Colorado could be the winner of the new space race, if it can capitalize on the leading aerospace companies, research institutions and military assets in the state while weathering sweeping changes in the industry, according to a major industry report released Tuesday.

The report, titled "Launch! Taking Colorado's Space Economy to the Next Level," was produced by the Washington, D.C.-based Brookings Institution Metropolitan Policy Program with the participation of the Colorado Office of Economic Development and Trade.

The report found Colorado's "space industry" employs more than 66,000 workers in military, civil and private domains and added $8.7 billion in value-added output in 2011. The industry generated 3.8 percent of the state's private-sector gross domestic output, the report said.

The report broadly defines the industry, which includes private companies such as Longmont-based DigitalGlobe Inc. and research centers such as the Laboratory for Atmospheric and Space Physics at the University of Colorado-Boulder. It also includes military bases, such as the U.S. Air Force Space Command headquarters outside Colorado Springs.

The disproportionate place the space industry has in Colorado could be an asset, but if the industry doesn't adapt to less federal dollars and the rise of new competitors and business models, it could falter, according to the report.

Emerging trends include a changing customer base that relies less on government programs and more on providing services to private companies, the report said. Colorado's dependence on military and civilian government contracts could leave it exposed to budget cuts.

"Although Colorado firms badly need to pivot into emerging new markets that are less dependent on federal support, the state space industry has not moved aggressively in this direction as yet and actually lags on some indices of competitiveness when compared to its peer states," according to the report.

Colorado also is lacking in venture capitalists looking to invest in space and a looming shortage of engineers as the workforce ages and retirees aren't replaced.

To retain its position, companies in the state must continue winning government contracts while continuing to innovate.

"Colorado's goal over the next five to 10 years should be simple and bold: Become the dominant center of innovation for the global space economy. However, achieving that goal is going to require a new, more commercial and entrepreneurial mindset as well as unprecedented commitment and collaboration at a moment of stepped up competition," said the report's lead author Mark Muro, a senior fellow and policy director of the Brookings Metropolitan Policy Program.