Empowering New Mexico: The 2025 economic development strategic plan

States with economies based on resource extraction are among the least diversified in the country—they know well the boom-and-bust cycles that come with that concentration. Innovation and entrepreneurship represent a path out of that boom-bust cycle, and New Mexico’s recently updated economic development strategy, Empower and Collaborate: New Mexico's Economic Path Forward, hints at wanting to build on that recognition in its planned actions for the coming years.

The forward-looking strategy, which began in 2021 and further refined in 2023, details actions to expand New Mexico’s economy away from reliance on natural resource extraction while also shifting away from traditional sector-based job creation strategies towards addressing structural economic challenges that affect all sectors. It seeks renewed commitment to long-term planning, supporting regions transitioning away from coal, and helping cities foster the partnerships, infrastructure, and assets necessary to grow existing businesses and industry clusters.  

Specifically, the plan outlines recommendations and initiatives to improve the quality of New Mexico’s higher education and training programs through industry engagement and institutional reforms. As well as to fully enable innovation throughout the state by building capacity among New Mexico’s entrepreneurs, removing barriers to financial resources to innovation, creating and sustaining an entrepreneur-friendly business environment, and connecting entrepreneurs and innovators to critical industry knowledge and resources via the strategies listed below.

• Design industry-specific state-sponsored investment funds that provide matching funds up to 49%, catalyzing small business investments in key target industries, such as aerospace, intelligent manufacturing, biosciences, cybersecurity and advanced technology.
• Support New Mexico’s higher education and training institutions in establishing state prototype funding to provide academic researchers access to critical gap funding to advance their technologies to more developed technology readiness levels.
• Work with the New Mexico State Investment Council to identify potential mechanisms that would increase public sector investments in New Mexico-based startups.
• Design a grant program for academic researchers at New Mexico’s higher education institutions that incentivizes researchers to collaborate with industry partners.
• Establish a permanent funding stream for incubators and accelerators located throughout the state.
• Establish a New Mexico Incubator and Accelerator Network that coordinates the efforts of various incubator/accelerator programs in New Mexico and supports the emergence of new programs.
• Leverage New Mexico’s incubators, accelerators, laboratories, and higher education and training institutions to create a New Mexico Entrepreneur Mentor Network that serves as a resource for business knowledge and management support for early-stage startups.
• Establish a state-owned industrial finance corporation, modeled after the Industrial Finance Corporation Act of 2021, which makes long-term loans, equity investments, and purchase guarantees to bridge the financing gap in New Mexico’s high-tech and capital-intensive manufacturing sector.

Some of the recent results of those recommendations include:

• the Science & Technology Business Startup Grant, which provides funds for technology commercialization for early-stage NM companies in aerospace, biosciences, cybersecurity, intelligent manufacturing, sustainable and green energy;
• the Advanced Energy Award Pilot Program, awards funds for development and commercialization of advanced energy technologies from New Mexico companies; and
• the Research University Pitch Award Pilot Program that awards funding, resources, and entrepreneurship assistance to science and technology commercialization proposals from faculty/student teams at New Mexico universities.

The economic development strategy presented by the New Mexico EED in its Empower and Collaborate: New Mexico's Economic Path Forward acknowledges the challenges and opportunities the state faces in designing a multifaceted approach that builds on the state’s traditional strengths—such as natural resource extraction and agriculture—but also shifts towards growing innovation in the emerging technologies of the state’s key target industries (renewable energy, aerospace, biosciences, etc.). It is designed to create a more diverse, resilient, and sustainable economy—one that moves away from the cycles of boom and bust by providing a framework in which R&D and entrepreneurship can drive and expand the state’s economic growth in new and emerging sectors and a skilled workforce.

This article was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. (The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.