The Economist: Omnipresent oil

Texas has won the “Governor’s Cup” – for the tenth consecutive time! Site Selection magazine awards the Cup to the state with the most major corporate locations and expansions each year. To be counted, projects must involve a capital investment of at least $1 million, 20 or more new jobs, or 20,000 square feet of new construction.

For 2021, Texas had an astounding 1,123 qualified projects (more than three per day), which is 342 above 2020 (and the most ever recorded). This total more than doubled second place Ohio (with 507) and far outpaced the remainder of the top five of Illinois (480), California (301), and North Carolina (282). 

Some of the Texas triumphs are truly massive. The state is the site of four of the top 10 projects in terms of capital investment, including the largest (the $30 million Texas Instruments semiconductor facility in Sherman) and the third largest (the $17 million Samsung semiconductor plant in Taylor). Others include Nacero (industrial gas) and Covestro (chemicals). Switch (data processing) is among the largest in terms of square footage. The Texas Instruments project, Amazon.com (retail merchandise), and Maxter Healthcare (surgical supplies) are near the top for employment. It’s quite a diverse group, illustrating the state’s competitiveness across a broad spectrum. 

There are multiple factors that engender an accomplishment of this magnitude, reflecting both natural endowments and enlightened decisions spanning generations. Texas has a young population, favorable location and climate, infrastructure to support global commerce, competitive costs, attractive incentive programs, regulatory efficiency, and the sheer inertia of ongoing success and the resulting clusters of activity. 

Several newer initiatives are further supporting expansion, one being the greater investment in basic and applied research at Texas universities. We have frequently analyzed the potential benefits of research universities (including the study underlying the legislation that increased funding). The impact that they have on the most innovative aspects of the economy is profound, from fostering discoveries and their commercialization to providing a stream of highly skilled graduates, Broadband deployment and support are also critical to continued economic growth (particularly following the pandemic), and recent efforts have been notable. 

Texas and its talented cadre of economic development professionals are doing many things well, and the proof is in the numbers. There is always room for improvement, such as reinstating Chapter 313 or a similar program, a key tool which will expire at yearend, and making the investments necessary for world-class public education and job training for a growing and diverse population. Texas must also avoid discriminatory social policies which hamper the ability to attract knowledge workers – and their employers. A decade of dominance is laudatory, but economic progress is inevitably forward-looking.

Let’s keep it up! Stay safe! 

Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com), which has served the needs of over 2,500 clients over the past four decades.