Texas, more than oil & gas
Petroleum Refining & Chemical products
Traditionally, Texas is known for its lucrative oil & gas industry with the oil derricks on almost every image of Texas. And not without reason; with 32 energy-related companies on the Fortune 500 list, approximately 100.000 workers and Houston being the ‘Energy Capital of the World’ with more than 5.000 energy related firms, Texas still is the largest petrochemical cluster in the world.
But there is more. Learning its lesson by oil and natural gas downturns in the early 1980s, the Lone Star State has diversified its economy, causing overall Texas revenues to be less dependent on oil and gas. Guided by the state’s official motto ‘keep Texas de beacon of opportunity’, Texas attracted industries like life science & health, aerospace, computer & information technology which puts Texas in a skill-based economy, less dependent of volatile oil prices. See the article Texas’ Lifestyle on how Texas can be and wants to be the ‘beacon of opportunity’.
Last March alone was marked by three announcements of three companies moving their business to Texas; Health care company McKesson Corp. to the Dallas area, Pegasus food with an 80.000 square foot manufacturing plant in Rockwall, followed by the Swiss dermatology company Galderma who decided to expand its current North- American headquarters to Forth Worth to support research, development and training. In the two months that followed, also Mitsubishi and BMW moved their locations to resp. Houston and Galveston. Also state capital Austin is more and more the haven for an increasingly wide variety of startups. This technological expansion beyond oil and gas makes Texas one of the fast growing’s economies, adding more than 1.8 million jobs since 2007.
Biotechnology & Life Sciences
The Texas Medical Center (TMC) is the world’s largest medical complex, and is also home to the world’s largest children’s hospital—the Texas Children’s Hospital— and the world’s largest cancer hospital—MD Anderson Cancer Center. Texas is home to more than 3.900 life science and research firms with approximately 97.600 workers in the field. Texas is the nation’s leader in biotechnology with 1.200 biotechnology-related manufacturing and R&D firms and 31.000 workers. Texas also has leading roles in animal and agricultural biotech as the # 3 overall producer of agricultural products in the US. But also many of the biggest players in the medical equipment and supplies industry and global pharmaceutical companies have corporate facilities in Texas.
Since the discovery of the Spindletop oilfield in 1901, Texas has embodied the production of energy. The Energy cluster is made up of three sub-clusters: oil and gas exploration and production; electric/coal/nuclear power generation; and renewable and sustainable energy generation. Next to the fact that Texas is the nation’s biggest producer of crude oil, Texas is also #1 in total energy production, biodiesel production capacity and solar energy potential. Texas leads the US in installed wind capacity ranking #2 nationally for employment in the renewable energy industry. A big advantage of Texas is the fact that they are the only state with an independent power grid, causing Texas’ electrical transmissions and new energy development to be free of federal regulation.
Advanced Tech & Manufacturing
The advanced technology and manufacturing cluster is made up of three sub-clusters: nanotechnology, semi-conductors and automotive manufacturing. The manufacturing industry employs over more than 899.500 Texans, with Toyota and GM as the two biggest manufacturing employers in the state. Texas exported for more than $23.2 billion of transportation equipment in 2014.
Aerospace, Aviation & Defense
Texas is one of the most important locations for the global aerospace and aviation industry and with 130.000 workers over 1.300 establishments, the nation’s #1 employer for workers in this field. Among them are Boeing, Lockheed Martin, L-3 and Bell Helicopter operate aerospace product manufacturing facilities in Texas. 14 aerospace companies perform defense contracts in Texas. As home to the headquarters of two international airlines, Southwest and American airlines, and two of the world’s busiest airports, as well as NASA’s world-famous Johnson Space Center, the state is key for many of the largest global aerospace and aviation companies.
Information & Computer Technology
Texas is de #2 employer in the USA in computer and video games, with more than 13.600 employees working in this field. Texas is also the birthplace of the Texas Instruments handheld calculator in 1967. Texas is home to over 17.600 technology firms, including Dell, Microsoft, Texas Instruments, HP and Cisco, employing more than 203.700 workers, which places Texas on the second place, right behind California. With more than 30 of Silicon Valley’s largest companies operating major corporate headquarters located in Texas, Silicon Valley has found his second home in Texas. Because of the excellent research & development programs, attractive tax legislation for data centers, qualified employees and central location, Texas is an ideal location to set up a data center.
According to the Austin Technology Council, 1/3rd of the jobs in Austin are technology-related, with big name companies like Apple, Google and Facebook opening offices in Austin in recent years. Entrepreneurs from both coasts are equally armored with Texas’ capital. This is partly caused by the rich talent base present in Austin with engineers, programmers, designers and marketers who want to work on a small team and make a big impact.
Besides that, the state of Texas is #2 in the nation for science and technology and according to the National Security Agency, San Antonio TX itself is ranked #2 in the nation for cybersecurity due to its education, talent and business, behind only Washington, D.C.
Logistics (Infrastructure & Water)
Texas has a number of challenges to face when it comes to Infrastructure. As the second largest state in de US, they have the most state high way miles in the country and 59% more bridges than any other state. Despite this huge network of highways, overall maintenance and funding for traditional projects have declined. Texas now ranks 43rd in highway spending per capita. According to the 2012 Report Card for Texas’ Infrastructure, half of the infrastructure categories received unsatisfactory grades to keep Texas competitive and to remain one of the fastest growing and strongest economies.
Water supplies are a critical issue for Texas. Most of the available water is located in the Eastern part of the state, while the big demand is in the middle and western parts. The Texas Water Development Board (TWDB) estimates about $212 billion will be needed in 2060 for water supplies, treatment and distribution, waste water collection and some flood control projects. There are 725 significant hazard dams (with a potential loss of life) who do not have regular inspections or maintenance.
Texas still has no statewide floodplain management plan and is not a participant in the National Flood Insurance program. Texas leads the U.S. in terms of dollars paid for flood claims. Other than low-interest loans and small grants, Texas does not fund flood control infrastructure. Although in the last few years two important constitutional amendments have passed by Texas voters – dictating billions of dollars of revenue annually form sales taxes to the State Highway Fund- a lot need to be changed and can be improved when looking at the Texas’ Infrastructure. Thus, creating opportunities for Dutch companies.
The creative industry provides a vital economic engine for Texas. The creative industry includes everything from gaming, music, film, dance, (visual) arts until marketing. There are 10.000 arts and culture industry business located throughout Texas, employing nearly 120.000 workers. The creative sector in total employs nearly 730.000 innovation workers in good, high paying jobs.
Art generates $5.1 billion for the state’s economy and contributes nearly $320 million in sales tax revenues annually. According to research commissioned by the Office of the Governor, Economic Development and Tourism, one of the major reasons visitors come to Texas is the arts and culture. 3 of the top 12 activities for non-resident visitors are arts (museums, exhibits), culture (concert/theatre/dance) and festival-related activities. Awareness of arts & culture is strongly supported amongst the Texans, resulting in good arts education in school and state agencies like Texas cultural trust and Texas Commission on the arts. What part of the creative industry is highlighted in the different areas of Texas can differ from one area to another.
Austin for example is well known for its music industry, accommodating a lot of live bands on the streets and the yearly SXSW- festival, while the Houston ballet academy is well known around the world. A big art of the creative industry exists thanks too private funding.
Besides that, Austin and San Antonio are both well known for their numerous start-ups in the creative industry every year and have a growing start-up culture. In particular Austin has more and more the status as a hub for start- ups (a.k.a. Silicon Valley’s second home) with the most startups per capita in the country. Both cities have a flourishing ecosystem for startups where incubators, entrepreneurs, technologists, developers, makers, creatives and (angel) investors work together in big entrepreneurial communities to help each other build businesses and mentor each other.
Examples of these co-working spaces are Geekdom in San Antonio and Capital Factory in Austin. At Capital Factory, every night a couple of hundred engineers and programmers are present for meet-ups, events and hack-a-tons. Houston is also developing his image as a start-up environment with incubators like TMCx for start-ups in the medical field and Houston Technology Center for start-ups related to the tech industry.
There’s a special program at UT’s MC Combs School of Business which transforms students in future entrepreneurs and helps raise start-up capital.