Business

3 Reasons Why Texas Is A ‘Winning’ Hub For Business

Remember when Texas and the middle of the U.S. were known as Flyover Country? Those days are over. So, what exactly has changed? Well, in Texas, it’s been a virtuous cycle of “winning” on all levels — especially for business. Not to be cliche, but winning begets more winning. For the state of Texas, this encompasses three core themes.

Texas attracts talent.

The ability to attract talent is at the heart of a thriving ecosystem. For Texas, it has been a combination of growing hometown talent over multiple decades combined with an influx of inbound talent. As cities, including Austin, drive a wave of venture capital firms, CEOs with a history of successful exits, developer talent, and sales and business development talent into the Lone Star state, the talent in Texas now has a multiplier effect in play.

The foundation of a generational hiring spree has been established with companies including Meta, Google, Tesla and Apple setting up hubs across the state. Reportedly spurred on by an influx of tax incentives, Samsung recently announced it’s growing across “Big Tech” to invest in the creation and jobs to support a $17 billion chip plant in Taylor, Texas.

Ongoing investment in STEM jobs has resulted in multiple Texas cities making a strong showing in the outlook for STEM job growth. The talent across the spectrum of tech, science and the core Texas vertical industries of strength — including energy, healthcare, logistics, retail and legal — have all of the right ingredients to create a strong ecosystem now and the prospect of a future explosion of talent to power the state.

The historical venture capital gap is closing.

Given the momentum of talent and jobs, venture capital has been historically slow to catch on to the wave. The secret in the Silicon Hills — that there is another tech ecosystem beyond Silicon Valley — is no more. When compared to the massive $135.1 billion of venture capital funding deployed in California last year, Texas still has significant room to grow at $6.9 billion. A number of homegrown Texas funds have raised new and oversubscribed funds to close the gap: LiveOak Venture Partners recently announced a $210 million fund dedicated exclusively for Texas startups. Last year, Silverton Partners raised $144 million also to double down on Texas startups.

Add to this momentum a new crop of venture firms with roots in Silicon Valley, and prolific investors including Joe Lonsdale and Jim Breyer relocating from the Bay Area to Austin. Outside investors have caught on to the nearly $2 trillion (and growing) economy in Texas. The venture capital dollars that were once reserved for coastal startups are now fueling the Texas economy and creating a virtuous cycle of winning.

Texas is capitalizing on synergies across multiple emerging tech hubs.

While Austin tends to dominate recent headlines as one of the top places to relocate to in the entire country, Texas can be viewed at its core as one large market dominated by multiple emerging technology hubs. Austin has a long-standing history in the semiconductor market and more recently has emerged as a logistics hub and a CPG hub based on what has been dubbed as The Whole Foods Effect.

Houston is a world-class city in its own right and is attracting VC investment for software disruption across legacy industries including oil and gas, legal and life sciences. Dallas has significant job creation across the finance, healthcare and education markets and a thriving professional sports scene. San Antonio sits outside of the “Big 3” in terms of job creation. However, the city has carved out a thriving cybersecurity community and is doubling down on boosting the number of cybersecurity startups emerging from the city.

The one factor that has not been considered as an accelerant to the momentum for Texas is that while its roots are in oil and gas, Texas is now investing in transportation infrastructure that will bring all of these great cities together. A number of prolific high-speed options are gaining funding and momentum. Dallas is one step closer to a bullet train or hyperloop breaking ground, and the recently passed Infrastructure Bill is capturing government funds that will make a trip from Dallas to Houston possible at 200 mph by 2026.

The synergies of early-stage startups focused on software innovation across the legacy Texas industry combined with massive investments in the broader infrastructure for the state indicate we’re only at the beginning of the bull run for Texas. As more VC dollars are invested across Texas and the world-class cities in Texas continue to attract premier talent, the state is poised for multiple decades of job and wealth creation that can span every type of economic climate, powered by a business-friendly tax policy and the right balance of culture embodied by the “work hard, play hard” lifestyle that Texans know and appreciate.

Winning begets more winning. The cycle continues.

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