hoever said that everything is bigger in Texas knew what they were talking about. Coming off a record 11th consecutive win in the race for the Site Selection Governor’s Cup — an award given annually to the state that lands the most corporate facility investment projects in the U.S. — Texas continues to achieve economic development results that outpace the nation.
Serving on the front line of that effort is Adriana Cruz, executive director of Texas Economic Development & Tourism for the Office of Governor Greg Abbott. Leading that effort is no small task, which is why we turned to Cruz for further analysis and insight.
Congratulations on winning a record-setting 11th straight Governor’s Cup award from Site Selection magazine. What is your reaction to this news?
CRUZ: The initial reaction is just such pride and such gratitude. We do not take this for granted. We work very hard to report these projects and communicate with our local partners. We work with state leadership to make sure Texas has the best business climate in the nation and to make sure this remains a place that companies want to expand.
Now that the Chapter 313 statewide tax incentive program is sunsetting, what will follow it?
CRUZ: The governor spoke about this recently in his State of the State Address. The governor has been talking about the need for local communities to have the tools they need to continue to be successful. House Bill 5 is the Texas Jobs and Security Act — a tool to replace what has been the Chapter 313 program. We have great interest in seeing that Texas remains competitive for jobs and industry.
Will there be any changes to the sales tax legislation that funds local economic development?
CRUZ: We do not anticipate any changes to that sales tax revenue program. From a local perspective, that is a very important funding source for economic development at the community level.
How did Texas respond to the deep freeze that shut down major portions of the energy grid throughout Texas a few years ago?
CRUZ: We made major grid changes. Gov. Abbott signed 14 bills last legislative session related to grid resiliency and ensuring that the necessary changes were made to the weatherization of the grid. There will be continued emphasis on ensuring that we have appropriate infrastructure on the grid side and on the transportation side. A $100 billion infrastructure plan was announced in the past month for transportation.
“Texas is now the headquarters of headquarters. We have more Fortune 500 headquarters than any other state in the nation.”
— Adriana Cruz, Executive Director, Texas Economic Development & Tourism
What’s driving the recent wave of large-scale investments into the semiconductor manufacturing supply chain in Texas?
CRUZ: We’ve seen significant investments from Samsung, Texas Instruments and Global Wafers. Our vision is to be the global leader in semiconductor manufacturing. Texas is, after all, the birthplace of the integrated circuit. That sector is important to the state and the nation. In the U.S., Texas is the best location for that industry. We are looking at the future as well. Our universities are all working on advanced manufacturing, materials sciences, etc. We are looking at the future of technology as a whole. Related to the federal CHIPS Act, Gov. Abbott established the National Semiconductors Task Force in Texas. This task force is discussing how Texas can be prepared for the coming funding of the CHIPS Act. That’s why Gov. Abbott responded by supporting the Texas CHIPS Act, which looks to ensure that Texas has the strategy and resources needed to compete in this sector.
You’ve also seen sizable investments recently from several notable firms in the automotive manufacturing sector. What’s driving that surge?
CRUZ: The automotive sector is incredibly important in our state. We have seen recent announcements from General Motors, Toyota, Tesla and DeLorean. Suppliers to these innovative companies are expanding too. It comes down to our workforce. We have the second largest workforce in the country. It is productive, diverse, well-trained and skilled.
What are you seeing on the energy front in your state, particularly in oil and gas?
CRUZ: Texas is the energy capital of the world. We are very proud of our oil and gas heritage. It is a very significant part of our economy. The petrochemical side and the liquefied natural gas (LNG) side are both expanding. Most recently, Sempra announced the launch of its Port Arthur LNG Project in Jefferson County, expected to create a whopping $13 billion in capital investment and thousands of jobs during construction. Also, there is the renewable energy side. We are the top state for wind production. We will soon be the top state for solar production. We are seeing a lot of blue hydrogen and green hydrogen investment; and we are seeing a lot of activity in alternative fuels.
What’s happening with aerospace, aviation and defense spending in Texas?
CRUZ: Aerospace, aviation and defense are extremely important industries for Texas. We have significant numbers of companies in aerospace and aviation that call Texas home. The space economy has its origins here in Texas, from the days of NASA in Houston during the 1960s. New companies like Blue Origin and SpaceX are growing here, as well as rocket testing and satellite development. Technology overall is incredibly strong in the state, including centers of excellence in cybersecurity for example.
What other industries are growing right now in Texas?
CRUZ: When we talk about advanced manufacturing, we also need to add in food production. Food manufacturing is becoming more advanced and more focused on technology. We have seen a significant increase in food production projects looking at the state. Our state is so large and so diverse. There are a lot of opportunities for expansion in both the rural and urban areas of the state.
55 Fortune 500 companies are headquartered in Texas – more than California and New York.
Source: Fortune magazine
Beyond these sectors, Texas continues to win corporate headquarters relocation projects. When people think of Texas, they think of manufacturing and oil and gas, but we are seeing a lot of increase in headquarters expansions and relocations, as well as new investments in the financial services sector. Texas is now the headquarters of headquarters. We have more Fortune 500 headquarters than any other state in the nation. That may be the first time ever. Last year, Fortune magazine listed 53 Fortune 500 headquarters in Texas. Caterpillar became No. 54 last year. That is more than California and New York. Also, small to medium-sized companies are relocating to Texas. Since 2015, there have been 280 headquarters relocations to Texas. That is a significant number of jobs.
What’s happening on the international business front?
CRUZ: Texas has been the top exporting state in the nation for 21 years in a row and tops in tech exports for 10 years in a row. We also lead the nation in foreign direct investment over the last 20 years. From automotive manufacturing and semiconductor suppliers to food production and other sectors, we are seeing interest from companies from all over the world.