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Texas Today: Strong Business Environment and Innovation Spurs Job Creation

What recession? Texas can boast cheerful headlines and the creation of thousands of new jobs.

Steve Stackhouse-Kaelble (April 2012)
Positive news headlines have been in rather short supply in many U.S. places, but not so in Texas. Recently, Apple Inc., Boeing, GE Transportation and Continental Automotive Systems have all announced major job-creating projects within the State. Positive news headlines have been in rather short supply in many U.S. places, but not so in Texas. Recently, Apple Inc., Boeing, GE Transportation and Continental Automotive Systems have all announced major job-creating projects within the State.
Things were tough all over during the Great Recession. Now that there's more economic optimism in the air, it's worth taking a look around the country to see how individual states are faring. It turns out that Texas tops the charts, with the highest number of jobs added since 2008.

Research by ON NUMBERS, crunching U.S. Bureau of Labor Statistics data, found that just four states have not only regained all the jobs they lost to the recession but have actually added employment on top of the baseline. Texas is one, along with Alaska, Louisiana, and North Dakota. The stats show that Texas is now ahead by nearly 140,000 jobs, and boasts a jobless rate that's a full percentage point better than the national average.

So what's up with Texas? For one thing, Texas offers a friendly business environment, according to Larry Gigerich, managing director at Ginovus, a site selection and incentives consulting firm. The state's "excellent business climate has created more opportunities for Texas to compete for projects," he explains.

A similar assessment comes from David Brandon, senior vice president at Site Selection Group in Dallas. "Texas has continued to prosper economically in comparative terms," he says. Like most other places, the state continues to experience some ups and downs, he notes, but its overall trend is good, bolstered by strength in a number of desirable economic sectors, from energy to healthcare to technology.

Strong, Diversified Industrial Sectors "Clearly, one sector with a great tradition in Texas is energy," Brandon says. That in itself is nothing new - after all, they've been drilling for oil there for more than a century now, and the state's refineries are national leaders in both crude production and refining. A major twist that's driving the sector now, though, is new technology opening up oil and natural gas mining within the state's major shale formations. Hydraulic fracturing combined with horizontal drilling is allowing energy companies to tap into deposits that were previously out of reach, and the result is the creation of thousands of Texas jobs. Texas also leads the nation in wind power generation and has the world's two largest wind farms - and it's also prime real estate for solar power generation, with enough solar energy shining on each acre of Texas land every year to equal 800 barrels of oil.

Brandon also sees growth in manufacturing. A lot of cost-sensitive but labor-intensive manufacturing happens along the border with Mexico, but great manufacturing stories are being reported all over. Advanced technology and manufacturing are thriving, led by top-notch research facilities and many thousands of workers experienced in technology disciplines. This, too, is really nothing new - Texas was the birthplace of the integrated circuit back in the late 1950s.

"You'll also find tremendous and continuous growth in health services," Brandon says. The state's biotechnology sector generates an estimated economic impact of $75 billion each year, with thousands of firms working in biotech manufacturing, research, or testing. Additionally, more than 25,000 high-tech firms lead the state to prominence in information and computer technology - including such household names as Dell and Texas Instruments. And, Brandon points out, defense remains a strong sector, too. The state has 15 active military bases plus a continually growing aerospace and aviation sector that provides work for more than 200,000 people.

Gigerich adds more highly active sectors to the list, including corporate offices, financial services, contact centers, and data centers. "I think these sectors will continue to do well, and as the population of the state continues to grow, distribution and logistics will become more important."

The Dallas suburb of Richardson provides a good example of the explosion in data centers and cloud computing. About a dozen data centers are there now, and four or five more are in the works. Across the Dallas area, cloud computing could create as many as 24,000 jobs in the next few years, according to a recent study conducted by IDC.

Gigerich notes that the Lone Star State is gunning for businesses that have historically enjoyed prominence on the West Coast. "Texas has been very aggressive in trying to attract California companies," he says. "In particular, information technology and financial services companies view Texas as a very attractive location for new and/or expanded facilities. In addition, contact centers - due to the bilingual population - and manufacturing have been key sectors looking to expand into Texas."

Texas Success Stories
Positive news headlines have been in rather short supply in many U.S. places, but not so in Texas. Check out a small sampling of the recent job-creating developments that have helped put the state on top of the list of employment growth. What's particularly striking about this list is the diversity of the projects, from automotive to aerospace to energy to customer support.


To these happy headlines, Gigerich adds impressive growth involving Charles Schwab in Austin and Oracle Corp. in Dallas-Fort Worth.
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Article Discussion

A Letter from Rick Perry, Governor of Texas

Rick Perry Greetings:

Texas Wide Open for Business is more than just positive thinking. It’s an environment we’ve created in the Lone Star State to foster business and entrepreneurship — to train the workforce of the future and make Texas the best place to live, work, and raise a family. I invite you to bring your company to Texas to take advantage of our fundamentally strong economy as a stepping-stone to success and prosperity.

As a global leader in economic development, Texas is committed to working with employers worldwide to ensure the ideal conditions for job creation and economic prosperity. Our infrastructure, geographic location, and business climate are optimal for business expansion and relocation.

Texas is recognized around the world for its pro-business climate. In 2013, CNBC named Texas “America’s Top State for Economy and Infrastructure,” adding to our state’s growing list of accolades. Texas has also been named the “Best State to Do Business” by Chief Executive magazine for the past nine years in a row. If Texas were a nation, it would rank as the 13th-largest economy in the world based on GDP, and Texas has been the nation’s top exporting state for 12 years. Texas has also created more private-sector jobs than any other state in the nation over the last 10 years.

In addition to our superior quality of life and robust economic climate, the Lone Star State has one of the lowest business tax burdens in the United States.

Texas also levies no personal income tax, which allows businesses to pass on more value to their employees. We also offer a number of attractive incentives, such as the Texas Enterprise Fund and the Texas Emerging Technology Fund, which have helped bring thousands of jobs to Texas.

In short, Texas is doing what it takes to help businesses succeed and create jobs in our great state. To explore how your business could prosper in Texas, contact Jonathan Taylor, executive director of my Economic Development and Tourism division, at (512) 936-0101 or jtaylor@governor.state.tx.us.

Sincerely,
Rick Perry signature


Rick Perry
Governor of Texas

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