The Greening Of New Mexico

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In most cases, however, says the state's economic development director, Albert Dietz, "our best bet will be helping our people start and succeed in their own businesses." The Small Business Development Center, started in March 1981, is a "one-stop service center for small business," according to director Jane Dunn. She sets up how-to seminars in communities throughout the state, and follows up with individual consulting sessions for would-be entrepreneurs.

New Mexico's diversity and its ethnic mix complicate any statewide development efforts. "What makes sense for Hobbs, in one of the largest oil-producing counties of the country, doesn't make sense anywhere else," says Dietz. And Lee Zink points out that nearly half the state's population is either Hispanic or Indian, two ethnic groups with strong ties to the land. "The challenge is to find ways for them to remain on the land and still develop economically," says Zink. "The only way to do it is with small businesses."

"One way we can develop a better economy for our tribes," says Floyd Correa, former governor of the Laguna Pueblo tribe, "is to encourage our people to become entrepreneurs." Correa Enterprises, his $500,000 consulting firm, designs computer systems and energy resource development plans. New Mexico's 22 Pueblo, Navajo, and Apache tribes are the largest private owners of proven and potential energy resources in the state. Correa's own reservation is the site of the largest openpit uranium mine in the world.

The state's Hispanic enterprises are also becoming more diversified. "Ten years ago Hispanics were starting gas stations and retail stores," says Anna Muller, head of the Albuquerque office of the National Economic Development Association (NEDA), a national Hispanic business development organization. "Today they're also starting high-tech businesses, electronics firms, energy firms, and cable-TV stations." One of NEDA's success stories is Nuclear Pharmacy, started by Robert Lee Sanchez in 1974. Sanchez, just out of the University of New Mexico graduate pharmacy program, hit on the idea of "drugstores" that would dispense and deliver radioisotopes to hospitals and then pick up and dispose of the radioactive waste. The company had sales of about $16 million in fiscal 1981 and ranked 48th on the 1981 INC. 100 (See INC., May 1981).

While there's plenty of ideological support for small business in New Mexico, many say that the support that really counts -- money -- is in short supply. "The legislature is dominated by people who came to power when New Mexico was a poor little state that had to underfund everything," says Jerry Jordan, an economist and former dean of the UNM Anderson School of Management, and now a member of President Reagan's Council of Economic Advisors. "The dominant attitude is, when in doubt, cut taxes."

The legislature has cut taxes every year since 1972, and in the 1981 session it emphasized cuts for firms whose annual earnings are less than $3 million. But the legislature did not fund measures that Zink and others see as crucial to the growth of the state's smaller businesses, such as the university's fledgling innovation center. Nor does the state fund a standing committee on either small business or economic development. The only state-funded lure to business is a nine-year-old $1-million inplant training program that provides grants to new or expanding manufacturers.

On the other hand, the state's financial stability is a plus, says Al Dietz: "We have no gimmicks, but we've got a $2-billion state fund that means we can offer a business environment with no surprises like deficits that require new taxes." The state's general permanent fund, fed by land-use fees and royalties, and a newer severance-tax permanent fund now total over $1.5 billion. That money ought to be used more aggressively for economic development, argues Jim Covell: "Unfortunately, the tendency is to build a new building with a legislator's name on it rather than fund a research and development program to spawn new companies."

The large new companies moving into New Mexico are improving the environment for smaller businesses in some unexpected ways. New Mexico has always been capital-poor, and bankers have been able to pick and choose their deals. That frequently meant avoiding high risks, such as start-ups. "Now representatives of big electronics firms are coming to our bankers with forms that ask questions like how many service stations and machine repair shops you have in your community," says Albuquerque businessman Edward J. Myslik, Jr. "Bankers are taking small businesses a lot more seriously as a result." That's quite a change from even four years ago, he says, when Myslik and several business associates launched a small private venture-capital firm. It was only the second in Albuquerque, and the first limited itself to construction projects. "Banks used to send prospective clients to me," Myslik recalls.

Small investors are also coming on the scene in New Mexico. Jim Covell gets a call or two a month from out-of-staters interested in partial ownership of a business or in developing projects such as small commercial buildings. "It's one of the most encouraging steps I've seen," says Covell. "In the past, we were a capital-drain state: More investment went out than came in. As we develop our high-technology manufacturing base, we'll see more people coming in with both ideas and financial resources -- those who until now went to Texas or California once they got tired of IBMsville."

As Lee Zink says, "For a long time we in New Mexico have had the poor man's attitude toward the future: There is no future for me; all I can do is be nice to the guy who provides my livelihood. That's no longer the case. We have astounding opportunities. We simply must realize them."

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