Policy Priorities
2012 State Policy Priorities
1 Promote a Supportive Tax and Regulatory Climate
2 Promote Increased Access to Capital for Bioscience Companies
3 Support Higher Education and Promote University Research and Technology Transfer Activities
4 Encourage Economic Development
1 Promote a Supportive Tax and Regulatory Climate
Explanation of Issue
Nearly every state in the nation is working to attract the bioscience industry to their state through favorable policies. Colorado continually ranks in the top ten states for bioscience and is at risk of losing its companies to other states or countries. A friendly tax and regulatory environment is crucial to remain competitive and grow the bioscience industry in Colorado.
Colorado’s regulatory environment is currently controlled by Colorado’s Department of Regulatory Agencies (DORA) consisting of over ten divisions focusing on protecting consumers and creating a flexible regulatory framework that promotes a fair and competitive business environment. Through the work of DORA, Colorado consistently ranks in the top five states for growth prospects, economic freedom, entrepreneurial activity, the number of start-up businesses per capita and the best states for doing business. Supporting the current activities of DORA and ensuring these agencies implement rules and procedures that both protect consumers while also fostering a healthy business climate is crucial for Colorado to remain a top state to both live and conduct business.
Along with a business friendly regulatory environment, Colorado also provides a competitive tax structure that rewards investments and business innovation. According to the Tax Foundation’s 2010 State Business Tax Climate Index, Colorado has the thirteenth most business-friendly tax climate. Colorado is also recognized with having the tenth best corporate tax index. There are many factors to these rankings that specifically impact the bioscience sector, specifically the single sales factor apportionment for corporate income tax, the Colorado Innovation Investment Tax Credit and the sales and use tax refunds and exemptions that directly apply to the biosciences. These programs show that Colorado not only supports industry, but specifically supports the growth and success of the biosciences.
The Colorado BioScience Association (CBSA) supports efforts in modernizing the state’s economic development incentives, continuing the development of new tax and business incentives and programs and working to create a business friendly regulatory environment for the bioscience industry in the state. These programs will help retain current companies, attract new companies to the state, and ensure the growth of new start-up companies in the bioscience sector.
2 Promote Increased Access to Capital for Bioscience Companies
Explanation of Issue
Venture capital investments in Colorado bioscience companies totaled $1.46 billion in the last six years. Colorado remains a competitive player within the bioscience industry, but there is a crucial lack of funding for research, development and product commercialization within the state. There are only five bioscience investment firms in Colorado, requiring companies to seek out of state investors from both the east and west coasts to international markets. As Colorado’s bioscience industry continues to grow, it’s important for the state to support and encourage new investors to both invest in the state and open offices here.
Many of the traditional sources of funding for start-up and early-stage companies have dried up due to the economic downturn. Colorado’s research institutions are some of the best in the nation, with the research institutions in the state spinning out on average 20 new bioscience companies each year. As this rate continues to rise, it’s imperative for the state of Colorado to support the growth of the bioscience industry at this early stage in order to encourage the advancement of new company opportunities.
The Colorado BioScience Association advocates for current and additional state bioscience capital funding programs that address these essential elements to help ensure a prosperous industry. The CBSA also promotes the development of new programs that will retain current Colorado companies and incentivize them to remain and grow in Colorado.
3 Support Higher Education and Promote University Research and Technology Transfer Activities
Explanation of Issue
While Colorado is known for its quality of life, the state is also recognized for its highly educated workforce, ranking second for individuals with college degrees. The Milken Institute State Technology and Science Index consistently ranks the Colorado bioscience cluster 3rd among the national top clusters. The national attention is a direct result of the extraordinary research and education being conducted within the state’s research institutions.
Our research institutions are leaders in innovation and new company creation. On average Colorado research institutions spin out 20 new bioscience companies each year collectively. Academic bioscience research and development expenditures totaled $437 million in 2008.
Supporting higher education and promoting university research and technology transfer activities is a top priority for the Colorado BioScience Association. In a tightening economy, the CBSA advocates for retaining the programs that help advance research and development activities and technology transfer in the state’s research institutions.
4 Encourage Economic Development
Explanation of Issue
Colorado is known as a business friendly state, but other states around the nation have pulled together a variety of incentive packages to attract companies to relocate, especially for high wage and growth industries like the bioscience sector. It is essential that Colorado remains competitive and continues to offer competitive incentives that will not only attract more companies to the state but also retain our current companies.
Colorado has a competitive advantage over other states working to grow a bioscience cluster; the state is a targeted industry cluster and continues to grow in both number of companies and employees. The medical device sector employment rate grew 8.19% and the biotech/pharma employment rate grew 2.99% from 2005-2010, outpacing the national average.
Currently the bioscience industry has over 600 companies with 20,000 direct employees and an average salary of over $74,161. The multiplier of indirect jobs for each direct job is about 3.5, totaling over 100,000 direct and indirect employees in Colorado.
Colorado is also home to one of the largest concentrations of federally funded science and research labs in the nation; generating over $1.2 billion in net economic benefit in FY 2009. The more than 24 labs have contributed greatly to the evolution of Colorado’s bioscience industry. In total, these facilities accounted for 7,964 direct jobs and an additional 8,521 indirect jobs in FY 2010.
More than 24 federal labs and research centers are located in Colorado. Four of the federal facilities conduct bioscience related research.
- Centers for Disease Control and Prevention/Division of Vector-Borne Infectious Disease (CDC)
- National Renewable Energy Laboratory (NREL)
- U.S. Department of Agriculture’s National Center for Genetic Resources Preservation (NCGRP)
- U.S. Department of Agriculture, National Wildlife Research Center
It is important for Colorado to maintain these federal research centers to continue as a national leader in the bioscience industry and all high-tech sectors.
It is a top priority for the Colorado BioScience Association to maintain Colorado’s economic development incentives and retain our federal labs.
