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Sunday, September 19, 1999
High Tech Major Player in Economy
By Aaron Baca
Journal Staff Writer
Technology-based industry is playing an increasingly important role in New Mexico's economy
More tech-based businesses mean better jobs, better salaries and attracting or keeping valuable brainpower.
The shift toward technology-related businesses started in the 1950s after nuclear-weapons laboratories set up shop in Los Alamos and Albuquerque.
Slow and lacking shape at first, that shift has picked up steam and direction in the past 20 years -- particularly in the past 10. Enough so that the state's once blue-collar economy is changing colors -- to something a little closer to the silver and gray of silicon.
Today, New Mexico boasts having heavyweight technology companies such as Intel, Philips Semiconductors and AlliedSignal operating here.
But the state also is home to WaveFront Sciences, Muse Technologies, SBS Technologies and a host of other small technology companies.
At companies like these, advances in optics, avionics, electronics and software go from the laboratory to the marketplace.
"This is a community with a great deal of sophistication," says Gary Tonjes, president of Albuquerque Economic Development Inc., a nonprofit group that attracts new companies, particularly tech firms.
"We have a lot of technology here. This is a place that's not just worthy, but deserving of this kind of investment.
"Prosperity (in New Mexico) will be largely dependent on our ability to recruit and nurture these companies within the technology community," Tonjes says.
The state has had some success recruiting and nurturing some of these businesses, says Sherman McCorkle, president of Technology Ventures Corp., which was founded by Lockheed Martin in 1993 to assist startup technology companies.
"The reality is that our economy -- things here are changing," McCorkle says. "Agriculture is becoming less as a percentage of our total jobs and state product."
Figures recorded by the U.S. Department of Commerce's Bureau of Economic Analysis show a huge growth spurt for goods and services produced by technology companies from 1992 to 1996.
In 1992, agriculture and mining accounted for more than $3.3 billion of the total $31.9 billion gross state product -- or 10.5 percent. Technology-related businesses accounted for $3.6 billion -- or 11.2 percent.
In 1996, the most recent year for which data are available, agriculture and mining accounted for $3.9 billion -- or 9 percent of the $42.7 billion gross state product. Technology related companies jumped to $6.3 billion -- or 14.7 percent.
"Clearly technology and exports are growing in importance to our economy," McCorkle says. "The trend is toward knowledge-based businesses. Technology is the new economy."
New Mexico's growth as a technology state probably wouldn't be nearly what it is today if it weren't for the scientific brainpower at Sandia National Laboratories and Los Alamos National Laboratory. It also wouldn't be where it is if it weren't for the weight of Intel's major chip-making plant, which was lured to Rio Rancho in the early 1980s by generous tax breaks from the local government in Sandoval County.
"I think the labs (Sandia and Los Alamos) have certainly contributed to the businesses that populate New Mexico," says Dan Hartley, vice president of laboratory development at Sandia. "But Intel has had a huge effect, too. It came to New Mexico and consequently so did a number of those companies that support Intel as suppliers."
Hartley points to the Technology Transfer Act of 1989 as a catalyst of sorts that is partly responsible for fueling the new drive toward technology in New Mexico.
Before that, transferring technology developed at the laboratories was sporadic and often accidental.
"I don't know the specific numbers, but prior to that (the technology transfer act), I think we had one or two scientists a year who would break away and start a business."
Since the act, Hartley says, more than 60 former Sandia workers have left with licenses to market lab-developed technology, and about 20 companies have been formed as a result.
"Today, New Mexico technology is very strong in computers, biotechnology and nanotechnology (miniaturization)," Hartley says. "In each of these areas, the state has a huge investment.
"And what you have now is the potential to attract even more businesses in the same area."
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