When Texas launched its five-year economic development strategic plan last year, the state left little doubt over its primary goal, because the goal was stated in the name of the plan: “Bigger. Better. Texas.”
“We plan to maintain our competitive edge in the years ahead,” says Adriana Cruz, executive director of the Texas Economic Development & Tourism Office (EDT). “It’s a five-year economic development strategy for the state and our blueprint for continued economic prosperity.”
She notes that the plan “came together in collaboration with state agency partners, business and community leaders, economic development organizations and industry associations to accomplish a number of objectives.”
She then listed the objectives:
- Establish a unifying vision for the future of the Texas economy.
- Identify target industry sectors and clusters expected to drive strategic economic growth and job creation.
- Outline objectives and initiatives to advance the state’s global competitiveness.
- Provide data and recommendations to inform economic development decisions across the state.
“By working together with a shared vision and strategy on the local, regional and statewide level, Texas will continue to be the economic beacon of America,” says Cruz.
Three pillars of the plan are retooled incentive programs designed to enhance the state’s overall competitiveness: the Texas Jobs, Energy, Technology and Innovation (JETI) Act; the Texas Semiconductor Innovation Fund (TSIF); and the Texas Enterprise Fund (TEF).
“Texas is focused on having a robust portfolio of programs,” says Cruz. “JETI is a property tax value limitation on the school district portion of the property taxes. This program replaces the old Chapter 313 program that expired in 2022. JETI is a property tax abatement program for large capital-intensive projects. It requires an agreement between the Governor’s Office, the local school district and the company.”
About 20 JETI agreements have been announced to date. The first award went to Bell Textron to support the establishment of the firm’s 400-job, $429 million Manufacturing Technology Center in Fort Worth. Another award went to support Eli Lilly’s $6.5 billion Generation Park plant project in Harris County, where 600 new jobs will be created as part of the deal.
The Texas Semiconductor Innovation Fund (TSIF) was signed into law in 2023 as part of the Texas CHIPS Act. “TSIF is designed to help Texas maintain our leadership in semiconductor technology by establishing grants for semiconductor research, design and manufacturing,” says Cruz. “We created a new division called the Texas Chips Office. It oversees this fund and the Texas Semiconductor Innovation Consortium.”
In 2024-2025, the state awarded 23 TSIF grants totaling $400 million to projects that upon completion will invest $7 billion and create 850 new jobs in Texas.
“TSIF is also for workforce development,” says Cruz. “Some community colleges like Temple and Austin community colleges received TSIF workforce training grants. These funds are going to support worker training programs for manufacturers like Samsung and others in the semiconductor field in Texas.”
She adds that a key differentiator is that “unlike the federal CHIPS Act program, ours helps design firms like Silicon Fabs.”
Cruz adds that the “Texas Enterprise Fund is the most well-known financial incentive we have. It’s been around since 2004 and is performance-based. When Texas is competing with an out-of-state location, we have the ability to award TEF incentives to seal the deal.”
Last year, Texas announced $23 million in TEF awards to support projects that bring in $4 billion in capital investment and create 2,800 direct jobs. TEF recipients included Scotia Bank, Southwest Airlines, TMIC Corp. and Eli Lilly, among others.
Cruz says the state made other modifications to its strategic plan as well. “We updated our industry clusters. We brought together a big group to assist us with this,” she says. “It included higher education partners; economic developers from all parts of Texas; industry associations; and many other leaders from around the state. We will continue developing the Texas Strategic Plan for economic development for the next five years to build the stronger Texas of tomorrow.”
The strategic plan also divides the state into 10 regions. “We took a close look at the data and assets in each region,” says Cruz. “We identified 10 industry clusters and sub-industry clusters within each one. Texas is such a big state with a highly diverse economy.”
When I asked Cruz to assess the early returns of the strategic plan, she said, “It has been very successful. We have changed our organizational structure. We have organized it around these industries. The Texas Life Sciences Summit released its strategic plan and it mirrors ours in structure. That is a great testament to the work we have done.”
Looking even further into the future, Cruz says that “we are very excited about the growth of the space economy and AI infrastructure. Texas is the fastest growing data center market in the U.S. right now and we are prepared for it. We are the largest producer of electrical energy in the country and produce more electricity than states two and three combined. We are very well prepared to lead the nation in that area. Gov. Greg Abbott is right. The future will be in space, AI and microchips.”
Cruz says another industry to keep an eye on is shipbuilding.
On February 11, Gov. Abbott announced that Davie Defense Inc. will expand its shipbuilding capacity in Galveston and Port Arthur to build Arctic icebreakers. The expansion creates more than 2,400 jobs and represents $730 million in capital investment. To support the deal, a TEF grant of $21.77 million was awarded to the company.
Canada-based Davie Defense said its goal is to make its Texas operations “ground-zero for the revitalization of the American shipbuilding industry.”
“Davie Defense is proud to deepen our commitment to Texas,” said Kai Skvarla, CEO of the Vienna, Virginia-based U.S. subsidiary of Davie Defense, which maintains its global headquarters on the St. Lawrence River in Lévis, Québec, where Canada’s largest shipbuilder has been making big ships since 1825.
“Texas has one of the world’s most business-friendly environments and the scale to support complex shipbuilding — a capability we’re bringing back to Texas for the first time in generations,” said Skvarla. “Our investment will serve American industry and the U.S. government for decades to come, starting with Davie’s globally recognized specialty: the polar-capable icebreakers critical to U.S. national security.”
Cruz says this announcement will be a boon for Texas. “The shipbuilding industry in Texas just went from zero to 100 with the announcement of the Davie Defense project,” she says. “There is a call for more shipbuilding to be done in the U.S. These new ships produced by Davie will be icebreakers for the U.S. Coast Goard. The opportunities that this investment will bring on the Gulf Coast are enormous.”
