< Previous T E X A S E C O N O MI C DE V E L O P M E N T G U I DEby MARK ARENDTHE FDI STATE TO BEATF O RE IG N DI RE C T I N V E S T M E N TPhoto courtesy of KubotaAGAINaimler, Mazda, Nissan, Honda, Toyota and Volkswagen. Pernod Ricard, Heineken and Anheuser-Busch. Bayer, Shire Pharmaceuticals and GlaxoSmithKline. These brands share more than their industry sectors. They belong to a group of more than 1,500 foreign companies with operations in Texas that are responsible for more than 597,000 jobs in the Lone Star State. That’s more than the entire population of Wyoming. About one third — 181,500— work in manufacturing. Companies from the United Kingdom, France and Japan support the most jobs of Texas’ FDI club overall. But in 2017, South Korea, the United Kingdom, Japan, India and France were the top fi ve countries according to IBM’s 2018 Global Location Trends report. Another report fi nding is that Texas DT E X A S E C O N O MI C DE V E L O P M E N T G U I DE has successfully defended its No. 1 rank for job creation from foreign and domestic investment projects. For the second year in a row, it notes, Texas topped the list of U.S. states with approximately 35,700 jobs added as a result of foreign and domestic investment announced in 2017, followed by Arizona with 22,100 jobs and Ohio with 21,400 jobs.By one estimate, more than 1,400 FDI projects took root in Texas between 2011 and 2016, resulting in capital investment of more than $212 billion. It helps that capital investors have 32 foreign trade zones to choose from, a dozen of which are situated at or near ports along the Gulf of Mexico. Six can be found on the border with Mexico, and the rest along Interstates across the state near metro areas large and small. Where Global Is LocalAll Texas regions are home to new and established FDI projects. Toyota Motor Manufacturing, Texas, has been building trucks at its plant south of downtown San Antonio, in South Texas, since 2006. In 2018, OKIN BPS opened its U.S. headquarters in San Antonio, investing $23 million and creating nearly 1,500 jobs. Founded in the Czech Republic in 2004, the company is a leader in businesses process services, IT and telecommunications.“We a ribute our success as a fi rm to the passion, ingenuity, and courage of the people we hire,” said Dan Smith, President and CEO. “We have determined that Texas, in particular, San Antonio, shares OKIN’s values with which we will together usher in continued growth.”In North Texas, home to the Dallas-Fort Worth Metroplex and hundreds of smaller communities, Interamerican Foods Corporation recently opened its La Moderna plant in Cleburne — the Mexican pasta manufacturer’s fi rst in the United States. The $50 million, 150,000-square-foot plant can produce nearly 4,000 tons of pasta per month. It will create 100 direct and 300 indirect jobs for the City of Cleburne and Johnson County.The Houston area is a top destination for foreign energy concerns — Shell, BP and most others are anchor investors in the region. In fact, Gulf Coast Texas, home to the Houston-The Woodlands-Sugar Land MSA, captured 38 percent of Texas’ FDI over the past fi ve years.Austin-Round Rock in Central Texas is where global high-tech fi rms have clustered, such as Samsung Electronics. It’s where you’ll fi nd the Samsung Austin Research Center and Samsung’s only chip fabrication facility in the U.S. Meanwhile, U.K.-based defense contractor BAE Systems is expanding its Electronic Systems sector operations in Austin.In West Texas, foreign-owned renewable energy companies have been active for years. In 2015, the GRI Renewable Industries subsidiary of Spanish multinational Corporacion Gestamp launched plans to build its fi rst U.S. wind energy parts manufacturing plant in Amarillo. It operates 10 such factories in six countries around the world. EDF, the French energy concern, also has a major presence in the region.Not all investors are western European. In June 2018, Kubota Tractor, the North American subsidiary of Osaka, Japan-based Kubota Corporation, completed the purchase of nearly 318 acres of land in Denton County, roughly 30 miles northwest of its headquarters location in Grapevine. “Kubota has considered a land purchase of this nature for quite some time, and with our Grapevine headquarters in such close proximity, the opportunity to expand our operations and research and development capabilities here in the greater Dallas-Fort Worth region makes solid business sense,” said Masato Yoshikawa, Kubota Tractor Corporation president and CEO. T R A D E R E L A T I O N S & L E A D E R S H I P I N E X P O R T Seorge W. Bush was about half way through his first term as president the last time Texas was not the top state for exports. That’s 17 consecutive years of having that distinction. The 2018 export numbers — international trade data from the U.S. Census Bureau and the U.S. Bureau of Economic Analysis — were finalized in March. by MARK ARENDGAnnual Export Value Crosses the $300-Billion MarkNearly half of Texas-made products for export cross the border to Mexico.96 T E X A S E C O N O MI C DE V E L O P M E N T G U I DE98 T E X A S E C O N O MI C DE V E L O P M E N T G U I DEGovernor Greg Abbott marked the occasion, noting, “The Lone Star State continues to lead the nation in exports because of our greatest natural resource — innovative and hardworking Texans. When given the freedom to grow, businesses flourish, jobs are created, and opportunity expands for all Texans. As Governor, I will continue to make strategic investments in education and workforce development to position Texas as the global hub for commerce and trade — and the undisputed center for innovation and intellectual capital.” In addition to the 17-year run, the 2018 trade data also reveal other export-related developments: • Texas is again the top state for technology exports, now for six consecutive years;• Texas exports account for nearly 20 percent of all U.S. exports;• Texas exports in 2018 totaled more than $315 billion — a record breaker for the Lone Star State, and up nearly 20 percent, from $264 billion, the prior year;• Total Texas exports are nearly double that of California; and more than nine in 10 Texas exporting companies are small businesses, according to U.S. Small Business Administration data. A Guide to the Texas State Trade Expansion Program (STEP) The Texas Governor’s Office partners with the Texas Department of Agriculture and the U.S. Department of Commerce to administer the State Trade Expansion Programs (STEP) grant. Texas STEP program includes: Financial Assistance for Eligible Export Activities To encourage Texas companies to enter new international markets and provide the customized assistance needed, the program will provide post-completion reimbursement of up to 75% of eligible, pre-approved, export-related activities (up to $10,000 per year), which may include, but is not limited to: • Customized U.S. Department of Commerce services, including Discover Global Markets Conferences, Initial Market Check/Gold Key Matching Services and International Partner Search • Marketing materials, instructional manuals, website translation and localization services • Foreign market sales trips and trade shows participation • Sample products shipping fees Eligibility • Texas-registered, independent, established (at least one year), for-profit company • Meet SBA “Small Business Concern” size guidelines • Have a product/service manufactured, produced, processed or value-added in USA (at least 51%); • Understand the costs associated with exporting • Not disbarred from receiving state or federal funding The STEP program funds are awarded on the first come, first served basis. To learn more, visit: gov.texas.gov/business/page/trade-and-export“The Lone Star State continues to lead the nation in exports because of our greatest natural resource — innovative and hardworking Texans.” — Gov. Greg AbbottTEXAS EXPORTS ACCOUNT FOR NEARLY 20 PERCENT OF ALL U.S. EXPORTST E X A S E C O N O MI C DE V E L O P M E N T G U I DE 99Energy-related products feature prominently in the Lone Star State’s top 10 exports, naturally. They are (1) petroleum oils; (2) light petroleum oils; (3) crude oil from petroleum and bituminous minerals; (4) liquefied propane; (5) computer parts and accessories; (6) civilian aircraft, engines and parts; (7) integrated circuits, processors and controllers; (8) modems and transmission devices; (9) semiconductor manufacturing equipment; and (10) cotton. Other notable exports include natural gas, data processing storage units and automotive parts and accessories. Where Exports GoMexico and Canada are by far the biggest destinations for Texas products, particularly Mexico, where nearly $100 billion in exports – almost 40 percent of the total – went in 2017. Canada welcomed about $23 billion in Texas exports, followed by China ($16 billion), Brazil ($10 billion) and South Korea ($9 billion). Two Texas companies, both based in Houston, are among the top 10 U.S. exporters: number seven, WM (Waste Management) Recycle America, and number eight, Shintech, a leading producer of PVC, according to The Journal of Commerce. TEXAS IS THE TOP STATE FOR TECHNOLOGY EXPORTS 6 YEARS RUNNING T E X A S E C O N O MI C DE V E L O P M E N T G U I DETexas expects 2.1 million more new jobs by 2026. The chair of the Texas Workforce Commission sheds some light on how those jobs will be lled.W O R K F O RC E D E V E L O P M E NTWRITING ON THE WALLTHE T E X A S E C O N O MI C DE V E L O P M E N T G U I DE hrough the Governor’s Tri-Agency Partnership, the Texas Workforce Commission (TWC) works with the Texas Education Agency (TEA) and the Texas Higher Education Coordinating Board (THECB) and collaborates with key stakeholders across the state’s workforce and educational systems to align current and future industry needs.Appointed by Governor Greg Abbo to the three-member TWC in July 2015, Ruth R. Hughs serves as chair and as commissioner representing employers, serving as an advocate for more than 550,000 Texas employers. TWC’s strategic plan notes the state now has nonfarm employment of 12.5 million and expects to be home to 1 million more jobs by 2023, and another 1.1 million jobs by 2026.“Texas needs more workers at various certifi cate and degree levels, including master’s degrees, to meet workforce needs, especially in critical, high-demand careers,” says Hughs in an email interview. “Preparing those workers to a ain degrees starts with guiding students from P-12 into higher education and through to successful completion.”The following are excerpts from Hughs’ responses to questions from the Texas Economic Development Guide.Describe how the governor’s Tri-Agency Partnership model has helped in solving speci c companies’ workforce challenges.Texas Workforce Commission Chair Ruth R. Hughs:The Skills Development Fund is Texas’ premier job-training program providing training by ADAM BRUNSON THE WALL102 T E X A S E C O N O MI C DE V E L O P M E N T G U I DEopportunities for Texas businesses and workers. BASF Corporation partnered with Brazosport College to provide job training using a Skills Development Fund Grant to train new and incumbent workers. BASF completed two plastic and chemical expansions which contribute to the production of plasticizers used to soften and increase the flexibility of rigid materials like polyvinyl chloride [PVC]. This grant will be used to provide custom training for industry-related topics with focused instruction on chemical plant operations.The partnership between Grayson College and the TWC’s Skills Development Fund has had a significant positive effect on Workforce Solutions Texoma and Finisar Corporation. The skills award provided training for 215 new and 20 incumbent employees.The Healthcare Industry Task Force is the only one in the South Texas region that proactively works with the health care sector to cultivate learning, capacity building, and the creation of innovative solutions to meet the health care needs of South Texas. This initiative has resulted in the largest health care Skills Development Fund grant in the state, a first-of-its-kind dual enrollment Associate of Nursing, provided at no cost to those in area high schools. The creation of the Health Sciences Institute at Renaissance significantly builds regional training capacity in the Workforce Solutions Lower Rio Grande Valley region.The Texas Industry Partnership (TIP) program IndustryNumber Change2016-2026Percent Change2016-2026Health Care and Social Assistance399,49126.1Accommodation and Food Services290,13425.2Educational Services202,63216.3Retail Trade180,56513.8Construction144,34621.2Professional, Scientific and Technical Services131,49519.4Administrative, Support, Waste Management and Remediation Services126,48717.2Wholesale Trade76,08314.3Transportation and Warehousing75,38415.1Manufacturing67,5328.0Source: TexasLMI.com, Popular Downloads, Industry Projections, Statewide projections for industries across all occupationsTOP TEN INDUSTRY SECTORS2016 — 2026supports collaborations between local workforce development boards and industry partners through the leveraging of matching contributions of cash or qualifying expenditures for occupational job training. Entergy Texas found a willing ally in the Education Service Center (ESC) Region 5 to address the company’s desire to recover high school dropouts and support employers in Southeast Texas through a career advancement model that provides an array of education and career counseling, technical skills development, and job development services. Region 5 ESC, in a partnership with Entergy Texas, Workforce Solutions Southeast Texas, and two campuses of Lamar State College, implemented the first Jobs for America’s Graduates (JAG) program in Texas. JAG is a state-based, national nonprofit organization dedicated to supporting young people, ages 16–24, who are most at risk due to physical, environmental, psychological and work-related life barriers. T E X A S E C O N O MI C DE V E L O P M E N T G U I DE 103Ruth R. Hughs,Chair and Commissioner Representing Employers, Texas Workforce CommissionNext >