The Space Economy Is Growing, and Colorado With It

The new space economy is all about discovery, satellites and software. Colorado is establishing itself as a global leader in the burgeoning industry, but what does this mean for state residents?

The state of Colorado made national headlines in 2023 when it was confirmed as the permanent home of the United States Space Command, the headquarters of the U.S. Space Force (USSF). The U.S. Space Command, located in the city of Colorado Springs, joined four other military installations and the U.S. Air Force Academy bringing 1,400 jobs and an estimated $450 million in annual economic revenue to the city. 

This is not the Centennial State’s first bid to establish itself as a leader in aeronautics and innovative technologies. Just five years earlier in 2018, the Federal Aviation Administration (FAA) approved the licensing for the Colorado Air and Space Port, making this the first space port in Colorado and one of just 14 across the country. 

Colorado has cultivated its aerospace industry for more than 70 years. Building upon its history as a leader in aviation technology, the state is now turning its attention to attracting companies and fostering talent in the space industry. One notable city in this development is Colorado Springs.

Located 70 miles south of Colorado’s capital, Denver, Colorado Springs is the state’s second-most populous town, with just over half a million residents. According to the city's Chamber of Commerce, more than 250 private space and aerospace companies currently operate there, contributing more than $3 billion annually to the local economy and holding an 8% industry share of the nation’s total GDP.

The city has long been known as a military town, but with a record number of Economic Development Agreements approved by local government bringing thousands of private companies and specialized, high-paying jobs in the space industry to Colorado Springs, that perception may be changing.

“You look at the ecosystem that we have here,” said Jim Lovewell, Chief Operating Officer for the Colorado Springs Chamber and Economic Development Commission to local media KOAA. “It's natural that large companies, mid-sized companies, small companies, and small startups would like to come here.”

While aerospace includes work within the Earth’s atmosphere, the space industry reaches beyond to include rockets and shuttles, satellites, surveillance, telecommunications, cyber operations, and even renewable energy and environmental regulation. Previously, government entities were the nearly exclusive investors in this sector, but with the rise of reliance on satellites for telecommunications and cyber security, private companies are making significant strides in the industry around the world.

The World Economic Forum suggests the global space economy will be worth $1.8 trillion by 2035. With a concentration of talent and existing infrastructure, industry leaders are looking at Colorado as the next “Silicon Valley” of space.

Thanks to economic developments, military installations, and state-sponsored tax credits and corporate incentives, Colorado is already the nation’s second-largest space and aerospace economy behind California and first in concentration of talent. The sector saw 32% growth from 2017 to 2022, with a $4 billion payroll shared between 37,000 employees—nearly half of whom reside in the city of Colorado Springs. That number extends to more than 100,000 when auxiliary positions are included.

Aiding in this development is the Colorado Space Coalition (CSC), a group of industry leaders and stakeholders working alongside the local government to make Colorado “a center of excellence for aerospace.” 

“Colorado is what we call an ‘and market,’” said Morgan Alu, Director of International Development special projects at the Metro Denver Economic Development Corporation and co-leader of the CSC. “People can have a good career and a good quality of life.” He suggested that this factor makes Colorado an attractive place both for businesses and employees.

Jen Morin, Head of Talent Acquisition at Sierra Space said being headquartered in Colorado offers their company unique advantages in accessing a diverse and highly skilled workforce. Sierra Space specializes in next-generation space technologies and employs nearly 2,000 people in Colorado.

Like many of these private companies, Sierra Space works heavily on contracts for the U.S. Department of Defence (DoD) on projects for the USSF. This government partnership provides private contractors unequivocal financial backing and the ability to offer higher-than-average salaries to workers.

Earlier this year, Omni Federal, another leader in the space and innovative technologies sector and private DoD contractor, announced 500 new jobs coming to Colorado Springs. The average salary will be $150,000 a year—238% higher than the average pay in surrounding El Paso County.

The increase in high-paying jobs is raising the average salary in the region. Most recent statistics say the median household income in Colorado Springs was $79,026 in 2022, a 9.82% increase from the year before and nearly 6% higher than the national median, according to census data. 

“Much of the recent job growth in Colorado Springs has come from defense contractors,” said Wayne Heilman of the Colorado Springs Gazette. “The jobs pay wages above the area’s average wage and are expected to trigger additional job growth in the rest of the economy as spending by new hires creates jobs at retailers, restaurants and other businesses.”

This development is contributing to Colorado Springs's rising population. Census data shows a 15% growth between 2010 and 2020. Between 2021 and 2022, Colorado Springs outpaced other metropolitan areas with a 0.91% increase compared to a 0.37% growth rate in Los Angeles in the same year.

Located at the scenic base of the Rocky Mountains, Colorado Springs boasts a bounty of outdoor activities, urban parks, family-friendly opportunities, and walkable neighborhoods. The city is consistently ranked on national lists of best places to live.

Despite the availability of higher salaries for some, others are feeling the strain of a rapidly growing city. While average incomes have increased, they have been imbalanced among residents and have not kept pace with rising costs of living. 

The cost of living in Colorado Springs has soared 5% higher than the national average, and the median price of a single-family home is nearly $520,000—more than 25% above the U.S. average.

According to the Colorado Springs Housing Affordability Report 2024, the cost of purchasing a home in the city has increased by 82.6% in the past ten years. Hourly wages, by contrast, have increased just 38% in that same period.

Mercede Ragghianti is a local realtor who’s noticed a shift in the housing markets. “Affordability is extremely hard right now for a lot of people,” she said. “We get a lot more out-of-state buyers”

Census data shows that nearly a quarter of a million people moved to Colorado in 2022 from other states, namely California, Texas, and Florida. Exacerbated by the growing prevalence of remote work in recent years, an influx of transplants has left more expensive urban areas to take refuge in Colorado’s relative affordability—much to the chagrin of native residents.

“As a native, I'm a bit annoyed over just how many people are flocking here,” wrote one user on the social media site Reddit in a community discussion. “But I can't blame them. This really is a beautiful place.”

What may have once felt like a “best-kept secret” to locals has become a magnet for companies and workers looking to take advantage of the city’s growing infrastructure.

Keith Hasselstrom moved to Colorado Springs from Washington, D.C., for work. He’s a Senior Software Engineer with Frontier Technology, Inc., a notable defense contractor and leader in the Colorado space industry. He cites the local community and better cost of living as top reasons for his relocation. 

“Working in Colorado has been beneficial for both my career and quality of life,” he says.

While many agree Colorado Springs is a desirable place to live, a large portion of the population is drowning under the increasing cost of living. For those in more average-paying careers and without the benefit of a corporate relocation incentive, the price of housing is daunting.

“I'm shocked at the cost of houses,” said lifelong Colorado resident Steve (no last name given). He moved to Colorado Springs five years ago and is actively looking to purchase a house. “With the interest rates now, I qualify for $320,000, and in this town, that doesn't by much.”

The house across the street from Steve recently sold for $50,000 over the asking price to a family from out of state. 

“You have to have some kind of earned wealth of a killer salary to buy in Colorado,” he said. “I have neither.”

State legislators have prioritized recruiting lucrative companies to operate in Colorado, but more will need to be done to address the growing gap between the state’s highest earners and its lowest. While the conversation is active, progress is lagging.

“It's been a problem for a long time,” said Alu. “Not all of our elected officials or legislators actually see eye to eye.”

Despite the challenges in housing and affordability, the space economy is growing, and Colorado with it. As more businesses continue to expand into the state, hubs like Colorado Springs will benefit from the economic boost, demand for specialized talent, and global attention. 

Graduate journalism coursework, Harvard University / 2024