What makes Boulder’s economy thrive? Some would say it is our stunning natural surroundings or world class lifestyle. But what if we are missing the bigger picture, the engine driving innovation, jobs, and opportunity? The truth is, Boulder’s success is no accident, and without strategic planning and action, the very foundation of our economy could falter.

Boulder’s economy is at a crossroads. While our reputation as a hub of innovation, top-quality talent and a diverse industry foundation remains strong, there are underlying challenges to our vitality. Rising operating costs, housing affordability, and growing competition from other regions, along with concerning social trends, such as homelessness and crime, are threatening the foundation of our success. These issues are not new, but they are intensifying.

The data regarding employment trends are a troubling indicator. From August 2023 to August 2024, Boulder’s unemployment rate rose by 1%, reaching 4.1%, its highest level in three years. Despite a 2% increase in the labor force, job creation did not keep pace, resulting in higher unemployment. While Boulder still outperforms the state and nation, these stagnant employment trends signal growing pressure on our labor market. Boulder County also saw a 6% decrease in employment from September 2023 to September 2024, pointing to a broader regional slowdown.

The local real estate market also reflects economic strain. Boulder’s office vacancy rate is at 22.2%, with downtown Boulder reaching 30%. These figures indicate a shift in business operations and a reduced demand for commercial office space, partly due to remote work trends. These real estate vacancy figures are far more than a concern for commercial property owners and brokers. Empty offices mean fewer patrons at our local restaurants and less spending in our retail stores. Boulder’s slowing annual retail sales tax growth, just 1.8% through August 2024, the slowest since 2019, paints an urgent picture.

Some argue that Boulder’s economy will thrive without intervention, relying on its strong reputation and natural advantages. This view overlooks the reality of increasing competition from regions like Austin and Raleigh, which actively recruit talent and offer incentives to growing industries, let alone the tug from surrounding Front Range communities on everything from our industrial cornerstones to our dominance in the culinary arts. Without strategic support, Boulder’s competitive edge could slip down the slope.

To climb to the summit of success, Boulder must implement a bold economic strategy that capitalizes on its unique strengths. We need to invest more in upskilling and reskilling programs to equip workers for jobs in emerging industries. We should pursue increased funding to help entrepreneurs and small businesses scale. We might even consider measures that are new to our community, like a branding campaign to attract business investment that complements our target industry sectors and fills empty offices.

Moreover, economic growth must be inclusive. Studies show that regions prioritizing diversity and equity tend to outperform those that do not. Expanded workforce development programming will be an important tool in our drive toward economic inclusivity. Further, while Boulder’s success in attracting venture capital investment — over $14.7 billion between 2015 and 2023 — demonstrates our capacity for innovation, we must support underrepresented entrepreneurs with the tools for success, including funding.

Finally, we must get out of our own way. Regulations and review processes that fail to recognize the need for flexibility and speed in response to business conditions kills innovation and investment. We also need to consider costs, something business leadership cited as a top concern in a recent survey. In a competitive regional and national landscape, that is a major red flag. That same survey also called out solutions to homelessness and crime as priorities. All I reference above only scratches the surface of what needs to be a strategic effort to pull our local economy back from the brink. To maintain and build on our economic success, Boulder must double down on initiatives that foster innovation, build inclusivity and promote economic resilience. The Boulder Chamber Economic Council is excited to collaborate with our government and business support partners in this effort ... but it needs to begin now, with data-driven policies and programming.

As we move toward the strategic planning effort, let us start by establishing a shared understanding of the current conditions. Join us at the Economic Forecast on Jan. 21, 2025, where top economists and industry leaders will share insights into the trends shaping our future. Reserve your spot now by visiting the Boulder Chamber Economic Council website. And if you want to be inspired by a vision for Boulder’s unique brand of economic vitality that we want to cultivate in our strategic planning efforts, watch the new Economic Summit video here.

Joseph Hovancak is vice president of economic vitality for the Boulder Chamber.