the second annual M2 Manufacturing Growth & Financing Conference, we’ll convene at the third annual Apparel + Lifestyle Manufacturing Summit this September to connect brands with a growing supply chain.

If you’re interested in advancing U.S. manufacturing, and not politics, you’ll be with us September 28 in Denver.

Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com.

Utah 4th, Colorado 13th in aerospace manufacturing ranking as more confusion reigns

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Data continues to trickle out this summer that ranks and grades states for business and manufacturing prowess. It’s been a better month for the region even as analysts and journalists continue to struggle to get a handle on a fast-changing manufacturing sector.

In CNBC’s annual ranking of America’s Top States for Business 2016 Utah grabbed the top spot, Texas was second and Colorado third. California (32), New Mexico (39), and Nevada (40) found the lower half of the rankings among other western neighbors.

Utah also crashed the top five of PricewaterhouseCoopers’ 2015 Aerospace Manufacturing Attractiveness Rankings, with an impressive overall ranking of four. Colorado was 13th. For Utah, it’s a strong comeback from the Conexus Indiana report that confounded as much as it informed. Despite awarding the state three As out of eight categories, the report gave Utah’s manufacturing sector an overall grade of C. The PwC report is a deserved correction.

Washington, home to global powerhouse Boeing, ranked 12th and pundits there weren’t pleased. The Seattle Times‘ John Talton was incensed:

Washington boasts one of the planet’s two largest aerospace clusters (along with “Aerospace Valley” in Toulouse, France). In addition to Boeing, more than 1,300 aerospace-related companies are located here. In May, 91,700 employees worked in aerospace product and parts manufacturing. This is the backbone that makes Washington the nation’s third largest state for merchandise exports. Aerospace education is ubiquitous. Oh, as for taxes, don’t forget the nearly $9 billion in aerospace tax breaks associated with the 777X.

He concluded, with a sneer, “it appears the rankings are a combination of statistical fluke and reliance on local (potentially boosterish) reports”.

But as we’ve documented the past few weeks, manufacturing is confounding most everyone who’s measuring or writing about it.

Patty Silverstein, president and chief economist at Development Research Partners in Jefferson County, Colorado, chalks up growth in Colorado’s food and beverage manufacturing sector to cannibas. But she’s not sure.

Silverstein made the correlation referencing growth in food manufacturing numbers in a Denver Post article last week:

Recreational cannabis sales began in 2014. That year, “we had a 3.5 percent increase in employment. In 2015, a 4.9 percent increase in food-manufacturing employment,” she said. “The data doesn’t allow us to slice and dice to say, ‘These are indeed edibles or not,’ but the recognition is this is where they would be classified.”

She continued:

“Is it cavalier of me to say (manufacturing growth is directly correlated to the cannabis industry)? Absolutely,” she said. “I cannot prove or disprove it. But you look at who are the new entrants.”

It’s a surprising admission in light of other data and stories we’ve uncovered the past two and a half years, in the form of our weekly features on Colorado’s proliferating food and beverage companies. The ‘new entrants’ are dozens of innovators changing the national food conversation from Boulder, Fort Collins, and Denver and pitching their ideas across the state. They’re in plain sight.*

Colorado economic development officials can’t seem to believe their eyes either. How else to explain the comments of Laura Blomquist, senior manager of strategy and analytics at the state’s Office of Economic Development and International Trade?

In celebrating the state’s strong “knowledge-based” economy and high-percentage of educated workers, Blomquist used words that marginalize Colorado’s strong manufacturing economy. “The United States is transitioning to a post-industrial society increasingly comprised of knowledge-based enterprises,” she said. “These enterprises create higher paying jobs that typically require significant preparation through higher education and a high degree of complexity and innovation in the work itself.

I read recently the U.S. Secretary of Commerce refer to new manufacturing jobs as the “IT jobs of the future.” With manufacturing companies here and elsewhere struggling to find qualified employees, it’s time to roll out a new vocabulary that better meets the needs of a neo-industrial society that includes modern manufacturing.

We’d all be less confused.

Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com.

[*Panelists will be providing an update on Colorado’s natural and organic food sector at next week’s Manufacturing Growth & Financing Conference in Denver. Register here.]

‘Lies, damned lies and statistics’: Parsing manufacturing data an exercise Twain would appreciate

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“There are three kinds of lies: lies, damned lies, and statistics.”

Mark Twain’s frequently used quote was my first thought when reading the Conexus Indiana 2016 Manufacturing & Logistics Report Card for the United States.

Covered in a recent column by CompanyWeek‘s Bart Taylor, the report gave Colorado manufacturing a D grade for overall manufacturing industry health. It looked at eight different categories when developing this grade: Logistics Health (C-), Human Capital (C+), Worker Benefit Costs (B), Tax Climate (C), Expected Fiscal Liability Gap (C), Global Reach (D), Sector Diversification (C), Productivity and Innovation (B).

Are these grades an accurate reflection of the Colorado manufacturing sector? Is the report an unbiased measurement?

Conexus Indiana, the group responsible for the report’s development and publication, is a private sector led initiative similar by mission to the Colorado Advanced Manufacturing Alliance (CAMA). The first page of the report proudly states, “Conexus Indiana is focused on making Indiana a global manufacturing and logistics leader.” The actual data collection and analysis was completed by Indiana’s own Ball State University.

Did I mention Indiana got an A grade?

I will let you decide if I am guilty of an association fallacy, or if you agree that this report card is suspect because of its association with Conexus and Ball State.

For the sake of argument, let’s assume there are no “Indiana biases,” and the data is sound. After all, the report cites its sources which are generally from our own federal government. For example, when dispensing grades for Global Reach (the level of international trade in both imports and exports), the reports cites the U.S. Department of Commerce International Trade Administration. For the previous five years, Conexus has given Colorado the following grades for Global Reach: D+/2011; F/2012; D/2013; D/2014; D+/2015; and a D this year in 2016.

Ironically, I pulled from my files a March 2013 article by Bruce Goldberg, then with the Denver Business Journal. This article reported that Colorado was one of only 11 states to grow exports in double digit percentages from 2011 to 2012. What was the source for this positive report? The same U.S. Department of Commerce International Trade Administration data used by Conexus and Ball State. To refresh your memory, in 2012, Conexus gave Colorado an F.

Damned lies and statistics!

Does that mean I believe Colorado should have all As? Absolutely not. While I might cast reasonable doubt on the validity of this report, I am not willing to suggest Colorado isn’t woefully lacking in many of these areas.

Conexus’ category on Human Capital provides a nice example. According to the report, Human Capital measurements include rankings of educational attainment at the high school and collegiate level, the first-year retention rate of adults in community and technical colleges, the number of associate degrees awarded annually on a per capita basis, and the share of adults enrolled in adult basic education.

Conexus gave Colorado a C in this category. Probably a fair grade as workforce continues to be the number one issue facing Colorado manufacturers. But the report only looked at statistics. Statistics gathered by the government are always a lag measure. The Conexus report fails to report on the positive steps Colorado manufacturers are taking today to fundamentally change the way we build our future workforce.

Business and Schools in Collaboration, or BASIC, is designed to help manufacturers make their next generation of workers through internships and apprenticeships and put an end to the inflationary practice of buying our workers from neighboring companies. Using the Innovative Industries Internship Act, a program CAMA helped create with Representative Pete Lee from Colorado Springs, more than 162 Interns are currently involved in experiential learning with Colorado businesses. In light of this, I would certainly expect Colorado to have a higher grade in the near future.

Unfortunately, the same cannot be said in other categories. Ask any Colorado manufacturer if the state’s Tax Climate is favorable for manufacturing. Don’t be surprised if they give Colorado an F.

Another area where Colorado manufacturers might suggest a lower grade than that provided by Conexus is Logistics Health. Traffic congestion is a well-known fact in Colorado. What manufacturers understand better than most is that congestion costs drivers $1.35 billion annually in delays and fuel. When you have to ship product by truck, these costs are passed on to the shipper, adding to the cost of goods sold and reducing profitably. With a $25 billion transportation funding shortfall looming over the next 25 years, something must be done to improve Colorado’s highway infrastructure, or you can expect to see lower Logistics Health grades in the years to come.

While the validity of the grades posted by the Conexus report may be suspect, the issues they identified are real. Over the next four weeks, CAMA will examine, with industry experts, four of the topics: Human Capital, Logistics Health, Tax Climate, and Global Reach. We will discuss the issues in more detail and outline specific action items manufacturers can take to improve the situation. In many cases, improvements will come only through legislative actions. In other areas, manufacturers can take unilateral actions to improve their own and the Colorado manufacturing industry’s health.

Next week’s column will take a closer look at what the World Trade Center has to say about Colorado’s export/import climate, what they are doing to help the Colorado manufacturing sector, and how you as a manufacturer can take advantage of these opportunities. Stay tuned.

Tim Heaton is president of CAMA. Contact him at tim.heaton@co-cama.org.

Utah gets a ‘C’ in manufacturing but flashes workforce advantages

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In Colorado we’re ruminating over two reports released last month that rank the state’s manufacturing sector poorly. Tim Heaton, president of the Colorado Advanced Manufacturing Alliance, follows up on a column I wrote about the Conexus Indiana 2016 Manufacturing & Logistics Report Card for the Unites States that gave Colorado a ‘D’ in overall health for its manufacturing sector.

Utah fared better, but not much. Despite ‘A’ grades in three of the eight categories, Utah’s overall grade was a ‘C’, placing it behind such manufacturing juggernauts as Connecticut, Kansas and Tennessee. Both states also did poorly in a Site Selection magazine ranking of ‘manufacturing investments per capita’, a measure of million-dollar capital investments in manufacturing facilities per million residents. Colorado ranked 47th, Utah 39th.

Both Heaton and I found plenty to grumble about, especially in the Conexus report, from dated data to questionable methodology. I suspect that when or if Todd Bingham at the Utah Manufacturers Association gets around to responding he’d have similar issues with data that’s almost three years old, or bias that tends to award legacy logistics and supply-chain infrastructure that today struggles to support emerging growth sectors.

But the data is not without merit. It provides meaningful perspective for those like us who aspire to develop world-class manufacturing ecosystems. Wanna know how far we have to go? Kentucky ranked 1st in per capita investment with 173 manufacturing projects topping $1 million in capital or involving 20 new manufacturing jobs. Colorado and Utah each had nine. Think rust-belt legacy doesn’t matter? Think again.

Colorado’s ‘D’ grade is also focusing the conversation on areas where indeed, the state’s logistics and support network undermines economic development and manufacturing investment. Transportation may top the list. Interstate 70 has a reputation that transcends the state. It’s a lesson in inaction Utah policy-makers would do well to learn and not gloss-over.

Utah’s ‘A’s, in Worker Benefit Costs, Tax Climate, and Expected Fiscal Liability Gap, and a ‘B’ in Human Capital underscore its transparent workforce strength, a building block for success in manufacturing. Where other states are forecast to struggle mightily to train and equip a next generation of employees, Utah seems extraordinarily well-positioned in this critical area. Companies like JD Machine, profiled this week in CompanyWeek, are national models in adopting progressive workforce development strategies.

Ironically, Utah’s ‘B’ in Sector Diversity may play more to Conexus bias than communicate a true strength of the sector today. Yes, bioscience, aerospace and advanced manufacturing lead a fairly diverse sector that also boasts industrial food and energy stalwarts.

But manufacturing diversity in the future will also be defined by robust, dynamic artisanal sectors responding to changing consumer tastes that favor locally made food and beverage and lifestyle and consumer products; or feature a wave of start-up, technology-informed manufacturing companies that sustain world-class innovation in whatever form. Is Utah a hotbed of entrepreneurship and innovation in manufacturing, sustained by a progressive vibe that informs business environments in California, New York and even Colorado?

Yes and no. I’ve written extensively about Utah’s emerging leadership position as a hotbed of outdoor industrial development, namely Ogden’s growing ecosystem of lifestyle manufacturing companies and initiatives.

But at times, the cultural attributes that provide economic stability and offer sustained workforce advantages in Utah don’t translate into the state being a trend-setter. For example the natural and organic food tsunami of the past decade, a true revolution that’s changed the way America eats, has been slower to catch on here. It’s altered the economic landscape in neighboring Colorado and farther west in Oregon and Washington, where a food manufacturing renaissance is long underway.

Better late than never. We’re involved in a conversation with innovators in Utah’s natural food and products space to accelerate development of sector that’s simmering just under boil. More on this initiative soon.

On balance, other states like Colorado and California would likely trade manufacturing challenges with Utah as states strive to improve the sector. Workforce is a deep, systemic challenge that requires myriad investments — and time. Standing-up resources to accelerate growth in promising new sectors feels less daunting. We’re about to find out.

Improving Utah’s ‘C’ grade will be a positive outcome.

Results of Manufacturing Business & Operational Forecast good news for regional economy

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On the heels of two reports we shared earlier this month that portrayed a vulnerable manufacturing sector in Colorado, results of CompanyWeek‘s first Business and Operational Forecast offers better news. Momentum, not malaise, is the operative takeaway.

In late May, with the help of The Neenan Company and Manufacturer’s Edge, we pushed out a 10-question survey to 991 manufacturers, randomly selected from CompanyWeek‘s readership, from 10 industries and the supply chain. Just under 10 percent responded. The results provide a snapshot of the sector, as do other data, but communicate a healthier ecosystem than the national reports we referenced. (Also read Dawn McComb’s analysis of manufacturing real estate trends here.)

Most respondents were company owners or founders:


Industrial manufacturers were most eager to respond:

Consistent with Colorado’s small- to medium-sized business community, most respondents were middle-market companies:

A big majority, nearly 62 percent, forecast revenue growth this year and another 40-plus percent were already bullish on 2017:

Companies are hiring — 64 percent have plans to hire employees this year and 34% currently have job openings:

Respondents were more careful about investing in new facilities or expansions — 16 percent were moving or expanding this year and of those 21 percent were onsite renovations:


Innovation’s another matter. Fully 67 percent of respondents indicated plans to invest in technology in support of manufacturing operations — production/processing/manufacturing assembly. Over 39 percent indicated plans to invest in business systems — enterprise resource planning, financial systems, analytics and market and business development:


Questions we’ve raised about the adequacy of the local supply chain to support dynamic growth in manufacturing were reflected in the data: over half of respondents, nearly 53 percent, cited a preference for local suppliers but difficulty in finding them:

It all adds up to be an interesting counterweight to national reports that offered near-flunking grades for Colorado manufacturing. Challenges persist — like workforce, reasonably-priced real-estate and a supply chain that forces manufacturers to source outside the region. Not to mention business development for those operating in under-performing sectors like oil and gas.

But as we report every week, there’s a ton to build on here.

Bart Taylor is publisher of CompanyWeek. Email him at btaylor@companyweek.com.

Colorado is flunking manufacturing. Or is it?

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Like a left-right combination from Muhammad Ali, Colorado manufacturing was staggered this month by two reports that portray a struggling sector. What to make of the news?

Conexus Indiana’s 2016 Manufacturing & Logistics Report Card for the United States gave Colorado a ‘D’ grade for overall manufacturing sector health. The report grades states in eight categories, from sector diversification to global reach to human capital. Only New Mexico, Hawaii, and Alaska fared worse, with F’s.

Misery loves company, and based on data compiled by Conway Data Analytics for Site Selection magazine, Colorado ranked 47th in per capita manufacturing investments in 2015. The California Manufacturers & Technology Association analyzed the data and shared Colorado’s numbers with us. (California ranked 50th, a downer for an economy that boasts nearly 40,000 manufacturers.)

There’s so much to consider here, but let’s stay high-level and try and sort out some straightforward implications.

An easy path would be to simply discount the Conexus methodology and by all means, there’s plenty to work with if Colorado economic officials cared enough to respond. Tom Bugnitz, CEO of Manufacturer’s Edge, didn’t have to work hard to determine the Conexus report was based on 2014 data, or that data sometimes worked at cross-purposes. “We get high marks for productivity and innovation,” Bugnitz told me, “which means we need less workers, which gets us lower marks for overall health because it lowers the number of manufacturing employees as a percent of total employment.”

Indeed, the Manufacturing Industry Health grade — D — is measured by “the share of total income earned by manufacturing employees in each state, the wage premium paid to manufacturing workers relative to the other states’ employees, and the share of manufacturing employment per capita.”

Colorado’s other D grade among the eight categories was in Global Reach, or the “export-related measures of per capita exported manufacturing goods and the growth of manufacturing exports.” I’ll leave others more informed on export trends to determine whether a near-flunking grade is warranted, but Colorado seems well positioned to grow exports. But then again we consider agricultural goods part of the maker economy, and Colorado’s a national ag export leader, so I object from the get-go.

Colorado gets a C in Sector Diversification based on 2014 data. It’s already a dated statistic. Diversification is the state’s manufacturing calling card, from high-tech fabrication to device makers in bioscience to the craft food and beverage tsunami to a burgeoning lifestyle industry. Food and beverage has been the fastest growing manufacturing sector in the state since 2014.

All that said, it would be narrow-minded to assert that the Conexus report is flawed and therefore irrelevant. Data is data, and as a percent of GDP, or employment, Colorado’s manufacturing sector is underperforming compared to others states — states that would kill to have Colorado’s broader growth metrics. I’ve also chronicled the state’s challenge in developing a more robust supply chain and how the lack of a cohesive manufacturing development strategy is a drag on sector growth. Manufacturers are not without fault. Companies remain more comfortable operating in industry silos.

Yet manufacturing is thriving. We’ve profiled over 700 manufacturing and supply-chain companies since September 2013. We’ll profile 700 more in the next few years. It’s certainly entrepreneurial, and companies are scattered throughout different industries, which at times makes it hard to measure – and grade. Until growth companies and sectors mature and begin making a statistical difference that matters on a national scale, enduring bad grades or scores may be part of the program.

Like the aforementioned investment ranking. Colorado now ranks 47th in manufacturing investments per capita, an interesting stat that tracks manufacturing –related construction or expansion projects across the U.S. that involved over $1 million in capital or more than 20 new jobs investments. Of 2641 projects in 2015, Colorado hosted nine. Kentucky, a state with 4.3 million people, led the nation with 173. It’s a reminder how deep a manufacturing community other states lean on to attract new companies and expansions. The supply chains are long.

But how many companies do we need to shine a light on to get elected officials, economic developers, business groups and yes manufacturers, excited about what’s happening here? Who’s paying attention? California ranked 50th, a number that didn’t sit well. Its manufacturing trade association was quick to lament its status and challenge policy-makers.

We’ll gather July 27 in Denver for the 2nd annual Manufacturing Growth & Financing Conference. Increasing the level of investment in worthy manufacturing companies is the objective of the conference. Even if you’re not looking for money, it’s important you’re there. Investors need more awareness about companies shaping this sector.

Don’t be satisfied with a ‘D’, or being ranked 47th out of 50 states. I’m not. See you this July.

Bart Taylor is publisher of CompanyWeek. Email him at btaylor@companyweek.com.

Colorado gets in the lifestyle manufacturing game

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Earlier this year I wrote that manufacturing “can again become a jobs engine with the launch of thousands of new manufacturing businesses, a wave of middle-market companies across diverse industries. What we lack in large we’ll make up for in volume, in hot sectors like food and beverage, advanced contract manufacturing and lifestyle and consumer industries.”

Last month, CNBC featured CEO Paul Trible of Richmond, Virginia-based apparel maker Ledbury, who confirmed my sentiment under the headline, “Workshops, not factories, are US manufacturing’s future.” Trible described the new manufacturing economy this way: “Companies will bifurcate their product lines. Uniform-volume product will be made abroad, and highly personal, customizable goods will be created domestically.”

Indeed, large companies are rediscovering small-batch manufacturing here, domestically, even as overseas factories churn out volume products. The difference in methodology can be striking. Today U.S. operations are often informed by advanced technologies and processes that enable customization, speed time-to-market, and enable brands to follow changing consumer preferences in real time — not on schedules dictated by contract producers overseas. Superior quality is also a game changer. As Ledbury notes, “We are not going to be able to compete on price with other countries, but we can compete on craft. American-made will become a luxury brand.”

But small business will be the primary catalyst for 21st-century manufacturing, and for them, access to technology, advanced processes and money is more limited. That’s a why a subtle change being implemented by Colorado’s Office of Economic Development and International Trade (OEDIT) is an important development for regional makers and manufacturers.

Colorado’s growing cadre of lifestyle manufacturers including apparel and outdoor companies are now eligible to apply for Advanced Industry Accelerator Program grants, a program to this point reserved for early-stage companies developing high-tech products or those commercialized with the help of research entities or universities. In the state’s vernacular, ‘Advanced Manufacturing’ is one of 14 ‘Key Industry’ sectors identified in Governor Hickenlooper’s Colorado Blueprint, the administration’s guiding economic roadmap.

I’ve had issues with the Blueprint. For starters, ‘advanced manufacturing’ isn’t an industry, it’s a process. More problematic, it leaves companies not considered ‘advanced’ largely unconnected from a larger community of manufacturers and often without access to support, services, and money available to those, for example, considered tech-savvy enough for grants.

But technology is a catalyst for manufacturers operating in historically low-tech sectors — like apparel, where innovation lags. The type of small-batch customization envisioned by Trible and championed by Colorado’s own group of lifestyle companies will require advanced technology and processes. In this vein, ‘advanced manufacturing’ shouldn’t be a filter to disqualify worthy companies from financial aid; it should be viewed as an accelerator to spur growth and advance low-tech manufacturing.

With a push from Luis Benitez, director of Colorado’s outdoor industry office, and Katie Woslager, Advanced Industries’ senior grant manager, OEDIT finally agrees. Benitez tells me that today, OEDIT is accepting applications from “outdoor recreation, cut-and-sew, ski/snowboard, and bike manufacturing companies under Advanced Manufacturing applications”.

Apparel and outdoor recreation companies as Advanced Manufacturers! Not only does the change recognize that manufacturers in all sectors are increasingly ‘advanced’ and using technology to reshape markets and create opportunity, it’s a crucial component that’s been missing in the state’s outdoor and lifestyle promotional efforts.

Colorado, Utah, and others ‘tourist’ destinations will fully leverage their incredible lifestyle assets only with increased efforts to promote the region as a destination for lifestyle manufacturers. CompanyWeek has been beating this drum since September 2013, the same year the Colorado legislature passed the Advanced Industry Accelerator Program.

Welcome to the lifestyle game.

Bart Taylor is publisher of CompanyWeek. Reach him at btaylor@companyweek.com.

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Coming to a neighborhood near you: collaborative manufacturing spaces

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Last week, Curtis Williams outlined the conventional approach cities adopt to entice manufacturing businesses. It’s a combination of smart selling, the opportunistic use of incentives, and here, in Colorado, a large dose of leveraging natural attributes. Today Denver’s the fastest growing city in the nation. The rest of the state’s not far behind. It’s a home field advantage to envy.

Out-of-the-box development, the kind that attracts industry’s best and brightest, is harder, the formula more elusive and for manufacturing, largely absent from today’s economic development playbook. The irony is that communities are increasingly enamored with modern manufacturing. Cities crave growing craft food and beverage firms, light manufacturing in lifestyle and consumer sectors and high-tech fabricating and assembly.

Yet new voices in industrial development are emerging, cognizant of the value of primary jobs and the opportunity to build around the sustaining trends driving manufacturing back onshore or growth fueled by new consumer preferences. Among the most intriguing ideas is the concept of multi-tenant facilities that house complimentary light-manufacturing companies.

The idea is grounded in two trends at work in the economy. Officing concepts like Denver’s Industry, Galvanize, and WeWork facilities tap a modern professional ethos that values collaboration, community, and social networks. For entrepreneurs, the collective delivery of support services in these facilities, often extending to funding and talent, has also been a catalyst.

The second is the profound change in manufacturing, manifest in both the industries driving growth and how technology is changing industrial processes.

On a national level, consider Faraday Future, the ‘mysterious’ car company poised to break ground on a $1B factory in Nevada. The company’s site is to be mindfully located “on 900 acres of land near Interstate 15, a major roadway to Southern California. This means the company could attract large crowds for tours to increase brand awareness.”

A manufacturing factory that doubles as a tourist destination? Why not. It’s not difficult to envision an open and airy facility, with tourists and prospective customers treated to a full-on display of robotics and automation, technology and systems management — a 21st century industrial iteration of Disneyland.

It’s happening today on a smaller scale here, in the Rockies. One of Fort Collins’ most popular consumer destinations is New Belgium Brewing — a manufacturing facility. Now broaden your view, and envision visiting your favorite craft brewery in a facility that’s also home to a distillery, a composite cycle or ski maker and an artisanal food company — treats to enjoy as you watch products from each company being made.

The Neenan Company was the architect on the original New Belgium tasting room and brewery in Fort Collins and Neenan VP Shawn Sullivan has no problem conjuring the image. In fact he’s an evangelist today for the concept along the Front Range.

“There’s a real opportunity to create a dynamic manufacturing and retail environment through shared infrastructure and common area that would lower occupancy costs,” Sullivan explains. But operational savings may only be part of the benefit. “We also see the upside of enhancing brand awareness through cross pollination of people and products,” he adds. “We’re in the early stages of creating custom, innovative designs that bring neighborhood manufacturing to Colorado.”

Ted Eynon, co-owner of Colorado-based Meier Skis, has already moved beyond concept and into a space he hopes will house a craft brewery and other like-minded craft manufacturers. He shares Sullivan’s sentiments about the benefits of collaboration.

“When you think of Colorado, skiing and beer are going to be at or near the top of everyone’s list so it’s only natural to bring the craft production of both under a single roof for an immersive brand experience that consumers can actively participate in,” Eynon says.

Eynon moved Meier from Glenwood Springs to a location in Denver, near West 8th Avenue and I-25. “The goal is to have a unique offering of Colorado active lifestyle craft products where someone can be sipping a cold beer or spirit while simultaneously picking out or designing their own skis or snowboards — an open concept with lots of glass that will open up sightlines and ensure that everyone is able to feel and experience the brands. We are in the process of looking for the right brewing or distilling partner to make this a reality.”

It’s no stretch to see cities and towns getting in the game, conceiving developments and facilities aligned with Sullivan and Eynon’s vision, and beyond. The combinations are intriguing, including design-to-manufacture clusters in growth sectors like aerospace and bioscience.

Is it out-of-the-box economic development thinking that might change the fabric of urban development? We may soon find out, in a neighborhood near you.

Bart Taylor is publisher of CompanyWeek. Contact him at btaylor@companyweek.com.