Commentary: We’ve witnessed meager economic growth and rising unemployment in New Mexico since the Great Recession. So it comes as no surprise that New Mexicans are very excited about the new Facebook facility coming to Los Lunas, NM.
For all the attention garnered by that high-profile victory, we shouldn’t lose sight of the fact that a comprehensive economic recovery strategy for our state must also give strong consideration to our largest job creators in New Mexico: small businesses.
According to the latest figures from the United States Small Business Administration, 95% of businesses in New Mexico are small businesses and 55% of New Mexico employees work for a small business. In 2013, small firms with 20-49 employees added 1,600 jobs. However, small businesses with 50-99 employees lost 2,460 jobs during the same period. Those mixed results point to the need for more consistent, considerate efforts to help our local small businesses escape the recession.
As State Director for Rural Development at the United States Department of Agriculture (USDA), I have become a believer in the power of small business assistance efforts. A few years ago I met with the Community Action Agency of Southern NM (CASSNM). They received a USDA grant for $30,000 to help existing small business owners in Hatch, NM with business skills assistance. Though these business owners had been in operation for years, they were often held back because of a lack of marketing, finance, accounting and other skills. CAASNM conducted needs assessments with each business to identify gaps in business skills and they responded with a customized action and assistance plan. Their efforts saved 12 jobs and created 3 jobs in that small community at a cost of approximately $2,000/job.
In northern New Mexico, the Regional Development Corporation’s (RDC) Small and Emerging Business Technical Assistance Program reaps similar results. They work closely with small business owners to assess and address their needs in an effort to make those businesses more sustainable and successful. This week USDA matched two prior investments with an additional $50,000 grant to support RDC’s efforts to help small business owners in and around Espanola, NM.
Recently released Census figures identified Santa Fe, NM as one of the best cities in the nation for business startups. “Growing our own” is another worthwhile small business development strategy. Every New Mexican knows that we have some of the greatest artists in the world. But creating art and growing it into a successful business is difficult. This week USDA awarded a $12,000 grant to the Northern New Mexico Regional Arts Center to team up with Northern New Mexico College to develop an arts business curriculum for artists interested in starting their own business.
It is estimated that New Mexico needs to create 140,000 jobs to return to pre-recession employment levels. The efforts mentioned above offer a low-cost, high-benefit remedy to our job creation troubles. USDA Rural Development’s investments in small business development are relatively small compared to the tens of millions of dollars pledged to attract a few out-of-state companies to New Mexico but they may offer more bang for their buck and greater value over time.
When we invest in local small businesses we invest in those that are deeply rooted in New Mexico and are more likely to stay in New Mexico. By nature they are strongly tied to their community, deeply invested in their employees and are more likely to provide the kind of workplace that offers a livable wage, paid sick leave and other essential benefits that support our New Mexico families.
The vast majority of New Mexico small businesses are unlikely ever to see the benefits of a multi-million dollar industrial revenue bond, property tax abatement, or relocation incentive that are often used to attract large, out-of-state corporations. But if we can give the local retail store, child care center or restaurant a little extra attention and access to resources they might not otherwise have: we stand to gain greatly in New Mexico.