The aerospace and defense industry has remained a consistent bright star as Colorado\u2019s slowing economy struggles with remaining competitive. Yet the state could get outshone if it doesn\u2019t take action soon.<\/p>\n
At least, that\u2019s what major business organizations are warning state leaders.<\/p>\n
Recommended Stories\u25b6<\/p>\n
The Colorado Chamber Foundation and the Colorado State Coalition both released reports this summer warning the state is at risk of falling behind other large aerospace hubs, finding Colorado has weak points in its supply chain and its regulatory-heavy business environment is slowing the industry.<\/p>\n
![\"051523-news-SpaceGuard](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/09\/675871ffb9e87.image_.jpg\")
FILE PHOTO: Members of the 138th Space Control Squadron from Colorado and Air National Guard members from Mississippi guide and load a large collapsible satellite antenna. The state\u2019s military bases are one of the reasons why Colorado is a major aerospace hub. (Jerilee Bennett, The Gazette file)<\/p>\n
\u201cColorado has built one of the most complete aerospace and defense ecosystems in the country, from research and startups to major contractors, manufacturers, military missions and satellite operations,\u201d said Rachel Beck, executive director of the Colorado Chamber Foundation, in a news release this month. \u201cWhile this foundation gives us an extraordinary opportunity as the global space economy expands, that leadership cannot be taken for granted.\u201d<\/p>\n
In-article OneAdvertisement<\/p>\n
The state needs to be \u201cproactive,\u201d Beck added.<\/p>\n
While Florida is known for launching rockets and Houston for mission controls, the Front Range has positioned itself as a hub for research, manufacturing and satellite operations <\/a>because of the advantages of its central location, higher elevation and cluster of major research institutions and military bases.<\/p>\n Major defense contractors, such as Lockheed Martin and BAE Systems (which acquired Broomfield-based Ball Aerospace), have built large campuses in the state and several startups that have sprung up in Colorado have gone public as billion-dollar companies like York Space Systems, Voyager Technologies and soon Ursa Major.<\/p>\n The industry supports more than 61,000 jobs in Colorado and $14 billion for the state\u2019s gross domestic product, according to the Colorado Chamber Foundation\u2019s report prepared by consulting agency Economic Leadership.<\/p>\n In-article TwoAdvertisement<\/p>\n Weaker business environment?<\/p>\n While Colorado has a good concentration of aerospace and defense companies, the Colorado Chamber Foundation found job growth has flattened and other states are rising in their competitiveness <\/a>and are \u201cpursuing the same opportunities more aggressively than Colorado.\u201d It also found the weaker business environment affecting other industries in the state is starting to have an effect on Colorado\u2019s aerospace industry.<\/p>\n During the 2010s, Colorado had lower operating costs and a boom in net migration compared to coastal hubs, such as California, Florida, Texas and Washington. But over this decade, the state has slipped in the rankings.<\/p>\n The organization gave 18 recommendations for state leaders to take \u2014 from better marketing, more engagement from the governor\u2019s office, improving permitting, expanding the state\u2019s incentive packages for defense companies and pushing for more job training programs and addressing the state\u2019s high cost of living to keep the talent it has.<\/p>\n In-article ThreeAdvertisement<\/p>\n The Colorado Space Coalition, an organization under Metro Denver Economic Development Corporation, also released a preliminary study with McKinsey & Company in July showing competitor states like Virginia, Florida, Oklahoma and Texas are expanding faster than Colorado.<\/p>\n Shift in federal government funding<\/p>\n The aerospace and defense industry has been booming as the federal government has shifted its strategy in giving out contracts, emphasizing companies to develop more of their own technology and prioritizing faster and more innovative products, Parker White, director of the Colorado Competitive Council, told The Denver Gazette when the report was released.<\/p>\n With that, White said smaller and midsize companies are now winning contracts that would typically go to big defense contractors. There\u2019s also been an influx of private investment to create unicorn companies that are changing who the biggest players in the industry are.<\/p>\n In-article FourAdvertisement<\/p>\n \u201cAs these new companies take shape and these new models of doing business take shape, the landscape of the business ecosystem is shifting,\u201d White said.<\/p>\n These changes spurred the Colorado Space Coalition to conduct its study, which found the industry was growing faster in business-friendlier states and Colorado needs to invest in closing gaps in the supply chain.<\/p>\n \u201cWhen you look at what those states are able to provide, the biggest thing they offer is a very, very friendly business environment,\u201d he said. \u201cWhen you move beyond those pieces, they offer the ability to grow and expand at relatively low costs compared to what that growth and expansion would cost here in Colorado.\u201d<\/p>\n Another problem is that Colorado-based companies are winning contracts but are then fulfilling those deals by subcontracting their services outside of the state, he said.<\/p>\n Colorado does really well in the upper-midtier of the supply chain, which includes software engineering, assembly and developing space systems, White said. Due to its landlocked geography, the state can\u2019t compete with launches.<\/p>\n But the state could do more to fill in gaps in the earliest stages of the supply chain from extracting raw materials to boosting manufacturing. White explained that filling those gaps will be necessary, regardless of the state\u2019s business friendliness.<\/p>\n \u201cThose downstream suppliers will always have a place because no matter where the policy goes, we know that someone will need to supply whatever they\u2019re building with something,\u201d he said.<\/p>\n This is also supported by the Colorado Chamber Foundation\u2019s report. The state has the highest concentration of aerospace workers compared to peer states, yet manufacturing was the lowest of all the industries for Colorado.<\/p>\n \u201cThe lack of a strong manufacturing presence was limiting growth in aerospace,\u201d the report said.<\/p>\n Finding aerospace labor to meet demand<\/p>\n Still, all the reports note how Colorado ranks high for its talent pool developed by its concentrated ecosystem and its leading universities.<\/p>\n But even getting the talent is becoming a challenge.<\/p>\n Matt Maga\u00f1a, Voyager\u2019s president of space, defense and national security, said demand is skyrocketing in the aerospace sector. Finding labor to meet the demand is getting harder, he said.<\/p>\n The company generated $52.7 million in the second quarter, according to its latest earnings report, up 51% from the first quarter. Voyager is seeing demand across several aspects in the wider aerospace industry: propulsion, advanced electronics, autonomous mission systems, artificial intelligence technologies, commercial space and projects tied to President Donald Trump\u2019s initiative to build the \u201cGolden Dome\u201d missile defense system.<\/p>\n Colorado has developed its aerospace ecosystem a lot in the last 10 years, Maga\u00f1a said. But it could fall behind like in Southern California, where there\u2019s a \u201cmecca\u201d of aerospace engineers and struggles with attracting more talent to meet that demand.<\/p>\n \u201cTo keep pace with feeding all of those companies with high-end talent is a pretty tall ask,\u201d Maga\u00f1a said.<\/p>\n Colorado needs to improve its high cost of living to ensure it can keep its workforce and attract new workers to live in the state, the reports recommend.<\/p>\n Over the last year, state leaders have had to offer millions in tax incentives to keep several Colorado space companies from leaving the state for their expansions. Even Voyager.<\/p>\n Berthoud-based Ursa Major secured $35 million in job growth tax incentives <\/a>and $23 million in CHIPS refundable tax credits from the Colorado Economic Development Commission if the company can uphold its goal to create 1,850 new jobs for the state within eight years. <\/p>\n Denver\u2019s Voyager Technologies is growing its headquarters and the commission awarded it $920,000 to prevent it from choosing another state like California, Alabama or Arizona<\/a>. One unnamed aerospace company looking to expand in Douglas County got $26 million in tax incentives.<\/p>\n
![\"A](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2026\/09\/AP26033511470110.jpg\")
A full moon is seen shining over NASA\u2019s SLS (Space Launch System) and Orion spacecraft, atop the mobile launcher in the early hours of Sunday, Feb. 1, 2026, at NASA\u2019s Kennedy Space Center in Florida. (Sam Lott\/NASA via AP)<\/p>\n