The New Mexico Economic Development Department (EDD) contracted with SRI International to develop a 20-year state strategic plan (SSP) for New Mexico. The SSP was based on the inspirational vision: “To Build a Diverse and Robust Economy that Engages Local Talent, Cultivates Innovation and Delivers Prosperity for All New Mexicans.”
This almost 400-page plan is available online. I have read it multiple times, participated in EDD’s presentation at meetings hosted by the N.M. Chamber of Commerce and the University of New Mexico and given a talk emphasizing how a technical organization made up of Sandia Labs retirees might help EDD implement it.
The following is my assessment of SSP; its positive features far outweigh concerns.
• The SSP is a necessary and timely first step to improve New Mexico’s stagnant economy. EDD should be funded to lead implementation of the SSP because the heavy lifting is ahead. EDD must have an exceptional staff whose competencies include a technology expert with a deep understanding of which technologies drive economic growth.
• EDD is transparent and welcomes suggestions for improvement.
• EDD’s willingness to address the state’s stagnant economy, income inequality, poverty, innovation, entrepreneurship, regulations, selection of “best-suited” industry sectors and improve the linkage between education and economic growth are laudable.
• Gov. Michelle Lujan Grisham’s issuance of an executive order to identify onerous and duplicative state, county and city regulations is a really big step forward.
• The elephant in the EDD room is how to change New Mexico’s government-dependent culture into one that promotes private-sector economic growth. UNM’s president cites its partnerships with Sandia Labs, LANL and AFRL, all government-owned entities, when discussing UNM-industry partnerships.
• Metrics that measure state economic growth were not identified. I prefer the outcome metric: median household income measured relative to that of the United States.
• Public research universities, partly because of their dependence on federal research and development (R&D) funds, have shifted from local economic growth, measurable, to knowledge creation, difficult to measure. They are difficult to reform and refocus on industry-relevant interdisciplinary education and use process rather than outcome metrics. Universities cherry-pick external assessments of their work and only report those that are favorable. Arizona State University’s president discarded departments and reorganized around public outcomes to make ASU more responsive to Arizona’s needs. EED should be prepared to force restructuring of New Mexico’s public college and university system.
• The inputs to economic growth are labor, capital and technology. SSP addressed the first two but not the third. EDD is assuming New Mexico’s federal entities are a reservoir of economically-relevant technology useful and accessible to the states’s industry. Federal R&D spending is defense-focused and 22% of the U.S. total; government R&D is rapidly approaching economic irrelevance.
• EDD’s reliance on cooperation and partnership among local entities to build the state’s economy is overstated. Harmony is overrated and cheerleading is useless; critics are important to progress.
• EDD seems to advocate equal support of all entrepreneurs. One research study finds a significantly increasing number of university-licensed startups are not contributing to economic growth. Another study indicates increases in funding to national laboratories has either a neutral or negative impact on the quality-adjusted quantity of entrepreneurship. EDD must focus on entrepreneurial efforts with potential to grow into gazelles and unicorns and it must be aware of research relevant to implementation of the SSP.