No Better Time to Diversify New Mexico
Boosting Economic Development in the Land of Enchantment
The pandemic has changed everything. The world as we knew it will never be the same. In my opinion, economic development in New Mexico is key to helping our state thrive in the "next normal." The future will bring great opportunity, and the time to act is now. If we don't, the all-too-familiar story will prevail and we will again ask, "Why is New Mexico last on good lists and first on bad lists?"
I've often referred to New Mexico as the "hole-in-the-donut" state compared to neighboring states Texas, Arizona, Colorado, and Utah. These four all have prospered and grown with higher per capita incomes and lower unemployment rates and poverty rates. Meanwhile, New Mexico has struggled and literally been the hole in the donut. But in 2020 the pandemic shifted the way global business is done, now and forever. Massive supply chain interruptions during the pandemic exposed U.S. dependence on foreign countries that supplied critical infrastructure like pharmaceuticals, medical protective equipment, and microelectronics. New Mexico has an opportunity to capitalize on a new, global business model that relies on distributed supply chains, nearshoring to Mexico, and reshoring of critical infrastructure manufacturing back to the United States.
A major transformation accelerated during the pandemic is e-commerce. Pre-pandemic, e-commerce made up about 15% of all sales. Now e-commerce is the biggest game changer to the way we live since the introduction of the internet. Projected online sales could hit $1.5 trillion by 2025. One of the largest industries for the foreseeable future will be e-fulfillment. In Albuquerque, we already are seeing that demand with the huge Amazon fulfillment center and the Ben E. Keith distribution centers. Albuquerque and the region have space, affordable rents, and a ready workforce. Our fantastic weather, coupled with our state's lowest cost of renewable energy, are strengths that will resonate with companies looking to relocate and establish operations in states like New Mexico during the next normal. Now is our time to seize this market opportunity.
The pandemic has also further accelerated the advancement of Industry 4.0, robotics, additive/advanced manufacturing, artificial Intelligence. Our state has the talent and institutional support to help reset and diversify our state’s economy for the future. The University of New Mexico, New Mexico State University, New Mexico Tech, and Central New Mexico Community College are all affordable places for cutting-edge research and quality education. The three national labs, Sandia, Los Alamos, and Air Force Research are just a few of the excellent places for our state’s (and beyond) young minds can head after graduation.
In 2021, the Albuquerque Regional Economic Alliance (AREA), formerly known as Albuquerque Economic Development, was led through a strategic planning exercise by President and CEO Danielle Casey. The exercise and insights have really stuck with me. It was amazing to see what can happen when silos are dismantled, and when people and organizations work collaboratively instead of competitively. AREA’s member organizations and partners make up half of New Mexico's industries. Together, we can develop actionable plans that make a marked difference for generations. Economic development in New Mexico is important work.
If we as leaders, organizations, and people are committed to changing our state’s trajectory, we can achieve meaningful progress towards a positive quality of life and economic outlook for all New Mexicans. Diversifying our state’s opportunities should be at the forefront of our minds. If ever there was a time for New Mexico to thrive, this one is ours.
This piece was previously featured as an editorial in Albuquerque Journal.
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