Federal labs in Boulder and across Colorado seen as $2.6B economic driver

Federally funded research facilities in Boulder and the rest of Colorado contributed about $2.6 billion to the state’s economy in 2016 and supported more than 17,600 jobs, according to a report issued today by the University of Colorado’s Leeds School of Business.

Of that $2.6 billion, the largest share of economic benefit by county was seen in Boulder County, at $1.1 billion.

Statewide, the report showed that Colorado’s federally funded labs directly employed nearly 7,800 people in fiscal year 2015, and supported an additional 9,800 jobs through the multiplier effect — that is, people employed by instrument manufacturers, utility companies and more.

The 41-page report — the latest iteration of a study conducted also in 2008, 2011 and 2013 — comes at a time when a new presidential administration has proposed serious cuts to spending in scientific research.

If adopted as proposed in President Donald Trump’s 2018 federal budget blueprint, significant reductions in funding — such as the 31 percent slashing proposed for the Environmental Protection Agency — could seriously impact the work highlighted by the data released today.

The Leeds School of Business compiled the report for Boulder’s CO-LABS, which stands for Colorado-Leveraging Assets for Better Science. The 2013 edition of the report had placed the economic impact figure for 2012 at $2 billion.

“The Colorado labs are integral to the economy — not only of our community, but to the entire state, and it’s also a driver for innovation, tech start-ups and for essential progress on national priorities,” Boulder Mayor Suzanne Jones said.

The significance of the report was addressed by Antonio J. Busalacchi, president of Boulder’s University Corporation for Atmospheric Research, which manages the National Center for Atmospheric Research.

“The report clearly demonstrates that the federally funded labs in the state are providing a critical contribution to the local economy, as well as advancing scientific knowledge to the nation,” Busalacchi said.

“That $2.6 billion that the labs contribute to the economy, that’s sort of part of the story. But it’s also the fact that they are supporting thousands of high-paying jobs, a strong technical workforce and, really, they’re intrinsic parts of the social education and technical fabric of the state.”

Front Range communities see the greatest level of activity in the sector that the study addresses, with Boulder County playing the most prominent role.

“Boulder, Jefferson and Larimer counties were the primary beneficiaries of the research facilities due to their physical location in these counties, as well as the residences of a majority of the facilities’ employees,” the study’s executive summary states. “Economic benefits in Boulder, Jefferson and Larimer counties totaled an estimated $1.1 billion, $654 million and $195 million, respectively” in fiscal year 2015.

Boulder County led all Colorado counties for the percentage of the state’s federal lab workers who call it home, with 45 percent of them doing so.

And Boulder led all Colorado cities for the percentage of the state’s federal lab workers who live there, with 27 percent residing in the city. Longmont placed second at 7 percent, with Louisville tied with Fort Collins at 6 percent. For Denver, Broomfield and Golden, the figure was 4 percent.

In Boulder County, the $1.1 billion in economic impact supported 7,627 jobs. With annual budgets totaling an estimated $606 million in the fiscal year 2015, the largest lab expenditure was on labor — 3,883 full-time, part-time, student and contract lab workers. Collectively, the report said, federal research facilities accounted for an estimated 3,276 lab workers living in Boulder County.

Big ripple effect

“I think it’s a continued confirmation that the federal research facilities in Boulder have a significant contribution to the city of Boulder and to Boulder County,” said Brian Lewandowski, associate director of the Business Research Division of the Leeds School of Business.

“And this is something that we have studied four times now and we have come up with similar conclusions each time, in terms of jobs that impact hundreds of millions or billions of dollars in economic contributions.”

Lewandowski said the report examines the flow of funding into, and spending by, the labs — but does not take into consideration the economic impact of the technology they produce.

“So, when UCAR helps create a wind prediction model that’s used by Xcel, that saves the fossil fuels for another day and helps reduce the cost for ratepayers and reduces costs for the company, that has an extended economic impact and that’s not even part of this economic impact study,” Lewandowski said. “We didn’t even go down that path.”

The budget blueprint released by the White House on March 15 under the banner “America First: A Budget Blueprint to Make America Great Again,” proposed a 16 percent decrease for the budget of the Department of Commerce, which houses Boulder’s National Oceanic and Atmospheric Administration, the National Institute of Standards and Technology and the National Telecommunications and Information Administration on its Broadway campus.

Its proposed elimination of $250 million in targeted NOAA grants and programs supporting coastal and marine management, research and education, including the Sea Grant program, should not actually affect the NOAA’s Boulder office. However, all proposals under the Trump budget are subject to change as the budget is reshaped and finalized by Congress.

In a news release concerning the report, NOAA is singled out, its work labeled “critical to protecting lives and property.” Specific mention is made of the NOAA team that developed the High-Resolution Rapid Refresh Model, or, HRRR, now used in 122 National Weather Service offices around the country.

“The collective impact of the labs’ research also ripples out to every state in the country,” said Dan Powers, executive director of CO-LABS.

“Ranging from partnership agreements to licensing of technology to outright free access to the research from these taxpayer-funded labs, thousands of companies throughout the United States representing hundreds of thousands of jobs utilize this science in ways that make us healthier, safer, more sustainable and global leaders in innovation.”

Cuts could hurt locally, nationally

As for what a budget as envisioned by Trump could mean for the future vitality of the labs addressed in the report, Busalacchi said, “What we’ve seen with respect to the administration’s budget is just the first skirmish of several battles of the war,” with its final contours to be determined by Congress.

Busalacchi added, however, “If these cuts are seen all the way through to fruition, these deep budget cuts will have adverse impact both on our local economy, but also on the ability of scientists here to conduct the research that is needed to protect lives and property and keep our economy strong and maintain a vigorous national defense.”

Boulder’s mayor expressed a similar sentiment.

“We’re very concerned about the possibility of cuts, and think it would be detrimental locally, as well as at the state and, frankly, the national level, because of the ripple effect of the important work that the Colorado labs are doing,” Jones said.

The report also examines the impact of research and development dollars flowing into the state from the federal government. It shows that in 2014, Colorado ranked in the top 25 states in terms of science and engineering R&D dollars from 11 different federal agencies.

Colorado was second in R&D funding from both the Department of Commerce and the Department of the Interior, and third in the nation for funding from NASA, which contributed more than $1.4 billion, or 40.8 percent, of the federal R&D dollars that come into the state.

For Colorado, the next highest source of R&D funding was the Department of Defense, contributing $802 million, or 22.2 percent of the R&D total.

The study also looks at which congressional district is home to the most lab employees. The leader is Colorado’s 2nd Congressional District, with 67 percent. The 4th Congressional District is home to 5 percent.

For the study, surveys were distributed to administrators of 21 research facilities in the state, and 17 responded.

Input for those agencies that did not respond to the study’s survey, such as Boulder’s National Telecommunications and Information Administration, was estimated based on their level of employment and a model that calculates input and output.

Charlie Brennan: 303-473-1327, brennanc@dailycamera.com or twitter.com/chasbrennan