Let high tech replace fracking economy - Albuquerque Journal

How can New Mexico use its tax revenues to build a private-sector economy that provides long-term jobs and a stable tax base before fracking becomes economically unattractive? We believe the answer is to educate a high-tech workforce that creates start-up companies and serves as a magnet to attract high-tech companies.

Renewable energy, movie making and cannabis growth are also options. However, after installation renewable energy has only 25 permanent jobs per gigawatt; movie making requires massive taxpayer subsidies, generates transient jobs and pays modest salaries; and many states are competing to gain a piece of the elusive, if not imaginary, cannabis cash cow. …

New Mexico should focus its investments in high-tech education, emphasizing artificial intelligence (AI), data analytics, cybersecurity, Internet of Things (IoT), augmented reality (AR), robotics and machine learning (ML). These subjects can be embedded in multiple majors in New Mexico’s universities and community colleges. UNM already offers online masters study in IoT that could be expanded to other high-tech topics. …

The economic potential of high-tech is proven and supported by data:

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• Thirty-seven percent of the Standard & Poor’s 500’s gain since 2013 is due to the high-tech companies Alphabet, Amazon, Apple, Facebook, Microsoft and Netflix.

• Over five years the world’s 10 largest tech firms have tripled their investment in the economy. High-tech accounts for 20% of firms’ investment and 50% of private sector investment growth.

• Over the past decade, about 40% of American venture capital deals were for companies in the software-as-a-service (SaaS) sector.

• N.M.-based Intel has acquired Habana Labs, an Israel-based developer of programmable deep learning accelerators for data centers for $2 billion. This strengthens Intel’s AI portfolio and accelerates its efforts in the fast-growing AI chip market, which should reach $25 billion by 2024.

• While the U.S. economy grew 2.1% a year, professional, scientific and technical services grew 7.4% in the second quarter of 2019 after growing 8% in the first quarter.

• AI developers and ML engineers are earning more than $200,000 per year. Between 2015 and 2018 there was 344 percent growth in ML job postings.

• AI has the potential to add $13 trillion or 1.2% of global GDP growth per year. Worldwide spending on AI reached $35.8 billion in 2019 – two-thirds spent in the United States – and will grow to $79.2 billion in 2022.

• In 2018, 1,800 new AI-based start-up companies raised $19 billion in equity funding. AI-intensive cybersecurity is estimated to be valued $300 billion by 2025.

• AI-intensive IoT could have an annual economic impact up to $11.1 trillion by 2025 across many different settings, including factories, cities, health care and retail.

• In 2018 Provo-Orem, Utah, was ranked No. 1 for job creation, salary growth and high-tech adoption. Provo’s growth comes from its high-tech sector. Provo’s Brigham Young University has spun-out five firms, each valued over $1 billion – i.e. unicorns. …

Only 3% of U.S. universities graduate 90% of today’s “unicorn” founders. The University of New Mexico, New Mexico State and the New Mexico Institute of Mining and Technology, with assistance from federal government labs here, must join that elite group, embed high-tech and entrepreneurship coursework throughout their curricula and help New Mexico grow a private-sector, high-tech economy that leaves fracking in its rear-view mirror.