Albuquerque, NM – July 28, 2014 UNM’s Bureau of Business & Economic Research (BBER) recently released its 2014 study on STC start-up companies and the impact on the state’s economy. “STC.UNM: The Impact of Start-up Companies on the New Mexico Economy,” was released in June and is an analysis of the economic impact in the state of new companies formed from technologies developed at the University of New Mexico. BBER also released similar studies in 2004 and 2011.
The study surveyed 26 companies out of more than 30 that STC has been actively providing services to since 2004. Twenty-three of the companies are headquartered and conduct operations in New Mexico. Company development phases ranged from early stage to more mature companies generating significant revenues. Some companies declined participation in the survey due to confidentiality issues. Data sources included individual company surveys, the New Mexico Department of Workforce Solutions, the Bureau of Economic Analysis and other proprietary sources.
Direct impact of the STC start-ups on the state’s economy included number of jobs created, payroll, company sales, and the amount of outside venture capital that the companies attracted to the state in 2013. See the table below:
Average compensation for the new employees was $71,065, which represents 133% of the state’s average compensation at $52,765.
The indirect economic impact of the start-ups in 2013 totaled $3 million. Indirect economic impact represents the relationship STC start-ups have with their local New Mexico suppliers and are the goods and services the suppliers provide to the companies to produce their products. Additionally, these inter-industry activities created 23 jobs and $1.1 million in payroll.
As the previous BBER studies have shown, high-tech start-up companies generate higher wage jobs, which impact the state’s economy as more is spent by households on goods and services. In 2013, earnings spent on these goods and services created $4.7 million in induced economic output, creating 41 full- and part-time jobs in industries such as retail sales and restaurants and $1.6 million in payroll.
The combined direct, indirect, and induced economic impact on the New Mexico economy was over $18 million, 147 jobs, and more than $8.6 million in payroll.
The impact of venture capital investment was also assessed by the BBER study. High-tech companies are particularly attractive to investors. STC start-ups drew $17.5 million in venture capital investments to the state, which are typically spent on infrastructure and product development and salaries. The BBER study did not include these funds in its impact calculation because it was difficult to determine what portion of the total was spent in 2013 and what portion would be spent in the future.
Industries sectors in which STC start-ups belong were assessed as well. While pharmaceutical preparation and medicine manufacturing contributed only 0.3% to New Mexico economic output and had lower numbers of workers (1,292), employees in this sector had the second highest average compensation at $101,060. The sector with the highest output of 4.8% included communications, broadcast, and wireless equipment manufacturing; semiconductor and related device manufacturing; and medical and lab instrument manufacturing. This sector had the highest average compensation at $109,473, and a considerably larger number of workers at 7,705. The research and development in physical, engineering and life sciences sector was the top output sector at 7.1% with the largest number of workers at 52,831 and third highest average compensation at $84,704. Combined, these industries contributed $15.6 billion in economic output in New Mexico in 2013. The start-ups are in industries that represent 29% of the New Mexico economy, 18% of New Mexico employment, and 20% of all New Mexico compensation.
The final assessment section in the study looked at STC’s array of technologies currently available for licensing. The tech transfer’s technology portfolio is organized within 15 broad categories for ease of searchability on its website. These categories include catalysts, diagnostics, drug delivery, fuel cells, lasers, lithography, materials, medical imaging, nanoparticles, optoelectronics, pharmaceuticals, semiconductors, sensors, software, and therapeutics. These technologies are in industries with above average salaries, making STC a strong generator of innovative research, new companies, and good jobs for UNM graduates and an expanding, sustainable New Mexico economy.
For more information, contact: