Since the 1950s, New Mexico’s economic base has had two legs: oil & gas and the federal government. None of our efforts to create a third leg – to actually diversify our economy – have been successful. So how does a state create a diverse, broad-based economy? An economy fueled by economic-base jobs? An economic base job is where the value of the output is greater than the value of the input and the goods produced generate new revenue.
The answer is not partisan, political or divisive. The answer is innovate. And while innovation takes many forms, a series of economic studies conducted over the years has shown that between 50% and 85% of the growth in U.S. GDP is attributable to advancements in science and technology. This, despite the fact that less than 5% of the U.S. workforce is composed of scientists and engineers. This suggests that each 1% of the workforce engaged in those professions accounts for 15% of the growth in GDP.
New Mexico knows our science and technology jobs are the envy of the marketplace. In the Sandia Science and Technology Park alone, the average salary is more than twice the average New Mexico salary. New Mexico is perhaps the richest of America’s 50 states in science and technology assets, as evidenced by the Air Force Research Laboratory, Los Alamos National Laboratory, New Mexico State University, New Mexico Tech, Sandia National Laboratories, University of New Mexico, UNM Hospital, White Sands Missile Range and Army Research Laboratory.
A new and emerging technology that will dominate for decades is renewable energy. We have an opportunity to expand our renewable energy portfolio and technology jobs with the merger of PNM and Avangrid. Avangrid is the U.S. subsidiary of Iberdrola, one of the world’s largest utility companies. In addition to the 150 high-paying jobs Avangrid has already committed to bringing, the company will conduct important solar- and wind-power research and development right here in New Mexico.
Because of its innovative technology, last week Avangrid was awarded the first-ever off-shore wind powered contract near Martha’s Vineyard. Their project will provide enough electricity to power more than 400,000 homes and businesses in Massachusetts, reduce electricity rates by $1.4 billion over the first 20 years of operation and is expected to reduce carbon emissions by more than 1.6 million metric tons per year.
To diversify our economy will require a long-term, multi-year, highly focused effort. Transforming science and technology into economic goods is not new; the intensification and complexity of innovation, is.
For us to thrive, we must create, promote and mature the capitalization of the innovation and knowledge process, thereby creating economic base jobs. The Avangrid/PNM merger will be a great step in the right direction.
One key component to succeed in diversification is a reasonable and prudent approval process. We offer various incentives to organizations to come to New Mexico, but often times the approval process gets bogged down in various government agencies. While the devil is always in the details, it would behoove our state to be more nimble like our competitors to the north, east and west of us.
Let’s not allow the past to dictate our future. New Mexico faces many challenges, but quality job creation is solvable. We only have to diversify our economy once, so let’s welcome Avangrid with open arms.