The Economist a London based, English language weekly publication that describes itself as the premier online source for the analysis of world business and current affairs, as well as business and country special reports, recently published a Special Report on Texas called, Lone Star Rising.
Why would a British publication put together a 10 page report on Texas, when they’ve got future special reports planned for The Arab world on July 25th, Indonesia on September 12th and China and America on October 24th?
Well they must think we’re doing something right. Here’s what they say.
Texas now hosts more Fortune 500 companies than any other American state. They include AT&T, Dell and Texas Instruments; oil giants such as Exxon Mobil, ConocoPhillips and Valero; American, Continental and Southwest Airlines; Fluor, a huge construction firm (recently lured from California); J.C. Penney; Halliburton; and 52 others. Texas claims to have been responsible for 70% of all the net new jobs created last year in America’s 50 states, though since only a few states created any jobs at all that is not quite as astonishing as it sounds.
Texas’s unemployment rate, at 7.1%, was 2.3 points below the American average. Housing repossessions are still very rare; the state budget is still in surplus even as California and New York teeter on the edge of bankruptcy. Unlike those fellow states with large populations, Texas levies no personal income tax, and with almost unlimited space on which to build, its houses are big and affordable.
All this has brought people flooding in and made Texas America’s fastest-growing state. Net domestic inflows have been running at around 150,000 people in recent years, whereas California and New York have seen net outflows. Next year’s national census is expected to show that flourishing Houston has replaced struggling Chicago as America’s third city. Of the ten largest cities in America, three are in Texas.
Those three, Houston, Dallas and San Antonio, together with the state capital, Austin, and Fort Worth, make up what the boosters call the Texaplex: a densely packed triangle, with each side measuring about 300 miles, that is home to roughly 80% of the state’s population of 24m (second only to California’s 37m). This “Texas triangle”, containing America’s third-largest airport (Dallas-Fort Worth) and its second-busiest port (Houston, despite being 50 miles inland), has emerged as one of the most dynamic regions in all of America.
Specifically with respect to Austin, the Report says…
Austin, as well as housing the machinery of state government, has developed into a thriving hightech cluster.
The University of Texas at Austin, one of America’s largest single campuses, has helped that city become a leading hightech centre. Dell, one of America’s 40 biggest companies, started life at the university in 1984, and smart industrial policy brought Sematech, a consortium involving the government as well as 14 big chip firms, to Austin in 1988. Scores of other tech firms have followed.
Second, Texas has benefitted from transplants. Cheap property and low taxes have attracted corporate headquarters and startups alike. At a roundtable organised for The Economist in Austin by Angelou Economics, a consultancy that specialises in matching new economy businesses with cities that want them, only two of the 12 entrepreneurs taking part were native Texans. Most of them cited noneconomic as well as commercial reasons for being in Austin. Quality of place is a phrase you hear a lot in Texas.
A big part of Austin’s draw is its music, and particularly its SXSW festival. Austin is a remarkably laidback place, with all the advantages of being a blue city in a red state.
In closing this probably best sums up the impression that the Lone Star state made on the writers of The Economist.
To visit America in the midst of the worst recession for decades can be a disheartening experience, but a tour of Texas is quite the reverse. Since suffering that big shock in the 1980s, it has become a well diversified, fiscally sensible state; one where the great racial realignment that will affect all of America is already far advanced; and one whose politics is gradually finding the centre. It welcomes and assimilates all new arrivals. No wonder so many people are making a beeline for it.