Clients often ask about our local economy in Colorado Springs, like what makes it strong? My answer is always the same, "our economy is 50% military, with powerhouses like the Air Force Academy, Peterson AFB, Shreiver AFB, and Fort Carson Army Base here. In addition, we have quite a few defense contractors based here." Although our recent government sequestration has had an impact on all of these, locals feel optimistic that it will only strengthen defense locally.
According to the Denver Post on April 7th, writer Kristen Leigh Painter says "COLORADO SPRINGS-With a heavy concentration of military bases and defense-related businesses, it is not a matter of whether federal budget cuts will hit Colorado's second-largest city but a matter of how hard.
However, some area business and political leaders, while bracing for economic bleeding, see an opportunity to recast the city's economic future. Through a combination of nimble strategizing and aggressively targeting competitors for acquisition, a handful of companies operating in the shadow of Pikes Peak are hoping to position themselves and the city on a growth path.
"It is kind of one of those Charles Dickens moments: 'It was the best of times, it was the worst of times,' " said Andy Merritt, chief defense-industry officer for the Colorado Springs Regional Business Alliance.
The pride of Colorado Springs has long been its robust defense industry. With the fallout from budget cuts now happening, the "worst of times" is self-evident.
The across-the-board trimming of federal spending — ranging from 2 percent to 8 percent among programs and called sequestration — is because Congress and the White House haven't come up with a deficit-reduction plan. The defense budget is absorbing half of the cuts.
El Paso County receives about 1 percent of the U.S. Department of Defense's $600 billion budget — a disproportionately high percentage for a single county.
The four largest employers in the city are the military installations at Fort Carson, Peterson Air Force Base, Schriever Air Force Base and the U.S. Air Force Academy.
Thousands of civilian employees are preparing for federal furloughs while several defense and aerospace contractors have made mass layoffs after losing U.S. government contracts.
But in the midst of the discouraging news, several leaders in the Springs see an unusual opportunity afforded by the fiscal constraints.
"This is a very disruptive time. ... It is a crossroads; it is a turning point in our industry," said Jay Jesse, president of Intelligent Software Solutions in Colorado Springs. "I have a ton of optimism that we are part of the solution, not part of the problem."
Jesse, a vocal critic of Washington's fiscal habits, is surprisingly optimistic about this moment in time for his city.
"If you look out over the next several years — forget sequestration — we are one of the states that depends on defense and aerospace, and we are proud of that. We were propped up on that during the tough economy, and now the shoe is on the other foot," Jesse said. "This is bad for the economy and the industry, but it could be very good for a company like ISS in the long run."
ISS and Colorado Springs-based Braxton Technologies are not the largest defense contractors — ISS has 475 workers in the city and Braxton has 67 — but they are well-positioned to capitalize on the sequester."
