Reshoring to Texas
Data on Texas's Advantages
Ideas for an even stronger Texas
#1 State for Exports for 23 Years
#1 State for Solar and Wind
10% of U.S. Manufacturing in Texas
Companies are reshoring operations to the United States and to Texas at high rates. This web content is built for:
Companies considering Texas for location and expansion,
Local economic development leaders looking to utilize data and arguments to attract reshoring companies, and
State and local policy leaders looking for ideas to ensure Texas can become more competitive in developing and attracting crucial industry.
Our Approach
We received a grant from the US Economic Development Administration to assess Texas' economic competitiveness and vulnerability to supply chain disruptions. We collaborated with TIP Strategies, Inc., and a statewide steering committee (LINK) to conduct stakeholder engagement and data analysis. The resulting Texas Competitiveness and Resiliency Strategy offers:
Practical data to make the case for your region of Texas.
Recommendations to enhance the state's competitiveness and support growth in innovative industries, focusing on Texas’ talent development, infrastructure, toolkit establishment, and sector-specific actions.
Texas Strengths
Why relocate operations to Texas? Texas has the 9th largest economy in the world, 30 million Texans, a rapid population growth rate and extensive connectivity with Mexico.
Talent
Strengthen the talent pipeline for Texas employers
Fortifying the talent pipeline for Texas employers is the focus of the first goal. Stakeholders emphasized the critical need for finding and retaining skilled workers, which has become an even more pressing concern in recent times. To meet the current and future demand for a skilled workforce, it is imperative to deepen and expand talent development programs through coordinated efforts and additional resources at the state and local levels. The 88th Legislature created the $3 billion Texas University Fund and realigned community college funding around outcomes and workforce alignment. The recommended strategies and actions encompass various areas, such as aligning workforce plans with Texas competitiveness priorities, improving educational outcomes, expanding dual credit and technical education programs, and supporting entrepreneurship education.
Infrastructure
Build a world-class infrastructure for today and future generations.
Rapid economic growth and population expansion have strained the state’s transportation networks, airports, seaports, rail systems, water systems, electric grid, and telecommunications infrastructure. Ensuring that Texas has infrastructure capable of meeting the demands of a 21st-century economy by addressing these vulnerabilities and preparing for the future economy is the subject of the second goal. The strategies and actions proposed include advocating for increased capacity at border ports of entry, enhancing transportation infrastructure funding, improving utility and telecommunications infrastructure, and supporting energy resiliency and water infrastructure initiatives. Infrastructure investments appropriated by the 88th Legislature included $1.5 billion for rural broadband, $1 billion for a Texas Water Fund, $5 billion for surface transportation, $400 million for Texas ports, and $5 billion for electric generation funding.
Regulatory & Incentive Tools
Ensure Texas remains the best location in the world to invest and create jobs.
The significance of Texas' pro-growth, business-friendly regulatory environment and competitive tax incentives in driving economic success is highlighted in the third goal. To maintain and enhance the state's advantages in these areas, it is crucial to revamp tax limitation agreement policies for large capital investments, replenish the Enterprise Fund to attract strategic corporate headquarters, maintain competitive R&D tax credits, and continue tax limitation agreement capabilities at the local level. The 88th Legislature passed important legislation to protect and enhance Texas’ business climate. This includes authorizing a new statewide incentive limiting taxable value of certain property (House Bill 5) and passing the Texas Regulatory Consistency Act.
Local Economic Development Tools
Support local and regional efforts to make supply chains more resilient.
The fourth goal outlines a set of strategies designed to assist EDOs in supporting businesses to become more resilient in the face of supply chain disruptions. The strategies include the following:
Utilizing business retention and expansion (BRE) efforts to gather information on supply chain issues, suppliers, customers, and potential gaps;
Collaborating with local manufacturers to map the existing supply chain ecosystem;
Engaging in targeted recruitment and retention efforts to fill supply chain gaps and diversify the base of suppliers and customers;
Partnering with industry, government, workforce entities, and education to develop strategies for attracting, retaining, and developing the state's workforce; and
Working with universities, community colleges, manufacturers, and entrepreneurship organizations to promote supply chain innovation and technological advancements for resilience.
Sector-Specific Strategies
Semiconductors/Microelectronics
Semiconductors and microelectronics play a critical role in advanced technologies, and the US currently leads in chip design and patents. The bipartisan passage of the federal Creating Helpful Incentives to Produce Semiconductors and Science Act of 2022 (CHIPS & Science Act) demonstrates the industry's importance. The act directs significant investments toward enhancing US competitiveness, innovation, and national security.
To capitalize on this investment, the 88th Legislature allocated state funding:
$698 million for Texas Semiconductor Innovation Consortium to develop and attract a national semiconductor research consortium and create a state plan for further enhancement of the industry;
$440 million for the Texas Institute for Electronics at the University of Texas; and
$200 million for the Quantum & Artificial Intelligence Chips Fabrication and $25 million for the Center for Microdevices and Systems at the Texas A&M University at College Station
Going forward, Texas should explore the following:
How to ensure Texas wins a significant share of federal research investments in advanced packaging and the National Semiconductor Technology consortium in 2024.
Create technology mapping in semiconductor design and fabrication, in addition to the TSIC state strategy.
Update current analyses of Texas' research excellence across this tech map and how to augment research and development capabilities.
Explore partnerships with Mexico and Central America on less advanced components of workforce development, testing and packaging processes.
Explore how to grow credentialed engineering talent, American master degree and PhD net completion in aligned fields of study to deepen the Texas talent pool.
Form a recruiting effort to promote semiconductor and advanced manufacturing as an industry and a training ladder for semiconductor technician workforce training programs in key areas of the state.
Batteries/Energy Storage
In the realm of batteries and energy storage, the global lithium battery market is projected to experience significant growth; unfortunately, the US lags China in its manufacturing and supply chain capabilities. Texas has the potential to become a more prominent center for battery R&D and production, given its historical significance in lithium-ion battery development and Tesla's presence. UT-Austin has been a recent power in sodium-based batteries. But in 2023:
In Q1 2023, Texas A&M-College Station announced research breakthroughs to increase storage capacity for water-based batteries by 1000%.
In Q2 2023, battery companies were rapidly exploring investments to increase Texas’ energy storage capacity, to include in places like Hunt Co, where Spanish-headquartered Acciona SA announced an additional investment in lithium battery storage.
Late Q3 2023, the U.S. Department of Defense invested $30 million into UT-Dallas to accelerate their research and workforce development capabilities, with potentially more on the horizon.
Texas should study how to invest in state-led research to position Texas-based companies for technological dominance, plus whether it needs to refine economic development initiatives, incentives, and collaborations to attract battery manufacturing investments.
In addition to ensuring implementation of JETI, the state’s large capital investment fund set to come on line January 1, 2024, this might also include exploring how to attract and develop a national research laboratory in partnership with the U.S. Department of Energy and creating the technology map for the industry. Additionally, Texas green-lit $10 billion in investment ($7 billion through a state constitutionally protected endowment fund) to provide below-market loans to the development of additional natural gas energy production.
Energy
Texas remains the nation’s leading energy producer, both in oil and gas as well as renewable energy, particularly wind and solar. Texas produces 26% of wind energy in the United States in 2021. Some key 2023 developments:
The 88th Legislature funded a $10 billion below-market loan program for generators to build dispatchable power plants in the state, $7 billion of which was approved overwhelmingly as a constitutionally protected fund by Texas voters in November 2023.
The U.S. Department of Energy also made a major announcement in Q4 2023 that Texas would be selected for a major $1.2 billion investment into further development as a regional U.S. hydrogen hub.
To maintain its energy leadership, Texas should continue to invest in next generation energy technologies, take steps to maintain its a favorable regulatory environment, effectively implement the JETI large capital investment tax limitation program scheduled to launch on January 1, 2024 and finetune financial incentives to attract new energy investments and jobs. This should include exploring the opportunity for Texas for advanced nuclear energy reactors and capabilities, as being studied by the Public Utility Commission working groups – led by Commissioner Jimmy Glotfelty – under the request of Governor Greg Abbott.
Biotechnology
Texas has established itself as a leader in medical R&D, with renowned research universities, a robust biotech industry and the largest medical complex in the world. Some 2023 developments:
Texas Legislature provided substantial new funds to accelerate Texas graduate medical education;
Texas Legislature established the Texas Space Institute which has the opportunity to do substantial new space-based medical research, potentially in the forthcoming A&M institute to be located near the NASA Johnson Space Center
In September 2023, Texas was announced as one of the hubs for the Advanced Research Projects in Health .
To further strengthen its position, Texas aims to enhance its ability to translate research into high-growth enterprises. Key strategies include establishing a biotechnology cluster initiative, mapping supply chains for pharmaceutical and medical device manufacturing, and supporting the efforts of the Cancer Prevention and Research Institute of Texas
(CPRIT) in implementing the Texas Cancer Plan.
Commercial Space Technologies
Texas is the leading state in the nation for aerospace, with 18 of the top 20 aerospace companies with operations in Texas and traditional excellence at the UT-Austin Center for Space Research.
With a growing presence in the commercial space sector, Texas aims to cement its position as the epicenter of space exploration.
Key space companies have been establishing and growing operations in Texas, to include SpaceX, Blue Origin, Firefly and many others.
The Artemis space mission to Mars is being operated out of the NASA Johnson Space Center
UTEP has been rapidly expanding its space capabilities, to include the a program to weld in space, creation of the UTEP Space Center and the creation of the new digital engineering faculty program in El Paso.
The 88th Texas Legislature invested $150 million to create the Texas Space Commission and the Texas Aerospace Research and Space Economy Consortium, with a charge to create a state strategy for increasing Texas’ prominence.
Hypersonics development and testing is being created at Texas A&M RELLIS, Midland Spaceport and other locations in Texas.
The 88th Texas Legislature appropriated $200 million to Texas A&M to create a facility outside the NASA Johnson Space Center to model lunar surfaces and become a proving ground for experiments, rapid testing, technology transfer and commercialization. The A&M Board of Regents approved this in August 2023.
Recommended strategies involve implementing an effective Texas Space Commission, mapping key space technologies to research capabilities, creating a state strategic plan to develop the space related industry within the state of Texas, keeping the close connection with the Office of the Governor to effectively attract and develop key suppliers in the space industry, and ensuring adequate investment and mission support in NASA Johnson Space Center.
FutureG
FutureG wireless technology, which builds on 5G capabilities, is identified as a critical area for maintaining national security and economic competitiveness. Texas plays a prominent role in the development and deployment of 5G and FutureG technologies, with AT&T calling Texas home and with our North Dallas, Texas history as the “Telecomm Corridor.” Nokia and Ericcson both have open radio access network research and manufacturing operations in that region.
Key actions
Texas A&M RELLIS campus is creating a proving ground for AI-enabled edge communication technologies and next generation network designs.
The 88th Legislature appropriated – and voters approved in November 2023 -- $1.5 billion in Texas taxpayer dollars to create an endowment for rural broadband infrastructure development.
In December 2023, AT&T announced a relationship up to $15 billion with Ericcson (who has manufacturing operations in Lewisville) to run 70% of its traffic through open radio access networks (oRAN).
Also in December 2023, Frisco, Texas is hosting the oRAN global conference.
Recommendations include mapping critical supply chains, exploring permitting changes to accelerate deployment of 5G in Texas’ municipalities, and expanding Texas-funded research clusters and educational programs.
Cybersecurity
Vital for national security, cybersecurity employs a significant number of Texans and contributes substantially to the state's economy. Texas should ensure it remains a center of cybersecurity technology development and workforce training. Strategies include encouraging the use of the statewide cybersecurity framework, ensuring a strong talent pipeline, and supporting the Texas Cybersecurity Council.
Implementation
The Texas Competitiveness and Resilience Strategy offers an ambitious and comprehensive framework for strengthening Texas’ position as a global economic power and fostering the technologies of the future. Successfully implementing these recommendations will require a broad-based effort involving many stakeholders from the public, private, and nonprofit sectors. Coordination and alignment will be key. The 88th Legislature and the Office of the Texas Governor (Governor’s Office) have already committed significant long term investments in several critical areas. Ensuring these investments are coordinated toward a common vision is imperative.
Therefore, this strategy proposes that a Texas Council on Competitiveness be established to provide recommendations to the Governor’s Office and the Texas Legislature on the strategic alignment of existing and future state economic development investments. The leadership of this new entity should include and be largely comprised of representatives of the private sector and state and local economic development organizations. The TABCCF can play a key role in helping to organize the council and connecting it with the state’s elected leadership.
Texas Industry Dashboard
