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Small Businesses Spur Economic Growth

Senator Martin Heinrich (D-N.M.), Ranking Member of the Joint Economic Committee, recently hosted a series of roundtables in New Mexico to learn more about the challenges that small towns and rural communities face when thinking about economic growth and development. These roundtables looked at several issues, but primarily focused on broadband infrastructure and exports, small business incubation and innovation, and workforce development and mentorship.

These conversations help build on findings in a recent Joint Economic Committee Report, Investing in Rural America, that outlined some of the challenges rural small businesses face. Insights collected from roundtables shine a light on how national policy issues are felt at the local level and how small businesses can harness local expertise and resources to spur sustainable economic growth.

Policy makers serving rural and small-town communities can use the experiences of New Mexico small business owners and community leaders to better understand the rural American economy.

Broadband Infrastructure and Exports  

Downtown Alamogordo, New Mexico

Access to Broadband Drives Job Creation

By opening up new markets for small businesses, broadband access is one way to promote economic development. A growing number of “solopreneurs” in rural communities rely on online marketplaces to sell their products and services. These sales bring in capital from outside the community and ultimately help locals sustain their businesses, support their families, and invest in the local workforce. 

Broadband also helps aspiring entrepreneurs spread awareness and build long-term relationships with clients. In Silver City, a local tile manufacturing business that ships its products globally uses high-speed internet to perform market research, advertise its products, and help online customers find storefronts nationwide that carry its unique handmade tiles. 

High-Speed Internet Can Accelerate Innovation 

Broadband access also allows rural areas to take advantage of the innovation economy’s next set of economic development tools. Without internet, rural families will not be able to exchange valuable ideas and resources with like-minded communities. 

In Deming, leaders from multiple New Mexico’s Small Business Development Centers talked about efforts to build “virtual” resource portals and incubators. These portals require a public access point and uninterrupted high-speed internet. With broadband, previously disconnected entrepreneurs would be able to engage with business counselors via a computer and receive real-time guidance. 

Broadband will also be instrumental in improving access to health care in rural communities. Small businesses in Carlsbad emphasized that telemedicine and other innovations, including remote surgery, will continue to be crucial for rural communities without a nearby hospital. These critical services can only be made available with reliable, high-speed broadband access. 

Read more here.

Small Business Incubation and Innovation    

Small business storefront in Silver City, New Mexico

Culturally Competent Incubation Gaining Traction 

Small business incubation comes in many forms. Two things stuck out from roundtables with various resource providers. 

First, effective incubation must be culturally competent and prioritize economic diversity. The South Valley Economic Development Center, for example, offers half-price applications for its incubator program to entrepreneurs who demonstrate financial need. And the Albuquerque Hispano Chamber of Commerce’s “Emprendedores” program delivers culturally accessible, affordable entrepreneurship training for Spanish-speaking New Mexicans. These efforts help cultivate an entrepreneurial streak across a diverse set of communities. 

Second, high-touch technical assistance – rather than a hands-off approach – can ensure that small businesses have the crucial support they need at early stages. Small businesses stressed that successful incubators don’t “push companies out of the nest too soon” and take time to recognize each entrepreneur’s unique story. 

This hands-on approach is especially critical for rural communities, where traditional markers of economic potential (like credit scores) often don’t tell the full story. Tierra del Sol, a Community Development Financial Institution (CDFI) that serves communities across southwestern NM, and other alternative capital providers, develop personal relationships with their business clients and adjust loan terms accordingly. Such a customized approach can help entrepreneurs turned away by conventional banks secure critical seed funding for their ideas.

Read more here.

Workforce Development and Mentorship

Small Business Roundtable in Albuquerque, New Mexico

Mentorship and Leadership Development Drive Industry

Several small businesses are working to perform better on-the-job training and mentorship. In Silver City, New Mexico, a local tile manufacturer spoke to the need for “succession planning” for rural small businesses that lack a leadership pipeline in the face of imminent retirements. Such planning is time-intensive but helps ensure that family businesses do not disappear after founders retire and incentivizes employees to stay and grow. Fostering this “mentorship attitude” in rural communities is vital. 

To enhance career readiness, mentorship and leadership development should include an emphasis on teaching interpersonal skills. In Deming, New Mexico, small business community leaders shared stories about how job seekers lacked basic behavioral and office skills, such as punctuality, customer service skills, and interview etiquette. 


Federal Mentorship Programs a Good Start 

Federal programs that formalize mentorship are a strong starting point to expand skills training and development. Through these programs, established companies can instill confidence and expertise in new businesses opening their doors for the first time. 

At a roundtable at the Indian Pueblo Cultural Center in Albuquerque, Native American small business owners highlighted the Small Business Administration’s (SBA) mentor-protégé program. The program pairs small businesses looking to enter the federal contracting space with experienced government contractors. Another tried-and-tested model is SCORE, a nonprofit association of volunteer business counselors supported by the SBA. At the Albuquerque Veterans Business Outreach Center (VBOC), local staff underlined that many veterans take advantage of the association’s volunteers, who assist and mentor first-time entrepreneurs. 

Read more here.

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