Engage Colorado - Colorado's Politicians Are Losing A Race They Don't Even Know They Are Running

Newsletter — Issue 30 — Tuesday, July 21, 2026

This newsletter has been published by Engage Colorado.

The Drivers Series — Category 2 · Factor 2c

Colorado's Politicians Are Losing a Race They Don't Even Know They Are Running

This Engage Colorado Newsletter reflects the personal opinions of Dan Caruso, written with the support of the Caruso Ventures team. The Ensuring Colorado's Innovation Future Coalition did not review and has not endorsed this Engage Colorado Newsletter.

I had breakfast last week with a major investor in two of Colorado's leading tech companies. He told me Texas would grant the companies $25–$50 million each if they agreed to move to the Lone Star state. He does not want to move away from Colorado — but the combination of Texas fighting so hard and Colorado making it increasingly costly to remain here puts both of these companies at risk.

Texas understands that $25–$50 million is an investment in their state — and that all Texans will benefit from the economic activity and job creation that come with being headquarters of companies like these.

The investor went on to tell me that Austin's priority is to attract venture capitalists and other investors; Dallas's is to win over headquarters. Texas leaders appreciate California for driving away its innovators, and they are thrilled that Colorado is losing viability as a welcoming home to tech companies.

California is unlikely to change. But Colorado can. As a first step, we must be honest in diagnosing the problem.

This newsletter completes the walk through Category 2 — The Business and Political Climate — from The Honest Assessment. Issue 27 covered 2a — Political Rhetoric Toward Business. Issue 29 covered 2b — State–Federal Friction. This issue covers 2c — State Investment in Economic Development. The next issue will move into Category 3 — The Cost of Doing Business.

As with the broader Innovation Vision and The Honest Assessment, I led the preparation of this section and it reflects only my views.

Factor 2c

What State Investment in Economic Development Actually Means

Category 2c of The Honest Assessment is state investment in economic development — whether a state actively competes for capital and jobs, or takes them for granted.

Texas is a prime example of the winning states — states that have decided competing for companies is a core function of state government. The Governor's office and the economic development team, with support from the legislature and voters, show up. The apparatus is coordinated, well-funded, politically-backed, and publicly celebrated.

The losing states, by contrast, often treat incentive programs as politically unpalatable — and as unneeded given legacy strengths. They move administratively slow, leaving companies to navigate fragmented bureaucracies with no single point of accountability.

Losing states don't view winning businesses as an investment that will provide a substantial return for their state. Instead, they see it as a cost that competes against other budget items. They don't realize the negative return of the competing categories — because the signals sent to capital deployers are that the state is undisciplined in spending its resources on unsustainable and often counter-productive initiatives.

Many of the Departure Geographies take for granted that they will retain and attract business. In California, it is Silicon Valley, Hollywood, the ocean, and the weather. “Entrepreneurs and creators need to be here,” they tell themselves. In New York, it is the financial markets. “New York is the Financial Capital of the World,” is their bet.

Colorado has 300 days of sunshine, a healthy outdoor lifestyle, and beautiful mountains. We have a leading tech ecosystem in important categories like Space, Quantum, Digital Infrastructure, and more. We assume they will want to be here, but more people are departing than arriving.

Dangerously and disappointingly, Colorado is following California and New York's playbook of taking for granted that innovators want to be in their states. And the political leaders are like ostriches with their heads in the sand — pretending that all is fine despite the overwhelming data and anecdotal evidence to the contrary.

The gap is not just financial — it is cultural. Founders and executives notice whether a state acts like it wants their business or takes them for granted.

The Scoring

Factor 2c · scores are out of 5  ·  current → trajectory

Colorado's current position (1.7) is slightly better than the Departure average (1.5), but Colorado's trajectory of 1.2 is worse than the Departure cluster's trajectory of 1.3. In plain terms: Colorado's economic-development apparatus is not just weak by Destination standards — it is deteriorating faster than the states already known for taking business for granted.

What Winning States Are Actually Doing

The Destination Geographies compete aggressively — with programs specifically designed to close deals:

When one state's governor is making personal calls while another's legislature is debating new restrictions, the signal is unmistakable.

Where Colorado Sits

Colorado has an Office of Economic Development and International Trade (OEDIT). Colorado has some incentive programs — the Enterprise Zone Program, the Job Growth Incentive Tax Credit, the Strategic Fund. These exist, and OEDIT does real work.

But the scale, the coordination, and the political backing do not match any of the Destination Geographies. Colorado does not have a Texas Enterprise Fund equivalent. Colorado does not have a Tennessee-style statewide talent database. Colorado's incentive programs are not routinely announced in billion-dollar deal-closing headlines the way Arizona's TSMC deal or North Carolina's JDIG wins are.

Most importantly, Colorado does not have a Governor's-office-calls-personally culture. The state's posture toward companies considering where to grow has been broadly passive — and the contrast is increasingly visible in where talent, capital, and headquarters are choosing to go.

The 1.2 trajectory score reflects this reality. Colorado is not competing aggressively for capital, and the gap between Colorado and the Destination Geographies on this dimension is widening, not narrowing.

What This Means for Colorado — On State Investment in Economic Development

Reversing this trend requires more than incremental improvements to OEDIT. It requires a structural commitment by Colorado's Governor, legislative leadership, and business community to build an economic-development apparatus that competes at the same level as Texas, Florida, North Carolina, and Arizona.

That means:

None of this is beyond Colorado's reach. Every Destination Geography was, at some point, a state that decided to compete. Colorado can decide too. And if it does, it will be to the benefit of every Coloradan.

What Comes Next

The next issue in this series moves into Category 3:

If We Work Together, We Can Reverse This Trend

But first, we have to diagnose the source of the problem — which is why this information is being shared.

If Colorado takes the appropriate steps, Colorado can be the most attractive innovation ecosystem in the world — and every Coloradan will share in the economic and cultural prosperity that leadership creates. This is the Innovation Vision for Colorado.

Go Deeper

— Dan Caruso, Engage Colorado

Managing Director of Caruso Ventures, Host of The Bear Roars Podcast, and Board Chair of Boulder Roots Music Fest