Momentum has been growing over the last five years in Albuquerque around supporting and strengthening the entrepreneurial ecosystem – for all types of entrepreneurs, micro to high tech and commercialization. We’ve opened the doors on two buildings at InnovateABQ – a seven-acre innovation district in downtown Albuquerque that fosters inclusive economic development and job creation. We’ve built out Navigator programs to guide entrepreneurs and developed a Co-op Capital program that has now made over $600,000 in loans to 280+ low-income entrepreneurs. We have made some significant strides.
However, challenges persist that call us to action. The Start Up, Stay Up, Scale Up [SU(3)] evaluation of Albuquerque’s business landscape was incredibly helpful in clarifying our understanding of Albuquerque’s entrepreneurial ecosystem and how we can establish and strengthen equitable and deliberate pathways for entrepreneurs of color.
What We Learned
Some of the greatest challenges identified include slow growth in our private sector post-recession, an over reliance on government jobs, a high prevalence of poverty, and a large “shadow economy” of unregistered or unlicensed businesses.
For too long, Albuquerque residents have been coexisting in silos. To create transformational economic opportunities for Albuquerque’s under-resourced residents, it’s imperative to marry the needs and efforts of multiple populations through private-industry growth that can provide economic opportunities for Latino and Native American entrepreneurs.
The high-tech sector has proven to be a source of economic growth that can fuel and diversify Albuquerque’s economy. However, we must intentionally address diversity in the sector – not only in the quality of jobs and who has access to them, but also in the supports offered. A lack of diversity has led to under-utilization of available talent and under-recruitment.
Focusing on diversity is not just the “right thing to do.” It is integral for economic growth and a healthy, functioning economy. Providing traditional services and pathways without prioritizing diversity will continue to yield the same results and not speak to the assets of our state, ignoring a wide pool of talent and impacting the ability of that talent and long-term economic change. Albuquerque also faces an undersupply of capital that fits the needs of local businesses.
Key Scalable Opportunities:
1) Capital availability and access is a major opportunity for Albuquerque’s ecosystem to scale in support of entrepreneurs of color. In Silicon Valley, there are 400-500 venture funds. In Albuquerque there are fewer than ten.
Thirty-eight percent of the adult US population cannot readily receive business credit. Many cannot secure loans even from predatory lenders and if they do, they are likely to pay up to a 30% interest rate, making success even more challenging.
The economics of poverty keep many would-be entrepreneurs from getting started. Over 70% of Albuquerque’s population lives in poverty or on the cusp of poverty. Entrepreneurs who have less economic security may be risking their livelihood to focus on starting a business. By making capital cheaper and easier to access, one of the key barriers can be removed.
We are actively growing Co-op Capital, a micro-lending program for nontraditional entrepreneurs, which was just honored by Harvard Ash Center with a Top 25 Innovations in American Government Award. We are also investigating other affordable capital partners, and soon, we will convene venture capital experts to discuss opportunities for a venture capital fund supporting founders of color.
2) Strengthening pathways for diversity in leadership and workforce of high-tech startups, “tequity,” is a critical scale-up area for Albuquerque’s ecosystem. Given the segment’s growth potential, this area is a particularly high-impact sector in terms of addressing job creation, economic mobility and the opportunity to build wealth.
Our efforts moving forward will take two focuses:
a) Building a skilled software development workforce that will result in creating high-wage jobs for people of color and a workforce that can provide technical support for high-growth entrepreneurs of color.
Some of our efforts include:
- Expanding middle and high school coding programs with a special focus on schools located in districts that serve communities of color
- Recruiting participants from entrepreneurial support organizations
- Recruiting graduates into coding boot camps at a college and university level
- Expanding scholarship opportunities
- Developing relationships with companies that will hire graduates
- Promoting Albuquerque as an affordable home for software development
b) Developing Albuquerque’s growing commercial space industry. In 2016, the commercial space market was $336B with an estimated market of $2.7T by 2045. National space agencies and military programs will continue to dominate, but private and commercial companies will play a growing role. With Albuquerque’s research institutions; national laboratories; open-urban land; and a $250M state investment in Spaceport America (FAA-licensed spaceport); as well as Innovate ABQ; two Air Force Research Laboratories; and business executives, community leaders, congressional and economic development representatives, and university heads working together, Albuquerque already has the infrastructure and investments to corner the commercial space market. We are partnering with New Space New Mexico to ensure that, at the dawn of the space industry, there are equitable and deliberate employment pathways, educational opportunities and leadership roles for nontraditional entrepreneurs. If developed inclusively, the commercial space industry will serve as a wealth-building platform creating businesses founded by people of color.
What Are Our Next Steps?
We have built a new Action Team to focus on the SU(3) initiative. Our charter members are:
- Robin Brulé with Nusenda Credit Union and City Alive
- Kelli Cooper with the Albuquerque Community Foundation
- Diane Harrison Ogawa with Central New Mexico Community College
- Robert DelCampo of the University of New Mexico’s innovationAcademy
- Monique Fragua from Indian Pueblo Cultural Center
- Synthia Jaramillo at the City of Albuquerque
- Lisa Adkins with FatPipe ABQ and the Bio Sciences Center
This dream team, and the organizations they represent, will embrace inclusion as an integral design principle for every growth activity. We’re starting by naming the barriers in our own systems and asking the question, “Why aren’t there more people of color here?” Together, we will provide (or find additional necessary resources) to align, integrate, and mutually reinforce each other’s activities as our cross-sector partnership begins to implement the work. The team will work together to identify key areas of intervention to build inclusive economic prosperity.
Our theory, “skate to where the puck is going” requires that we move forward with programming for the next economy, leaving behind those programs that relegated underserved communities into old-economy jobs and industries.
Our focus will be on wealth creation opportunities and how underutilized assets can participate in, drive, and own the future. We will intentionally concentrate our efforts on equity; that is, recruiting people of color into tech and tech-enabled business growth – specifically in the industries describe here.
Inclusion is not a separate economic practice. We are building a plan for that inclusion, together in collaboration. Albuquerque institutions have to change their own environments, and the SU(3) work will be a crucial component of this work.