A major economic corridor has opened up between the UK and the US state of Colorado – but the numbers behind it tell a troublesome story.
New figures, seen by Prolific North, found UK tech firms have invested $1.5bn into Colorado over the past five years, generating an estimated 19,400 jobs. But in return, Colorado businesses have only channelled $1.3bn into the UK, creating just 3,765 jobs.
As part of Prolific North’s GRAFT series looking into the future of Northern tech, we have crunched the numbers and discovered a £200 million investment shortfall and a job creation rate six times lower on UK soil – and virtually nobody is talking about it.
READ MORE: Why Northern tech firms are flocking to the ‘Mile High City’ of Denver for expansion
Despite a Memorandum of Understanding (MOU) signed in January – aimed at “supercharging” growth between the two regions – the flow of opportunity appears uneven, and largely under the radar. While Colorado is reaping the rewards of UK-led job creation, tech leaders in the North are questioning whether enough is being done to keep high-growth firms scaling at home.
Colorado exported $230m worth of goods to the UK last year – from motors to data processing machines – while importing $256 million in return. While trade flows remain healthy, the job opportunities and investment data increases the pressure on the UK government to deliver on its promise of economic growth.
A number of tech firms are eyeing expansion elsewhere in the US too, while squeezes on UK businesses such as the recent increases in employer National Insurance contributions and the National Living Wage are adding to the strain.
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Data integration platform Matillion, which is dual-headquartered jointly between Manchester and Denver, has around 150 of its 400 staff based in the US. Co-founder Matthew Scullion says the business climate in the UK is becoming tougher.
“There are quite a lot of headwinds in building our teams here in the UK at the moment with employer and NI changes,” he tells Prolific North.
“We’re building our engineering team in Hyderabad, India at the moment, and the people are just as good. They will do the same, high-value work. Making UK employees more expensive isn’t great for encouraging businesses to hire more of them here in the UK.”
Anita Frost, founder of Green Bean Studios, praised Denver’s “risk appetite” and attractive opportunities, admitting she has considered a move to the US to tap into its incentives.
The temptation of Colorado lies in performance-based incentives like the Job Growth Incentive Tax Credit, which refunds 50% of FICA taxes per new job, and the Strategic Fund Job Growth Incentive, offering cash for new job creation and maintenance.
One of the most recent tech firms to take advantage of these incentives is online gaming giant Bet365.
READ MORE: How Northern tech is “grafting” its way to the top with global ambitions
Backed by $14 million in a performance-based Job Growth Incentive Tax Credit over the next eight years, Bet365 has pledged to create nearly 1,000 jobs in the ‘Mile High’ city after opening its US headquarters in Denver last year.
“Colorado shares a robust and enduring economic partnership with the United Kingdom, marked by significant trade, substantial foreign investment, and collaboration that furthers key industries in both regions,” a spokesperson for the Colorado Economic Development Commission, tells Prolific North.
“We are committed to strengthening and growing our relationship to continue fostering pathways for investments into Colorado and UK businesses, stimulate economic growth in both our regions, and create good-paying jobs.”
READ MORE: ‘Why I’m moving to Manchester to scale my AI business’
The UK government has recently taken action to support businesses, providing 40% business rates relief next year with the introduction of a permanent, new lower business rate from 2026.
Businesses and charities will still be able to claim employer NICs reliefs, including those for under 21s and under 25 apprentices, where eligible.
A spokesperson for the Department of Business and Trade said: “This pro-business Government will always look to explore ways to strengthen UK-US trade ties, including in Colorado, and support economic growth through our Plan for Change alongside our Industrial and Trade Strategies.
“Global investors should be in no doubt that under this Government, Britain is the best place to do business as demonstrated by the £63 billion of investment announced at our International Investment Summit, turbocharging growth and innovation in the North and across the whole country.”
Peter Hopton, founder of Venture.Community which aims to advance the development of hundreds of tech companies in South Yorkshire, believes the UK has its unique strengths and that these figures don’t entirely tell the full picture.
“I’d highlight that we have a lower cost of living and a high quality of life in the UK. There are a lot of values that we hold such as socialised health care and so on that the Americans don’t have.”
After living in America, and previously spending a lot of time in Colorado, it’s probably one of the places in the US “that would be high up” on his list to move to.
“It’s a nice place to live. Obviously, people are going to receive higher salaries. There is a valuation gap between the US and UK. But currently, there are some big geopolitical issues and there’s a lot of uncertainty over there. At the moment, we have the best tax incentives for angel investing on the planet.”
From how “anyone” can become an angel investor and receive tax refunds, to how “attractive” SEIS and EIS schemes are, there’s a “real opportunity” for Northern firms here. And that’s part of the reason why he founded Venture.Community.
“We actually have quite a lot of wealth, but we send it off to the city, to go into some fund. By the time the money comes back, if it ever comes back to the North, there’s not much left.
“I think that there’s this massive potential around connecting the funds that we do have in our pockets, using these tax benefits to invest in our communities and in our start-ups.”
At Prolific North’s GRAFT event on 21 May, as part of Digital City Festival, we’ll bring the debate to life with inspirational leaders confronting challenges like this head-on.
