COG Building Entrepreneurial
Culture in New Mexico

William Amt, EDFS Manager, NADO Research Foundation

Editor’s Note: This article is the first in a series that profiles the winners of the NADO Research Foundation’s Pioneer Award for Promoting Entrepreneurship in Rural America. Northwest New Mexico Council of Governments was the first place winner.

In a region plagued by high poverty rates, local governments, tribal authorities, entrepreneurs and community-based agencies are together transforming the northwest New Mexico economy through a project that capitalizes on the region’s scenic beauty and rich Native American culture. The Entrepreneurial Development and the Tourism Industry Project is designed to create a new adventure tourism sector and build wealth in McKinley County, where Native Americans comprise 75 percent of the population and the poverty rate is 35 percent.

The Northwest New Mexico Council of Governments (COG), an economic development district funded by the Economic Development Administration (EDA) in Gallup, has taken a lead role in planning and implementing the project, which grew out of the EDA Comprehensive Economic Development Strategy (CEDS) process. The CEDS determined that despite a downturn in the number of cultural tourists visiting the area, adventure tourism (based on sports, culture, and ecology) is an approach that suits the needs and natural resources of the area. The COG brought together a steering committee made up of community, business and local government representatives to develop a project that would build the economy and community pride.

According to Patricia Lundstrom, the COG executive director, the goal of the project is to create self-employment and microenterprise opportunities for area residents, particularly the Native American population. “To achieve this, we needed to address two key challenges to entrepreneurship in the region, including inefficient economies of scale in a region lacking project delivery organizations with very low population density, and the need for nontraditional business development capital,” said Lundstrom.

Economies of Scale

The steering committee is creating a corporation to administer the development of adventure tourism in the region. It will serve as a marketing, networking, and purchasing hub and business incubator for member microbusinesses that support this sector. Specialized staff (e.g., event planner) will be “incubated” to start independent businesses that contract with the corporation. Two tools that the corporation will use to save businesses time and expense are a feasibility study and marketing plan which were recently conducted and identify market niches and suggested locations and scale for adventure tourism-related enterprises, such as bed and breakfasts, tour operators, bicycle rentals and sign manufacturing.

The corporation will also organize buyers groups so that businesses can purchase goods in bulk, as well as serve as a central locale where customers will be directed to goods and services offered by participating businesses.

Nontraditional Capital

Like many other economic development districts, Northwest New Mexico manages loan funds that target businesses unable to obtain financing from banks. To supplement these, it took the innovative step of establishing an individual development account (IDA) program in 2001. Northwest New Mexico’s IDA builds the assets of low-income people by matching each dollar of their monthly savings with three dollars of private and public sector funds. Program participants enroll in a course on financial management and one related to the asset for which they are saving. For instance, participants intending to open a business receive training in creating a business plan and financial projections. To date, six IDA participants have completed their training and 30 are enrolled in a class that began in October 2002.

For more information contact: Patricia Lundstrom at 505/722-4327 or lundstrm@cia-g.com.

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