• 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.
Earlier this spring, I was in New Mexico for the first time in years. After dinner I asked my friend and a local guide about both our trip and the state: 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.
Given that 1 in 4 New Mexicans live in Albuquerque, the city and state’s fates are entwined.
Seven years later, there’s not yet a grand success story, but the coalition has slowly and steadily continued matching residents with jobs. But the challenges that remain for this poor state, including whether to prioritize new business and emerging sectors, hold lessons for policymakers, economic development leaders and civic champions everywhere.
Since Technical.ly last visited, Albuquerque’s poverty rate improved modestly, from roughly 19% to around 15%, depending on the measure, and mostly tracking national trends. 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. Are they stitched together?
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 Community College, New Mexico Highlands University and a small business incubator — through programs like STIR Labs, which matches cities with university researchers on specific challenges.
“The ecosystem exists on its own,” said one Santa Fe organizer back in 2020. “We have to organize it, let people know about each other.”
That organizing challenge is amplified by geography. New Mexico is big enough to contain at least five distinct economic regions, each with its own identity and labor market: the Albuquerque metro, Santa Fe and the northern arts-and-research corridor, Las Cruces and the southern border region, the oil-and-gas-driven southeast and the rural tribal lands that span much of the state.
Startup advisor Paul O’Brien, who has written extensively on New Mexico’s entrepreneurial potential, calls this the “missing middle” problem. The state excels at invention — Los Alamos, Sandia and the Air Force Research Lab have normalized frontier R&D for decades. Companies like Descartes Labs, UbiQD and Meow Wolf prove commercialization is possible.
But scaling companies at $1 — $10 million valuations to meaningful exits remains elusive. Research institutions rarely spawn startups because scientists lack entrepreneurial motivation or time. Relational infrastructure — the mentor networks, repeat founders and cross-sector capital flows that characterize stronger ecosystems — remains underdeveloped.
Workforce economic development in the state is not widely connected to strategies to create new jobs — new firms are disproportionately responsible for new jobs. Entrepreneurship growth correlates to poverty reduction. But that requires a narrative of how invention flows to broader resident prosperity.
“Success requires building shared narratives,” O’Brien argued, along with public outcome dashboards and incentives to keep companies in-state post-funding rather than relocating to coastal hubs. New Mexico has pockets of excellence, but no sustained narrative infrastructure connecting them (hi there!)
The quantum bet and the Colorado question
The most significant recent development may be New Mexico’s role in the Elevate Quantum Tech Hub, a three-state initiative spanning Colorado, New Mexico and Wyoming that received $40.5 million from the EDA in 2024.
Elevate Quantum’s 10-year goals are ambitious: launch 100+ quantum startups, create 10,000+ jobs, train 10,000+ workers and raise $2 billion in startup funding. The initiative has attracted an additional $84 million in state support and $1 billion in private capital commitments.
For New Mexico, this represents both opportunity and risk. The opportunity: quantum computing plays to the state’s strengths. Los Alamos and Sandia have deep expertise. The state’s sovereign wealth fund has backed quantum ventures through a $315 million initiative. And the Tech Hub designation brings federal visibility and resources.
The risk: Colorado is the senior partner. Elevate Quantum is headquartered in Denver. Colorado’s startup ecosystem is larger, better capitalized and more connected to coastal networks. If the initiative succeeds, will the jobs and companies land in Albuquerque — or Boulder?
This is the challenge facing any state that partners with stronger neighbors: regional collaboration can unlock resources, but it can also accelerate talent and capital flows toward wherever the gravity already pulls.
Albuquerque has made its own quantum play. In 2023, the city announced a partnership with Sandia and UNM to position itself as a quantum technology hub, emphasizing the region’s existing research infrastructure and relatively low cost of living.
Whether that’s enough to capture a meaningful share of an emerging industry — or whether New Mexico becomes a research supplier for startups that scale elsewhere — remains an open question.
What other cities can learn
Despite its history of brain drain, Albuquerque’s tech sector has grown significantly.
Software jobs in the metro area grew 18.7% between 2018 and 2020 — the fastest rate in the country during that period. The sector has continued expanding, with a reported 15% growth since 2023 and average salaries around $85,000. Cybersecurity jobs are projected to grow 32% through 2032, according to local boosters.
The TalentABQ initiative we profiled in 2018 offers a replicable insight: skills-based hiring works, especially for populations that traditional credentialing systems overlook. This spring Santa Fe hosted the CloseIt Summit, a gathering of skills-based employers and strategists. Its organized by Innovate + Educate, a consultancy firm founded and led by New Mexican Jamai Blivin, who led the TalentABQ program alongside state and economic development strategies.
One key lesson for others is that thoughtful workforce preparedness programs can only go so far without broader workforce and economic development growth.
State boosters point to the big major investments of traditional economic development: Intel has invested $3.5 billion, creating 700 jobs. Maxeon Solar Technologies committed $4 billion for 1,800 positions. Universal Hydrogen is building a $254 million facility. Sandia National Laboratories and the Air Force Research Lab continue to anchor defense and aerospace.
But business formation overall is mixed. Between March 2023 and March 2024, the state saw more business closures than openings for a net loss of 519 establishments. Those surviving businesses did add a net 8,167 jobs, with small businesses contributing more than half.
New Mexico isn’t a model to copy wholesale. It remains one of the poorest states in the country. Its workforce is shrinking in absolute terms. Its business formation rate lags national averages. Talent leaves. Regional ecosystems operate in silos and state leaders haven’t yet stitched them together, like Arizona, Ohio and Tennessee increasingly are.
New Mexico’s most promising federal initiative is headquartered in another state.
But for economic developers in similar positions — rural states, lower-income metros, places struggling to attract outside investment — New Mexico offers a different playbook:
- Stop gatekeeping on credentials. The data from TalentABQ is some of the clearest evidence that workforce fragmentation is a policy choice, not an inevitability.
- Invest in completion, not just enrollment.New Mexico’s GRO program achieved a 94% completion rate by focusing on short-term, career-connected credentials. That’s a different bet than traditional higher education subsidies.
- Convert federal assets into local spillovers. Los Alamos generates $3.7 billion in economic activity, but much of it stays contained. States with major federal research installations should ask harder questions about whether those assets are producing commercial startups, not just government contracts.
- Build the narrative infrastructure. New Mexico’s five regions have pockets of excellence but no shared story. Without consistent storytelling about who’s building what and where opportunity exists, ecosystems stay fragmented and talent stays invisible — to each other and to outside investors.
- Accept that some talent will leave, and focus on those who stay. New Mexico’s low migration and labor force participation rates are structural. The question isn’t how to stop outmigration. It’s how to make the most of the workers who remain.
A workforce system that’s finding what works
When we visited in 2018, the question was whether Albuquerque could build a more coordinated workforce system to address poverty. That work is ongoing — and incomplete.
But the broader question has shifted. With tech employment growing, federal research infrastructure unmatched by most states, a workforce system posting real results and a quantum bet that could reshape the region’s economy, New Mexico’s challenge now looks less like “How do we get started” and more like “How do we keep people here long enough to benefit.”
The state still loses talent. It still ranks among the poorest. It still operates in the shadow of its own history — the place that launched Microsoft and raised Jeff Bezos, only to watch both leave.
But it also has something Phoenix doesn’t: deep roots, dense communities, a research ecosystem that isn’t going anywhere and a workforce system that’s learning what actually works. Can small, if demonstrable, progress form tech workforce and entrepreneurship organizing attract more state and regional economic development focus?
Without that answer, and finished with dinner, I arm-twisted a friend to let me drive west. A half-hour outside Albuquerque, just north of historic Route 66 and near the Canoncita Indian Reservation, the Star Gazer Ranch is just a plot of desert bisected by a state road.
On this clear night, I climbed atop my bright-blue rental car and laid out on its roof. Even with the visible city lights and a reservation dog’s incessant barking, I took in the stars.
