So one would think there would be a host of cancer-related biotech and pharmaceutical companies thriving in Albuquerque. There is not.
I asked a friend who knows a great deal about both economics and UNM’s Health Sciences Center why places like Seattle, San Francisco and Salt Lake City have become hotbeds of medical commercialization and Albuquerque has not. A lot of the reason, he said, is simply a matter of scale. Stanford University has hundreds of medical researchers with experience commercializing innovations. UNM has fewer than a dozen.
Waneta Tuttle, who has created medical technology companies in Albuquerque, says much the same thing. She says there is a critical mass of researchers, entrepreneurs, financiers and business managers that has to be reached before a community starts spinning off new companies in any significant number. What that critical mass is, nobody knows, but we haven’t reached it yet.
The point is, a successful 21st century economy depends on bringing together enough smart people in an environment where they can prosper. Happily, more and more of New Mexico’s political, business, intellectual and educational leaders are embracing that concept and are looking for ways to make it happen.
This is a far cry from economic solutions offered as recently as last year’s legislative session. Then, the Legislature and the administration agreed to cut corporate income taxes and, effectively, to eliminate such taxes on any corporation that sells its production out of state (read Intel, read Ethicon). The goal was to make New Mexico competitive with states like Arizona and Oregon.
Since then, Intel has cut its New Mexico workforce. If Ethicon has increased production here, the company has been pretty quiet about it.
The Martinez administration says there has been some job creation as a result of the new tax treatment, but as the New Mexico Tax Research Institute has said many times, companies don’t locate someplace or expand operations just because of tax treatment.
Corporate taxation is pretty much meaningless to most startups, entrepreneurs and innovators anyway. Few establish the legal entities that pay corporate income taxes, preferring LLCs, sole proprietorships, partnerships and Subchapter S corporations. Those that do go the Subchapter C corporate route can be depended upon to lose money for some time, and you don’t pay taxes until you turn a profit.
This year is different. Gov. Susana Martinez asked the Legislature to consider several ideas designed to nurture the human capital we need if we are to achieve critical mass. Among the proposals was funding for top-flight university professors and researchers; more early-college high schools that accelerate students’ progress to college degrees; funding to help bring university and lab research to market; tax benefits for angel investors who help launch businesses; and several measures to expand the state’s health care workforce.
Santa Fe-based Think New Mexico came up with an agenda it hopes would create a climate where the entrepreneurs with the best ideas can thrive. Its proposals would give incentives to entrepreneurs who locate here, lower bureaucratic and regulatory barriers that inhibit them, and encourage businesses already here to expand.
516 ARTS, a gallery and exhibition space near Fifth Street on Central Avenue, this month launched a series of events to explore ways to “articulate and imagine a future for Albuquerque that resonates with optimism and possibility.”
Entrepreneur Stuart Rose has assembled more than a dozen bioscience entrepreneurs in an incubator he owns on Indian School NE near San Pedro.
UNM and City Hall are working together to create an innovation district in the city’s core, designed to bring together creative and innovative people in one place in an attempt to achieve that critical mass we’re missing.
(I’m on the record as being skeptical that the UNM/city effort requires investment in buildings, but any effort designed to help smart people succeed is worth considering.)
There is no telling which of these ideas and efforts will work, of course. What matters is that a significant number of public, private and nonprofit leaders see that New Mexico’s future depends on New Mexico’s bright and energetic people.