Texas Border Business
By M. Ray Perry, the Economist
One of the most visible indicators of economic success is Site Selection Magazine’s “Governor’s Cup” competition, and Texas has won for the seventh consecutive year. The Cup goes to the state with the most major corporate location and expansion projects each year. In addition to winning every round since 2012, the Lone Star State has been coming in at or near the top of the list for about 15 years (since the passage and implementation of key incentive legislation).
The only initiatives counted for the Cup involve a capital investment of at least $1 million, 20 or more new jobs, or 20,000 square feet of new construction. In 2018, Texas had 608 qualifying projects, up slightly from last year. Ohio again ranked second with 455 (only three-fourths of the Texas total), then Illinois with 444, Georgia with 300, and it drops off quickly from there.
Major Texas projects range from large new corporate headquarters operations to petrochemical facilities to steel mills to cutting-edge technology firms. While some of the initiatives are an obvious outgrowth of the state’s natural resource base and position on the coast (such as petrochemicals), others are the product of decades of efforts to position Texas to attract and expand emerging industries (such as tech and healthcare).
Another positive outcome this year is that Texas cracked the top 10 in projects per capita. Nebraska led this category for the third year in a row with 118 projects, a large number given the size of the state. Nebraska is seeing results from innovative education programs, low costs for businesses, and other advantages. Ohio tends to show up on both lists, but Texas is less likely, finishing 11th in 2017 and 10th last year. It’s a movement in the right direction, as well as an indicator that there’s still room to improve (as well as the fact that Texas is a very big place).
Texas has the potential to continue to win in the highly competitive market for quality corporate locations and expansions, with a favorable combination of resources and a business-friendly mindset. There are other states with the first but not the second (such as California), as well as those without the resources that companies need.
It is imperative to keep pressing forward, as past success is not necessarily predictive. Investing in infrastructure and education to ensure future competitiveness is essential. Proactively seeking to attract and retain corporate locations (including the judicious use of incentives) is also crucial, as is supporting workforce availability and development and enhanced quality of place.
It’s an impressive feat to capture the Governor’s Cup even once. It’s a Texas-sized accomplishment to bring it home seven times in a row.
_________________________________________________________________
Dr. M. Ray Perryman is President and Chief Executive Officer of The Perryman Group (www.perrymangroup.com). He also serves as Institute Distinguished Professor of Economic Theory and Method at the International Institute for Advanced Studies.
