ECONOMY
New report lays out New Mexico鈥檚 bid to build a high-tech economy
Space, quantum computing and advanced manufacturing among sectors identified as drivers of long-term growth
Published
A Hermeus unmanned jet recently completed its first supersonic flight at Spaceport America.
Virgin Galactic, an anchor tenant at the site, has said it plans to resume commercial space flights in the coming months.
The activity highlights New Mexico鈥檚 busy space and defense industry 鈥� a sector that a New Mexico Chamber of Commerce Foundation report recently identified as having the 鈥渃apacity to reshape鈥� the state鈥檚 economic future.
鈥淚 think it goes back to the blue skies and open spaces,鈥� Spaceport America Executive Director Scott McLaughlin said. 鈥淲e鈥檝e got White Sands Missile Range and, of course, Kirtland Air Force Base and the national labs, then Spaceport.鈥�
The foundation hired consultant Economic Leadership to conduct an analysis examining economic diversification with an emphasis on 鈥渆merging industries showing promise in the state鈥� and strategies needed to position New Mexico for sustained economic growth.
The report, published this month, identified four sectors that have so far contributed about $9 billion to the state: quantum and advanced computing; space, aerospace and defense; intelligent manufacturing; and advanced energy.
The report is the latest example of New Mexico's efforts to wean its economy off federal spending and legacy industries, like oil and gas, and cultivate a homegrown science and technology sector.
鈥淓conomic growth does not occur top-down but is built through cooperative and coordinated action across specific sectors,鈥� said Rob Leming, president of the New Mexico Chamber of Commerce Foundation.
A growing 鈥楽pace Valley鈥�
McLaughlin said he was not surprised the state identified space, aerospace and defense as important to New Mexico鈥檚 growth.
鈥淲e鈥檝e kind of nicknamed ourselves, 鈥楽pace Valley,鈥� and the reason is because we have so many of those assets and with a relatively sparse population in areas of the state and the test ranges we have,鈥� he said. 鈥淚t makes perfect sense.鈥�
Further north, in Sandoval County, Castelion Corp., a defense technology company, is making way on its 1,000-acre solid rocket motor manufacturing campus, where it will assemble hypersonic systems.
The company earlier this month said it had reached an agreement with the Department of War on a two-year contract to produce 500 missiles annually 鈥� work that could grow the local economy with roughly 300 jobs.
Sandoval County Manager Wayne Johnson, citing the company鈥檚 estimated $650 million economic impact over the next decade, said Castelion鈥檚 decision to choose New Mexico came down to 鈥渙ur leadership鈥� in defense technology.
鈥淪andia National Labs is one of the leaders in the world in hypersonics,鈥� he said. 鈥淐astelion already had a relationship with (the) labs and they wanted to be near them.鈥�
While Castelion is just one example, the foundation鈥檚 report says space and defense is projected to be the fastest-growing sector over the next decade, with a 34% increase in jobs.
To ensure the sector continues to grow, the report recommended creating a state space commission, better defining ecosystem roles and continuing to build on site-readiness initiatives, which have been a priority for the state over the past two years.
鈥淭he space commission could help align the public and private sector stakeholders in building the space industry on shared priorities,鈥� Leming said.
Scaling quantum and advanced manufacturing
The quantum and advanced computing sector contributed $6.5 billion, or 5% of the state鈥檚 total economy, in 2025, the report says.
A state plan laid out by the New Mexico Economic Development Department last year references quantum computing as an example of a 鈥渉igh-potential鈥� industry for the state.
Quantum technologies have also been a huge push by state officials, who have drawn in not only federal partnerships but also private-sector agreements to grow their businesses in New Mexico.
To kickstart this momentum, the state has announced about $315 million in quantum investments over the past several months, including $25 million to Roadrunner Venture Studios to incubate quantum businesses and a $60 million partnership with the U.S. Defense Advanced Research Projects Agency to develop the Quantum Frontier Project, which aims to accelerate the development, testing and validation of emerging quantum technologies.
In March, Qunnect, a New York-based quantum computing company, announced the launch of ABQ-Net, described as the nation鈥檚 first open-access entanglement-based quantum network. The facility opened thanks to the money issued by the state to Roadrunner.
Nora Meyers Sackett, the director of the state鈥檚 Technology and Innovation Office, in August described quantum technology as something that will 鈥渞eshape the future.鈥�
鈥淏y creating an environment where the top scientific minds have the tools and collaboration they need, New Mexico is backing the bold quantum startups and partnerships that will fuel breakthroughs,鈥� Meyers Sackett said.
The intelligent manufacturing industry, which involves the use of smart technologies like artificial intelligence, sensors and automation, has contributed $4.1 billion to the economy, according to the foundation report.
One of those contributors is Intel, which makes advanced semiconductor packaging technologies out of its Rio Rancho plant.
鈥淲ithout Intel, there would be no Rio Rancho,鈥� Johnson said.
He said Intel is looking at becoming the first site in the world to mass-produce glass substrates.
Beyond technology, the state has also promoted advanced energy 鈥� think solar, wind and other renewables. The sector represents a $2 billion industry in New Mexico. But it could reach $3.4 billion by 2035 if 鈥済rowth trends in wind, solar, and power distribution continue,鈥� the report said.
In a May 25 letter to the Journal, Erin Taylor, acting secretary of the New Mexico Energy, Minerals and Natural Resources Department, touted the state鈥檚 efforts to build strong clean energy infrastructure. This included the allocation of $70 million in grants for projects aimed at reducing greenhouse gas emissions and expanding the use of renewable energy.
鈥淎nd we are not done,鈥� Taylor said. 鈥淚n the months ahead, our department will continue delivering programs and services that advance abundant, clean and affordable electricity for all New Mexicans.鈥�
Economic outlook
Beyond identifying these core growth sectors, the report addressed potential deterrents to economic growth, such as high crime rates, low workforce participation and poor performance in K-12 education.
For example, New Mexico's labor force participation rate was 57.2% in April 2026, ranking among the lowest in the country.
It is 鈥渘ot an abstract metric; it is a direct constraint on growth. It produces a workforce lacking the skills needed for key technical roles in emerging industries, which demand strong foundational STEM skills the current system fails to provide at scale,鈥� the report says. 鈥淭he state鈥檚 low labor force participation rate shrinks the available pool of trainable workers.鈥�
To address the gaps, the report offered several recommendations, such as improving access to training, launching campaigns to keep and attract talent to the state, and partnering with tribal nations to offer workforce training for in-demand sectors.
Reilly White, an economist and professor at the University of New Mexico, said what stood out to him most about the report was that it 鈥渃orrectly identifies New Mexico鈥檚 core economic paradox: we are asset-rich but opportunity constrained.鈥�
鈥淲e have extraordinary federal (research and development) infrastructure, world-class scientific capacity, national labs, defense assets, energy resources and real momentum in advanced industries, but we still lag neighboring states in broad-based job growth, workforce participation, and private-sector dynamism,鈥� he said. 鈥淭he report makes a compelling case that New Mexico has become very good at generating innovation, but much less effective at commercializing it at scale.鈥�
But White said the report, on occasion, 鈥渙verstates how quickly some of these emerging sectors can transform the broader economy.鈥�
鈥淨uantum, advanced computing, aerospace and intelligent manufacturing are absolutely important, but these are capital-intensive, specialized industries,鈥� he said. 鈥淭hey create high-value jobs, but not necessarily 鈥榟igh-volume jobs鈥� in the short-term. A thousand excellent engineering jobs matter tremendously, but they do not solve statewide labor force participation challenges on their own.鈥�
Leming said the report was released for one simple reason.
鈥淲e鈥檙e at this inflection point where we鈥檙e on the tail end of the extractive industry wave, and we need to jump from that wave to a new wave,鈥� he said. 鈥�...Engaging in this report is a meaningful way to chart these new paths forward is going to be important.鈥�
Gregory R.C. Hasman covers the economy and healthcare. He can be reached at ghasman@abqjournal.com or 505-823-3820.
