Welcome to Texas! No pandemic pause for companies moving to and expanding in the Lone Star State

Big Fish

Texas’ efforts to attract business have paid off in a big way. High-profile announcements include these:

• Tesla chose the Austin area for a gigafactory and its headquarters relocation.
• Hewlett Packard Enterprise (HPE) moved its headquarters to Spring (near Houston).
• Oracle decided to move its headquarters to Austin.
• Texas Instruments announced a potential $30 billion project in Sherman, including up to four chip fabrication plants.
• Amazon is also expanding. The company says it has invested more than $29 billion across the state since 2010, including infrastructure and compensation to employees.
• Samsung announced a new semiconductor manufacturing facility in Taylor (near Austin).

The $17 billion announcement by Samsung Electronics Co. Ltd. in 2021 was described as the largest-ever foreign direct investment in Texas; Gov. Greg Abbott’s office in November said the project would bring the South Korean company’s investment in the state to more than $35 billion since 1996.

It brings Samsung’s total U.S. investment to more than $47 billion and more than 20,000 U.S employees since beginning operations in the country in 1978, according to the company.

The incentive package that helped land the Taylor deal, including property tax incentives, totaled $981 million, according to an analysis by the Austin American-Statesman.

“This was a competitive process and tough competition; however, the Taylor site in Williamson County, Texas, was chosen because the opportunity here met the business, talent, and community needs Samsung sought throughout the search,” says Michele Glaze, head of communications and community affairs for Samsung Austin Semiconductor.

Samsung considered factors such as the local semiconductor ecosystem, infrastructure stability, local government support, and community development opportunities, as well as the Taylor site’s proximity to the company’s existing Austin facilities, Glaze says.

“Economic development incentives are valuable in recruiting companies to Texas,” she says. “It was clear to us how deeply Taylor, Williamson County, Taylor ISD (Independent School District), and the state of Texas wanted to compete. They approved the most competitive economic development package that will help our company and our employee family succeed for decades to come. These economic development opportunities mixed with Texas’ pro-business environment were a powerful combination.”

Amazon looks first for talent when making its investment decisions, says Holly Sullivan, the company’s vice president of worldwide economic development. She says Amazon has created more than 95,000 full- and part-time jobs across Texas.

“Access to talent continues to be the No. 1 factor we consider when looking at where to invest. Our investments at our Austin, Houston, and Dallas tech hubs in Texas provide more space for us to create good jobs and offer a business-friendly community with great amenities, a high quality of life, and a fantastic talent pool,” she says.

HPE’s decision to designate its Spring, Texas, campus as its global headquarters grew from its presence of more than two decades in the Houston area, says Adam R. Bauer, the company’s director of issues management and policy communications.

“We’ve long known that Houston is a great place to do business for a variety of reasons: the strong university ecosystem and talent pipeline, the infrastructure, and the overall business climate,” he says. “That’s why, as we evaluated our business needs and opportunities for cost savings over the long term, it made sense to us to move our global headquarters to the Houston area while maintaining a robust innovation hub in the Bay Area (in California).”

A move to give employees more choices in the workplace — such as telework, which became more common during the worst of the COVID-19 pandemic — came into play for some companies.

HPE, for example, offered relocation to Texas as an option for several hundred headquarters staff members, but staffers had the choice of staying in California, Bauer says.

Growth and Its Challenges

Texas’ ability to attract business is helping fuel its overall population increase as the state heads toward the 30 million mark.

The U.S. Census Bureau’s population estimates show the state at 29.5 million in 2021, with 310,288 people added between July 1, 2020, and July 1, 2021. Net migration was 63.6 percent of that increase, notes the Texas Demographic Center.

“Texas is a low-tax, business-friendly state, which is a big draw for businesses and employers. In addition, housing costs in Texas are also lower when compared to other states, although that is beginning to change. Therefore, if the Texas economy continues to grow, then we will likely continue to experience increases in our net domestic migration,” says State Demographer Lloyd B. Potter.

Challenges, as well as opportunities, come with growth, and Texas has worked to meet the moment with targeted investments. The Texas Legislature has put more money into public education and in 2021 created the Broadband Development Office (BDO), placing it within the Comptroller’s office.

Comptroller Glenn Hegar met with Texans around the state to get their input on the effort to make always-on, high-speed internet more widely available.

And decisions by large employers to place chip-manufacturing facilities in Texas are in tandem with a focus by leaders, including Hegar, on enhancing and protecting pandemic-battered supply chains such as those providing chips that are essential to products from computers to cars.

“Texas welcomes business investment because we know that working together, we can help forge an even stronger economy that benefits all Texans through jobs, technological advancements, and innovations that improve lives,” says Hegar. “Texas’ influence also reaches beyond the state; when we work with businesses that are creating important products and strengthening our supply chains, the whole country benefits.” FN

Source: Texas Comptrollers Office. Details on the Broadband Development Office and the Comptroller’s broadband listening tour of Texas communities can be found on the agency’s BDO page.