Introduction
Recent circumstances have provided the opportunity to invest
in a new business in Colorado Springs City, Colorado. Debate over specific investment opportunities
having the most potential has prompted the need for investigation. Varying
population groups within Colorado Springs have significant influence on the
investment decision. Population groups concerning age, particularly young
children opposed to retirees being in question, as well as considering the
surge in the Hispanic population. In order to develop a business model that
fits the needs of the population demographic with the most potential in
Colorado Springs, several factors must be examined. Understanding the age
structure as well as the overall population breakdown of Colorado Springs
compared to both the state and country as a whole are the main goals of
investigation. Beyond examining the population structure of Colorado Springs it
is necessary to understand the overall cultural service sectors of the city.
Methods
The first factor in question concerns the age structure of
Colorado Springs. A population pyramid, created with data from the United
States Census Bureau, can be used to interpret the most predominant age groups
in Colorado Springs which should be considered in the investment.
In combination with the population pyramid calculating a
dependency ratio assists in identifying significant age groups. The dependency
ratio is a statistic displaying the ratio of dependents (ages younger than 15
and older than 65) to the working population (age 15 to 64). Calculating the
dependency ratio for Colorado Springs city, and Colorado state will determine
whether or not a large number of dependents exist in those areas.
Dependency Ratio: 100(population 0 to 14 + population 65 and
older) / (population 15 to 64)
- Colorado Springs: 100(87715.83 + 46412.745) / (291676.425) = 45.99
- Colorado: 100(1028985.129 + 588722.835) / (3501621) = 46.2
In addition to the population pyramid and the dependency
ratio, calculating a location quotient also provides valuable information concerning
population demographics. The location
quotient is a statistic calculating the difference between certain factors
across two locations, with a value of one meaning there is no difference. A
location quotient was calculated for several factors including the age group
0 to 14, the age group 65 and older, as
well as the Hispanic and white populations. Data for each of these factors for
Colorado Springs, El Paso County, and Colorado where calculated in comparison
to the data for the United States.
- LQ (Pop. 0-14) Co. Springs = 1.05 County = 1.1 State = 1.03
- LQ (Pop. 65.+) Co. Springs = 0.81 County =0.78 State =0.86
- LQ (Hispanic) Co. Springs =1 County = 0.93 State = 1.25
- LQ (White) Co. Springs = 1.08 County =1.1 State = 1.14
The final crucial factor for examination is the structure of
the service industries in Colorado Springs. Obtaining percentages of service
industries for both Colorado Springs and Colorado as a state allows for
interpretation concerning more popular industries in these areas, as well as
further comparison through another location quotient.
Service Industries
|
% Total State Industries
|
% Total Colorado Springs
Industries
|
Location Quotient
|
Finance
|
7
|
6.8
|
0.97
|
Professional
|
13.2
|
13.2
|
1
|
Educational
|
20.3
|
21.6
|
1.06
|
Arts
|
10.7
|
11.4
|
1.07
|
Other
|
5.1
|
6.2
|
1.22
|
Public Administration
|
5
|
6.4
|
1.28
|
Conclusions
Based on the results from the various forms of data several
conclusions are provided. The population pyramid, being the first form of data,
shows the largest age group present in Colorado Springs is the age group 20 to 29
at around 16% of the total population, followed by the age group 45 to 54 at
around 14% of the total population. This interpretation of the population
pyramid when used in correlation to the dependency ratio portrays similar
results. The dependency ratio for Colorado Springs indicates that only 45.99%
of the population is considered a dependent. Thus, more than half of the population
in Colorado Springs is considered to be working age which is reflective of the
predominant age groups identified by the population pyramid.
When considering the location quotients for the age groups
it is apparent that Colorado overall is very similar to the entire United
States in regards to the amount of 0 to 14 year olds. The age group of 65 and
older for Colorado overall is considerably less than the entire United States.
Therefore, these statistics also indicate these two demographics to be rather
insignificant in terms of being principal age groups in Colorado.
The location quotients for the race demographics showed
Colorado to have slight differences in terms of the white and Hispanic races compared
to the United States. When considering the white population in Colorado, the
location quotient of 1.14 shows that the state as whole has a slightly larger
white demographic than United States. However, the location quotients for the
Hispanic demographic appear much more significant. Although the location
quotient at the city and county level show the Hispanic population in Colorado
to be very similar to the United States, the location quotient of 1.25 for the
state as a whole indicates Colorado has a significantly higher Hispanic
population compared to the United States. The results produced by the location
quotients regarding the race demographics indicate the Hispanic population in
Colorado as a potential demographic in a business investment.
The last piece of data concerning the
service sectors in Colorado Springs and Colorado display an exceptional
percentage of service industries affiliated with education at over 20 percent.
Not only is education the leading industry in the entire state of Colorado, but
the location quotient indicates Colorado Springs has a greater percentage
within the industry compared to the entire state. The importance of the
education industry within Colorado Springs has a significant influence
regarding an investment decision.
Recommendations
When considering the conclusions made from the various forms
of data proposals regarding an investment decision can be made. The conclusions
established through the dependency ratio and location quotients for the two age
groups identify the working class as being the demographic with the most
potential in a business investment. In addition to establishing the working class
as a potential demographic in Colorado Springs, the population pyramid further identifies
the ages of 20 to 29 within the working age group as an even more specific age
demographic.
The age group of 20 to 29 in correlation with Colorado
Springs educational industry establishes a specific demographic as having the
most potential for a business investment. The importance of the education
industry in Colorado Springs is likely derived from the abundance of colleges
and technical schools in the area. The extensive amount of schools not only explains
the popularity of the education industry, but is reflective of the leading age
group being 20 to 29 as much of the group is likely composed of students.
Therefore, the demographic in Colorado Springs showing the most potential for a
business investment are college students
ages 20 to 29.
