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New Mexico State University

New Mexico State University

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Study Looks at Ingredients for Economic Clusters in New Mexico

LAS CRUCES -- Thinking about the ingredients in salsa - from the chile to the jar - could help New Mexico create clusters of businesses and supporting industries, said a New Mexico State University economic development specialist.

An economic cluster built around salsa-making would include supporting industries such as chile growers, jar manufacturers, plant workers, salsa buyers and food processing researchers at universities, said Bob Coppedge with NMSU's Cooperative Extension Service.

"If we want to increase our food processing sector, then we need to focus on making the ingredients and packaging materials readily available to local processors," he said. That could involve persuading area farmers to grow garlic or a cardboard box plant to locate near the salsa-maker.

Coppedge and Nicholas Ashcroft, also an NMSU Extension economist, recently conducted an economic cluster analysis for the state Economic Development Department. They concluded that New Mexico was ideal for three manufacturing clusters: specialty food processing and value-added agriculture; laboratory apparatus and instrumentation; and electrical and electronic components.

"With the three clusters that we developed, we show that 18 counties produce something that goes into the core industries," Coppedge said. "When you include some of the outer rings of the clusters, the inputs and supporting institutions, all counties in the state have some aspect of the economy that relates to these clusters."

The analysis could help the state attract industries that are a good fit for New Mexico, including its rural areas, Coppedge said.

"When you work with clusters, you need to look at the clusters that can support all of the state and not just the high-tech centers," he said. "Food processing, for example, is something that applies to nearly every county in the state."

The next step is making sure the analysis is applicable to rural communities in New Mexico, Coppedge said. "In this area of work, you need to ground-truth your analysis to find out if it really makes sense at the local level, and to do that, you have to get local input."

Coppedge is doing a business cost study for Deming and Luna County under a sub-contract with KPMG, a national consulting firm.

"What we want to do is take the cluster approach into towns such as Deming and combine it with business-cost studies," Coppedge said. "That way we not only know which economic clusters make sense, but also how the cost of doing business in New Mexico communities compares with the cost of doing business in other areas."