Sunday, September 12, 2010

The Competitive Threat to the Denver Region from Salt Lake City

Both the University of Colorado and the University of Utah are joining the Pac-10 conference in the next two years. Colorado, the first school to receive the invitation was a key prize in the Pac-10's expansion, long courted by the conference along with the University of Texas. Utah, was almost a consolation prize. Less prestigious and less of a traditional football power than Colorado, the Salt Lake City based university was only offered membership after a Texas-led coalition turned the Pac-10 down.

However, the actual current competitive athletic balance between the Universities of Colorado and Utah in the key revenue generating sports of football and men's basketball favors Utah. In fact, today, its not an exaggeration to say that Utah has an overwhelming (and embarrassing) competitive advantage over Colorado as the two schools prepare to join the Pac-10 and renew their "natural geographic rivalry."

This story about competitiveness in intercollegiate athletics can also be seen as a potent analogy about economic competitiveness between the two regions and should serve as a warning to civic leaders and public officials in the Denver region.

People in Metro Denver are used to thinking about Salt Lake City like a much younger sibling, sharing some of the same family traits but not as fully developed and not a real threat to the Denver region's status in the world. Economic development officials in Colorado have targeted recruitment efforts and marketing campaigns in California, Arizona and Texas but have not focused as heavily on Utah.

However, from my very first blog entry more than three years ago I have been contemplating the regional competitive threat that Salt Lake City posses to Denver's economic vitality. The two region's are far enough apart that there is not much beneficial spill over of economic activity from one to the other but at the same time are geographically close enough together in the Mountain Time Zone that they can serve as substitutes for each other. Utah has outstanding recreational amenities --world class skiing is closer to Salt Lake City than it is to Denver. Salt Lake City has raised its international profile by successfully hosting a Winter Olympics while Denver shirked its earlier opportunity. The possibility that the merged United-Continental will shrink its Denver United hub while retaining or growing its Salt Lake City Continental hub is a real threat to Denver International Airport. Additionally economic development gurus have recently been citing Salt Lake City as a top technopole. In the Milken Institutes's report, The Best Performing Cities of 2009, Salt Lake City is the number 3 ranked best performing large city but Denver is only 55 (Fort Collins and Boulder are 22 and 44 respectively).

Denver's long term economic vitality is dependent on competing globally for capital investments, talent, corporate jobs and headquarters. The Front Range's global competitiveness will be undermined if it has to play second fiddle in its home region in the Rocky Mountains.