• New Mexico’s economy reflects a challenging paradox. The state has significant federal research assets and a nascent tech-forward workforce, yet continues to struggle with high poverty rates and persistent outmigration.
• The recently formed Elevate Quantum Tech Hub offers a significant federal investment opportunity, but comes with the risk that New Mexico would function primarily as a research supplier for startups that scale in Colorado or Wyoming.
• Successful economic development will require shifting focus toward skills-based hiring, converting federal research into commercial spillovers and building shared narrative infrastructure to connect the state’s five distinct economic regions.
After rooftop drinks at sunset one evening atop a railroad hospital turned hotel, I finished a dinner sufficiently doused in green chiles in Albuquerque’s Old Town, now a collection of adobe-style bars, restaurants and shops.
New Mexico’s biggest city by far (population 500k), Albuquerque was formed as a dusty trading outpost in 1706, a century after the Spanish founded Santa Fe as a primary provincial capital. Nearby, Pueblo people mark a millennia of ancestry. What comes next?
In 2018, Technical.ly sent a reporter to Albuquerque to understand what a Southwestern city in a deeply poor state was doing to incorporate in-demand tech skills and economic growth into its workforce development strategy.
The answer, at the time, was promising. A coalition called TalentABQ had unified job training resources under one roof. A $4 million Obama-era TechHire grant was funding free coding bootcamps for young people. A Brookings researcher praised the effort to “physically co-locate resources” in a notoriously fragmented workforce system.
Seven years later, there’s not yet a grand success story, but there are lessons for policymakers, economic development leaders and civic champions everywhere.
Albuquerque’s poverty rate has improved modestly, from roughly 19% to around 15%, depending on the measure. But New Mexico remains the third-poorest state in the nation, with a median household income of about $54,000 — 22% below the national average. A quarter of its children live in poverty. The challenges are generational, structural and not solved by any single program. Given that 1 in 4 New Mexicans live in Albuquerque, the city and state’s fates are entwined.
The Land of Enchantment is big, the fifth largest of the United States — twice the land area as Florida and bigger than Pennsylvania, Ohio and Virginia combined. Abutting Mexico, Texas and a sliver of Oklahoma, New Mexico is also part of the “four corners,” the only place where four US states meet. All these Southwestern states (the others are Arizona, Colorado and Utah) have active strategies for boosting entrepreneurship, tech jobs and infrastructure.
By most measures, New Mexico is the weakest of the four. Among patent-holders, entrepreneurship rates and tech jobs per capita, New Mexico lags far behind its neighbors.
And yet, from that low base: over the last decade, New Mexico has begun to make up ground. Its workforce share in valuable higher-wage work has finally grown, and new-firm starts are up. The state climbed 13 spots in national economic dynamism rankings over five years, according to research outfit EIG, among the fastest movers in the country.
Long overdue investments in entrepreneurial support and those tech-forward skills programs might show signals of progress. Will anyone push harder?
The state that birthed three innovation industries — and lost two
Just off Central Avenue, outside an impossibly modest one-floor commercial building, a plaque marks the founding of a company that is today worth more than $3.4 trillion.
As local lore painfully recounts, Microsoft was founded in Albuquerque in 1975, when Bill Gates and Paul Allen moved near their first customer to write software for the MITS Altair 8800. They stayed four years, then relocated to the Seattle area in 1979 to be closer to family and early computer programmers.
In 1964, Jeff Bezos, whose net worth today is estimated at about the size of New Zealand’s gross domestic product, was born in Albuquerque. Decades later, when he founded Amazon, which is today worth a measly $2.9 trillion, he chose to be near the tech ecosystem Microsoft advanced in Seattle. No sign that the place of his birth was even a passing option.
That pattern persists. From 2010 to 2020, New Mexico experienced a net loss of prime working-age adults (those aged 25–54). The outmigration was heavily concentrated among the people most likely to start businesses or fill skilled jobs.
New Mexico can be grouped with Arizona as part of the post-World War II Sunbelt boom. But the two states developed very differently.
Phoenix exemplifies the sprawling, car-dependent, built-from-scratch model of postwar growth. Between 1940 and 1980, it grew by an astonishing 1,138%. The city was built on cheap land, lax annexation laws and air conditioning, attracting retirees, defense contractors and people fleeing the Northeast. Everything is cheaper when you colonize a desert. A friend once told me that when we populate Mars, we’ll use Arizona as a case study.
New Mexico’s trajectory was shaped by something older. The state is home to 23 federally recognized tribal nations, including 19 Pueblos whose settlements predate European contact by centuries. About 10% of New Mexico’s population is Indigenous — far higher than the national average of 1.7%. These communities have deep roots, dense social ties and a relationship to land that doesn’t lend itself to sprawl.
Albuquerque did boom after the war; its population nearly doubled between 1940 and 1960. But it didn’t become Phoenix. It remained smaller, more constrained by geography: a city in a high desert bowl, ringed by mountains and mesas.
Meanwhile, Santa Fe, New Mexico’s state capital 60 miles north of Albuquerque, evolved into something else entirely: a smaller, wealthier and more expensive city. Median home prices there now exceed $541,000, compared to $308,000 in Albuquerque — nearly 75% higher. It’s become an arts-and-tourism economy with limited room for growth, leaving Albuquerque as the state’s economic engine.
One 20-year Albuquerque resident told me Santa Fe’s de facto mantra is “Our future is the past.”
Any account of New Mexico’s innovation economy has to reckon with Los Alamos National Laboratory.
The lab was founded in 1943 as the secret home of the Manhattan Project. Today, it employs more than 16,000 workers, pays $2 billion in annual salaries and operates on a $5.3 billion budget. About 40% of its employees are native New Mexicans; nearly 30% hold degrees from New Mexico institutions.
Los Alamos contributed more than $3.7 billion to the state economy in fiscal year 2022. Its workforce includes physicists, engineers, chemists and computational scientists (many with PhDs) working on everything from nuclear security to renewable energy to supercomputing.
But Los Alamos is also geographically isolated, about an hour north of Santa Fe. Its economic benefits flow unevenly. And its workforce, while highly skilled, is largely focused on federal research — not commercial startups.
The startup community and its missing connective tissue
Like most US states today trying to build an entrepreneurial ecosystem, New Mexico has the basic infrastructure: accelerators, incubators, university partnerships and a handful of anchor institutions trying to convene founders.
InnovateABQ, a 7-acre innovation district in downtown Albuquerque, brings together the University of New Mexico, CNM’s FUSE Makerspace, Bernalillo County and city government itself. The Lobo Rainforest Building houses startups and student ventures. The project has received federal support from the US Economic Development Administration and backing from local credit unions.
In Santa Fe, officials have worked to knit together existing assets — Los Alamos National Laboratory, Santa Fe Communi