Recommendations

The following recommendations were developed by participants in small groups at the town hall. Then the entire town hall reviewed each other’s work, offered refinements, and ultimately voted on their level of support for each recommendation. All of the following items achieved a high consensus threshold, receiving support from 85 percent or the town hall.

Actively Support Small Business

Town hall participants recognized that small business and entrepreneurship play a vital role in the growth of the economy. When these sectors thrive, living standards improve, poverty rates fall, jobs emerge, wealth generates, and thriving companies stimulate yet more businesses. To make these advances occur in New Mexico, the town hall called for excellent small business training and financing tools, as well as improved coordination among both public and private sectors. Innovation remains a key to success, such as new technology solutions for expanded broadband, creative business incentives, and cultivating the next generation of entrepreneurs.

Recommendation 1: Resource Toolbox

ACTION: Develop a fully resourced small business development toolbox.

STRATEGIES:

  1. Market powerful tax and financial incentives for small businesses, placing as much emphasis as is devoted to large economic base industries.
  2. Promote resources and support to engage New Mexico small businesses and to recruit out-of-state small business leaders to the state.
  3. Improve access to capital, and explore micro finance alternatives, especially in rural, tribal and frontier areas.
  4. Encourage entrepreneurial thinking in K-12 curricula and establish, improve or expand community entrepreneurial incubators.
  5. Map, align and coordinate resources at all levels of government and across sectors to provide access to the small business development toolbox.

“We need to focus on getting and retaining small business in New Mexico. Right now there are a lot of barriers to entry. We need to get out-of-state businesses in and keep the ones we have so we are not losing them to other states.”- Ezra Baldwin, NYU Student, Albuquerque Native

Recommendation 2: Fund Innovation, Quality and Alignment

ACTION: Identify and provide adequate funding to support the growth of innovative business, quality jobs, and aligned skill set training programs.

STRATEGIES:

  1. Be first in the nation to adopt high-speed broadband statewide, using innovative means such as high altitude technology.
  2. Invest and reinvest in existing small businesses statewide (similar to the level of effort to recruit Tesla), to grow and sustain employment and thus increase the economic base; recognize the strengths of New Mexico small businesses, and improve them until they are nationally recognized.
  3. Study the impacts on small businesses of the anti-donation clause in the state constitution.
  4. Explore options for increased revenue, such as dramatically increasing exports.
  5. Establish incentives such as:
    1. A boomerang program to return the best and brightest to New Mexico
    2. Advancing the film industry with minimum regulation, leveraging the natural beauty of our state
    3. Incentivizing software development, similar to the strategies deployed to expand the film industry
    4. Providing a $1,000 incentive for every entrepreneur who remains in business for one year and employs at least one person.

  6. Develop and implement alternative measures for economic success that take a “multivariate approach” reflecting the complexity of the system; utilize these measures to inform resource allocation. (For example: As opposed to only measuring job creation, instead weave in secondary measures like quality of life or educational outcomes.)

Create Thriving Rural and Tribal Economies

The issues facing rural and tribal communities in New Mexico are significant. Non-urban areas make up the vast majority of the state’s land, so the town hall recognized that economically sustainable tribal and rural communities are key to our state’s overall future. To that end, they called for smart private and public sector investments in rural, tribal and frontier communities; most suggestions focused on using existing dollars more effectively rather than increasing government spending. In addition, people looked to the future, pointing out that rural and tribal areas will become increasingly vulnerable if the next generation migrates to cities. So the town hall recommended smart investments in youth programs that provide skills to help young professionals prosper in these smaller communities.

Recommendation 3: Invest in Rural and Tribal Communities

ACTION: Enhance public investment in tribal, rural and frontier communities.

STRATEGIES:

  1. Remove regulatory barriers that hinder access for small businesses and entrepreneurs to the New Mexico Local Economic Development Act (LEDA), the New Mexico Job Training Incentive Program (JTIP), and other economic development programs.
  2. Reserve a percentage of the New Mexico Catalyst Fund for early seed investments in startups to create a pipeline of qualified companies for venture capitalist investment.
  3. Remove regulatory barriers that impose unnecessary expenses or delays to public infrastructure projects.
  4. Eliminate policy barriers that prevent tribal, rural and frontier communities from accessing LEDA funds (i.e., requirements that smaller communities may lack capacity to meet).
  5. Encourage business-minded people to reside in rural or tribal communities by: [1]
    1. Creating a rural business corps to provide entrepreneurial education scholarships or loan repayment in exchange for relocating or returning to rural or tribal communities to build/expand businesses
    2. Incentivizing rural/tribal employers to offer tuition reimbursement or student loan forgiveness

Recommendation 4: Invest in Youth

ACTION: Invest in youth programs (in rural and tribal communities) that teach social, agricultural, financial, technical, vocational, organizational and employment preparation skills.

STRATEGIES:

  1. Create workforce pathways in all the areas described in the action statement above.
  2. Provide more resources to grow farm-to-school programs, such as Future Farmers of America, 4H, and similar projects.
  3. Expand the NM Youth Conservation Corps to increase the number of projects statewide that teach the skills listed in the action statement above.
  4. Identify youth programs with proven outcomes and follow-up monitoring to ensure effectiveness.
  5. Create a centralized “home” (or referral system) for identifying gaps, eliminating duplication and providing access within the wide array of existing social, financial, agricultural, technical, water management and conservation programs.
  6. Expand opportunities for youth to connect directly with employers, bridging skills development and employer needs (example of good model: ACE Leadership High School in Albuquerque).

Further Diversify the Economy

A diversified economy is one in which employment and revenue streams come from multiple industries. When jobs and revenues are concentrated in just a few types of businesses, a state’s economic stability becomes sensitive to volatile business cycles. New Mexico ranks seventh worst in the nation for industry diversification and we also operate within an unusual taxation system that is quite different from most other states. The town hall recognized that our tax structure makes it more difficult to attract new industries that would diversify the economy. Participants thus called for a major overhaul in the tax system, urging strategies that attract future businesses, meet state revenue needs and support families. The town hall also called for cohesive strategies to make economic development efforts more efficient, regionally integrated and consistently funded.

Recommendation 5: Restructure the Tax Code

ACTION: Comprehensively restructure the state tax code for the purposes of attracting and retaining current and future economic base businesses and supporting New Mexico’s families, while providing adequate revenue for state operations without disproportionately burdening low-income families.

STRATEGIES:

  1. Study and recommend reforms to the tax code, including broadening the tax base[2]
  2. Form and empower a commission with specific responsibility to:
    1. Develop a revenue model to evaluate a wide range of proposed changes to taxes individually and comprehensively
    2. Bring commission’s resulting proposal to the legislature
  3. Identify and articulate attributes for businesses and industries that need tax reform in order to attract or retain them.

Recommendation 6: Advance a Culture of Economic Development

ACTION: Create a culture of economic development with robust local and state funding.

STRATEGIES:

  1. Support economic development organizations locally to increase effectiveness and capacity for growing the economy.
  2. Promote regionalism in economic development efforts.
  3. Substantially increase and stabilize funding, specifically for economic development to become competitive with other states.
  4. Substantially increase the state's annual investment in economic base growth and projects, and establish metrics on the long term effectiveness of these investments.
  5. Refocus the New Mexico Partnership[3] to primarily work on generating business leads, thus enabling other state, regional and local economic development organizations to finalize subsequent relocation or expansion arrangements. The goal of this division of responsibility would be to minimize redundancies and increase effectiveness.
  6. Grow border economies by developing a statewide supply chain program to recruit Tier 1 and Tier 2 suppliers to New Mexico and connect them with industries on the U.S. side of the border that export to Mexico.

Advance Effective Roles of Government

The role of government on New Mexico is profound, both in terms of dollars and influence. The amount of state revenue that comes from federal, state and tribal sources plays a very significant role on our economic picture. Thousands of federally funded jobs and contracts contribute enormously to our state’s tax base through the national labs, military bases and healthcare services. Additionally, government affects our economy indirectly through regulation, permitting and authorizing varying budgets. The town hall called for reforms to make government more efficient, consistent and inclusive. Participants also want smart, straightforward pathways from “tech transfer” between government labs and the private sector – thus diversifying the overall economy.

Recommendation 7: Build Results-Driven Government

ACTION: Build a government that is results-driven, transparent, as well as effective for businesses and communities.

STRATEGIES:

  1. Review licensing and permitting requirements that limit access to occupations and hinder economic development.
  2. Provide sufficient and consistent long-term funding of proven effective programs, with established measurable goals for success.
  3. Facilitate broader public participation in government.

Recommendation 8: Improve Tech Transfer

ACTION: Design pathways and reduce barriers to transition technologies and ideas out of the national labs and universities to private industry or nonprofit sectors.

STRATEGIES:

  1. Identify more sources of capital for early stage companies, technology maturation funds for advancing nascent technologies, and pilot projects that demonstrate the technologies and ideas coming out of the labs and educational institutions.
  2. Identify, reduce, and/or remove roadblocks that impede commercialization of viable technologies, and encourage communication and partnerships between technical developers, businesses and/or nonprofits to facilitate commercialization.
  3. Empower individual entrepreneurs to protect and allow ownership of their ideas or patents, grant exclusive licenses, provide a safety net for individual risk, and avoid penalizing the entrepreneur for taking entrepreneurial leave.
  4. Periodically request that our federal congressional delegation and the labs report on their efforts to facilitate such transitions from the national labs to private and nonprofit sectors.
  5. Provide incentives to businesses for apprenticeship and mentorship opportunities and recognize those entrepreneurs who are taking risks of starting new endeavors and keeping them in New Mexico.

Focus on Family Economies

 

Town hall participants were keenly aware that more people in New Mexico live in poverty than in almost any other state. Even middle class families can find themselves struggling to make ends meet. All the recommendations above are intended to create jobs and thus indirectly support families, but one group at the town hall focused on the direct economic and social challenges facing families. This group – with endorsement from the full town hall – advanced the need for a “family-friendly culture” that helps people succeed, balances family and work obligations, and considers the needs of families (similar to the way we currently evaluate economic impacts) when developing new laws or regulations.

 

Recommendation 9: Advance Family-Friendly Policies

ACTION: Promote a family-friendly culture that helps people succeed, through the adoption, support and funding of family-oriented policies.

STRATEGIES:

  1. Increase investments in education from birth through adulthood, including financial literacy. Explore ways to decrease cost to higher education students.
  2. Support family caregivers, including consideration of paid leave.
  3. Include family impact considerations in the development of public policy.
  4. Eliminate disincentives to earning more income for people in poverty, such as “cliff effects” in work support programs (i.e., childcare assistance, Medicaid or SNAP).[4]
  5. Broaden availability and options for health care services.
  6. Incentivize employers to adopt family-friendly policies.

Strengthen the Workforce through Education

High unemployment, low job creation, high poverty, shrinking population, and limited education all present barriers to building a strong workforce. New Mexico is battling all of them. Without significant changes, by 2020, most New Mexico students will not have the education, credentials or degrees required to fill 63 percent of the state’s jobs. All six small groups at the town hall prioritized education and workforce development in some way. Fundamentally, the town hall called for excellence this arena – recognizing that New Mexico’s economy will grow if all our people carry the skills to succeed in the workplace. Suggested reforms focus on improved alignment between colleges and employers, major efforts to get students through school, renewed commitments to vocational training, financial literacy, and consideration of additional group processes that might unite efforts strategically and cohesively.

Recommendation 10: Align Workforce with Economy

ACTION: Align job creation, education and workforce development with the existing and emerging economy, while drawing on principles of equity to increase opportunities for a diverse workforce.

STRATEGIES:

  1. Effect a united, organized and well-funded effort by all New Mexicans to develop a workforce qualified to satisfy the needs of current and future employers and employees.[5]
  2. Identify and consider strategies that promote life-long academic success. Possible options could include: incentivizing high school graduation, paying some students to stay in school, mentorships, proactive advising, partnerships with businesses, paid internships or summer employment programs.
  3. Reform funding mechanisms to support and encourage diverse career and college pathways that reflect anticipated workforce needs and include all vocational, trade and certificate programs.
  4. Modify the state higher education funding formula to allow reimbursement for new, in-demand courses tied to new economic development efforts.
  5. Re-establish and fully fund vocational programs in K-12 public education, including rural and tribal communities.
  6. Align high school and two and four-year higher education curriculum and articulation (i.e. transferring credits between institutions).

Recommendation 11: Advance a Purpose-Driven Economy

ACTION: Develop New Mexico’s identity as a purpose-driven economy with a strong workforce, deploying an approach (such as “Human-Centered Design”) that enables individuals and communities to recognize, understand and overcome challenges through an action-oriented feedback and adjustment process.

STRATEGIES:

  1. Fund a “Design Thinking Process” to “inspire, ideate, implement and evaluate” high impact employment opportunities that include economic-based strategies, job creation, workforce development, education and family supports that protect everyone during times of economic insecurity. [6]
  2. Increase job creation by improving regulatory structures (i.e., tax structures, broadband, occupational licensing, tech transfer, extractive industries and renewable industries).
  3. Invest in early workforce education by improving K-12 reading, writing and math skills, as well as requiring financial literacy and career planning.


[1] This strategy was initially drafted as part of Recommendation 2 and was moved to the rural/tribal section for clarity.

[2] Part of this strategy was developed by the rural/tribal group and was drafted as part of Recommendation 3. It was moved here for clarity.

[3] The New Mexico Partnership is an organization contracted by the state’s Economic Development Department to support companies that are considering relocating or expanding in New Mexico.

[4] Both the family security and workforce development groups developed very similar strategies around cliff effects or other disincentives. They are combined in this report for clarity.

[5] This strategy was developed by the industry diversification group and was drafted as part of recommendation 6. It was moved here so it would be overlooked by implementation efforts on workforce development.

[6] “Human-Centered Design” is a term advanced by the Harvard Family Research Project. The related notion: “Design Thinking Process” is championed by Stanford University. Both approaches focus on defining the problem from the perspective of the user demographic. Ongoing testing is key so that participants can continue to learn and improve on initial ideas. (ReDesigning Theater, 2012)

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