Recovery 1.1: battered by 9/11 and dot.com flameouts, Colorado's tech industries show signs of revival.

AuthorSchley, Stewart

Los Angeles transplant Lisa Wilson built her Colorado public relations company to more than $1 million in yearly billings by catering strictly to hightech clients riding the boom of the new economy. But the combination of the dot.com bust and the economic devastation resulting from the terrorist attacks of 2001 nearly did her company in. "Within about six months after 9/11, every single client we had was either completely out of business or had completely lost their funding," says Wilson, the owner of VisiTech PR in Denver.

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She wasn't alone. Four years ago, Colorado's booming high-tech economy went sour as a poisonous mix of macro economics and corporate mergers sucked hundreds of millions of dollars, and thousands of jobs, out of the market.

From 2002 to 2003, Colorado lost 14,700 high-tech jobs, or about 8 percent of the state's total, according to the American Electronics Association. Investment money dried up, too. Venture-capital funding of Colorado software companies plunged from a high of $305 million in the first quarter of 2000 to $13 million in the first quarter of 2004, according to PricewaterhouseCoopers.

But Colorado's four-year hangover from the heyday of Y2K now appears to be lifting, at least in the software sector, where a new breed of technology entrepreneurs and survivors has arisen. They're not as flashy as some of their dot.com predecessors, and most are obscured from the public stage because they concentrate on vertical markets unfamiliar to everyday Coloradans. But stretching from Colorado Springs to the Denver-Boulder corridor are thousands of software companies that represent a renaissance of Colorado's information-technology sector. Many of them are adding jobs, investing capital, generating profits, and restoring Colorado's high-tech luster.

"Colorado is really an entrepreneurial hotbed for e-business startups," says Richard Scudder, an associate professor of information technology at the University of Colorado-Denver. One sign of a revival: All 10 of the graduates from the school's Master's Degree program in information technology got jobs in 2005. "In years past, it wasn't that good," says Scudder.

Software isn't the only component of Colorado's high-tech economy, of course. The state remains an important base for high-tech manufacturing companies and aerospace titans like Lockheed-Martin Corp. Plus, a rising level of biotechnology investments is raising the state's profile in that...

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