New Mexico: The Land of Enchantment—For Business
31 Oct, 2012By: Trade & Industry Development
Not so long ago, New Mexico’s breathtaking scenery enchanted so many visitors that they made it the state motto. Now it’s something far more pragmatic: an enchanting business climate that rivals its 340 days of sunshine.
It’s also a land of great diversity. New Mexico’s complementary cultures, varied geography and dedicated workforce make it an attractive location for many types of businesses.
Industries that have established themselves in New Mexico include aerospace and defense, advanced manufacturing, back office and technical support, value-added agriculture, logistics and distribution, technology commercialization, energy and renewable resources, and digital media.
With six of the earth’s seven climatic zones, businesses and individuals can find a geographical location that suits their needs.
New Mexico has the lowest cost of doing business of any state. Moody’s North American Business Cost Review & Economy.com studied all the factors before they named New Mexico No. 1 for the lowest cost of doing business. They looked at energy costs, worker compensation and taxes. They found:
• Low Energy Costs
New Mexico’s electricity and natural gas rates are below the national average and that of most of its neighboring competitor states. Electricity rates are substantially lower than both the national and regional averages. According to the U.S. Department of Energy, its energy cost is seven percent below the national and 19 percent below the regional average.
• Low Property Taxes
The state’s tax and regulatory climate has improved significantly in recent years under the administration of Governor Susana Martinez as continued tax cuts and growing state revenues from natural resources have driven the overall tax burden in New Mexico to its lowest in 20 years. Today, it has the lowest property tax burden in the country, according to the Tax Foundation’s 2012 State Business Tax Climate Index, and property is assessed at only 33 percent of its market value.
• Affordable Real Estate and Cost of Living
Its 121,589 square miles make New Mexico the fifth-largest state, and that helps keep the cost of real estate reasonably priced.
New Mexico is a place where talent, ideas, collaborations and connectivity have become the main competitive advantages in business. Since the 1930s, New Mexico has been a world leader in scientific research and energy development. Its national laboratories and federal and academic research facilities have conducted experiments in a wide array of disciplines, from nuclear weapons and defense systems to aerospace, bioscience and nanotechnology.
New Mexico’s scientific infrastructure is the result of a strong federal presence, a collection of research institutions and the highest level of non-industry research and development investment in the nation.
Many of these federal and state-funded laboratories and educational research facilities offer opportunities for private sector companies to partner through collaborative research and development agreements (CRADAs), lease one-of-a-kind research facilities and access licensable technologies.
Energy and Minerals
New Mexico is endowed with plentiful natural resources, making it a large net exporter of energy. The oil and gas sector alone returns more than $2 billion in taxes and other revenue to the state annually.
Mining employs more than 22,000 statewide.
The San Juan Basin, located in northwest New Mexico and southwest Colorado, is the largest proven natural gas reserve in the country. This 26,000-square-mile geologic feature is a major source of oil and gas, and it provides approximately 70 percent of the gas produced in New Mexico.
The Permian Basin covers southeastern New Mexico. It is estimated that only 27 percent of the available resource has been extracted from the Basin, and that there are 45 billion barrels of residual oil and 30 billion barrels of mobile oil available today.
New Mexico also produces more potash than any other state and is fourth in copper production. The Bravo Dome carbon dioxide gas field, located in Harding and Union Counties in northeast New Mexico, covers about 800,000 acres. It is estimated to contain more than 16 trillion cubic feet of carbon dioxide. The CO₂ is used primarily for enhanced oil recovery.
New Mexico has tremendous potential for renewable energy production, particularly solar and wind. In 2011 New Mexico ranked fourth in the nation in installed solar photovoltaic capacity, which increased from 43 megawatts in 2010 to 116 megawatts in 2011. The state is second in the nation in days of sunshine.
Wind is currently the largest renewable energy generator in the state — 8.6 percent of the 10.1 percent generated by renewables.
The state has an aggressive renewable portfolio standard that requires investor-owned utilities to generate a portion of their energy from renewable sources: 15 percent by 2015 and 20 percent by 2020. New Mexico offers several tax incentives specific to the advanced energy industry.
New Mexico is right at the heart fastest-growing region of the country. Supported by three interstate freeways, a vast railway system and a number of regional and international airports, New Mexico offers direct access to the east coast, the west coast, the Midwest, and the international borders of Canada and Mexico.
By truck, from New Mexico it’s possible to reach Texas, Arizona, Colorado, Kansas, Oklahoma and Utah within one day and California markets in two days.
Distribution companies, manufacturers and other business are well-positioned in New Mexico to serve east and west coast clients. The state is crisscrossed by three major interstates: I-25 (north-south), I-40 (east-west) and I-10 (east-west), in addition to two- and four-lane highways, making the transportation of goods more efficient and less expensive.
New Mexico has one of the most productive workforces in the U.S. today, measured in terms of “value-added per worker” (which deducts the cost of material inputs in the manufacturing process, but leaves cost of equipment and workers).
The state offers a well-educated, sizable, young workforce with an even larger potential workforce willing to consider new job opportunities. Its universities and community colleges graduate students with various degrees ranging from liberal arts and nursing, to business, math, science, engineering and education.
• Bilingual Population
Of interest to many customer service, technical support and shared services facilities, by the state constitution, New Mexico is officially a bilingual state, with almost 29 percent of adults speaking Spanish. Forty-six percent of the population is Hispanic. The state also has a large Native American population, second in percentage behind that of Alaska.
• Affordable Labor
New Mexico is not the only state with a technical, bilingual and productive workforce. However, labor is very affordable, as well.
• Technical Expertise
New Mexico has long been an attractive location for technology-intensive businesses to establish operations. Companies like Boeing, Honeywell, Lockheed Martin, Emcore, Genzyme and Raytheon have found a technologically astute workforce in the state’s experienced engineers and technicians. While many work at the national laboratories, where they accumulate valuable experience and technological expertise, the majority of the skilled and creative workforce exists outside of the labs.