Statewide Incentives for Advanced Manufacturing

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Since the advent of Ford’s first assembly line in 1913 (and arguably even earlier than that with the textile and millwork plants of the Industrial Revolution), the manufacturing industry has been dominant in the American workforce.  The addition of technology through the years has been a threat to this, threatening jobs and creating a fear for the future of workers in the industry. However, new technology has also created new needs, and thus the manufacturing industry is coming back to life. Texas itself is booming with business opportunities for advanced manufacturers, becoming a hub for this new industry growth. According to 24/7 Wall St. via Dallas Fed, Texas ranks first as an exporter of manufactured goods, and has accounted for about 9.5% of the total U.S. manufacturing output. The manufacturing industry is thriving in Texas and only continues to grow, and for good reason. As a state, Texas offers some of the strongest incentives and resources for Advanced Manufacturers.

The Ability to Live Where You Love and Love Where You Work

For many people, the choice of where to live is largely dependent on where the work is. This creates a challenge for many, as the two don’t always align well. Oftentimes, cost of living or lack of available jobs is a huge barrier to people looking for the balance of having a place to call home and a place to support themselves. Whereas other industrial cities are separated from the things that families value: strong educational systems, culture, and entertainment, major metro areas in Texas offer it all.

Texas culture is one of a kind. A hub of big cities and small towns, lots of open space, and a variety of terrains - there’s something for everyone. Each Texas city has it’s own unique draw, and metros such as Dallas and Houston offer the vibrancy of a big city, but are surrounded by  smaller towns that offer a simpler suburban life. There are 7 Texas suburbs that made Business Insider’s 2016 List of cities with the best quality of life, and Texas’ 6 largest cities have a cost of living below the national average. Add no state income tax and housing that’s 15.5% less expensive than the average per CNBC, it becomes clear why Texas is a favorite for laborers sought out by advanced manufacturing companies.

Salary also comes into play here. For example, someone making $65,000 in Manhattan, New York would be able to live the equivalent lifestyle in Dallas for $27,750, meaning money goes much further. In Dallas, as compared to New York, groceries cost 18% less, housing is 83% less, utilities are 23% less, transportation is 22% less, and the cost of health care is lower by 12% (According to CNN Money). This, in conjunction with a highly educated workforce, offers a strong draw for advanced manufacturers seeking a specialized workforce without breaking the bank. Texas is home to some of the top universities in the country. Which means there are a lot of highly educated, career-seeking individuals with a wide variety of education and skills. Texas is also home to a number of smaller specialized vocational schools such as Texas State Technical College, which specializes in a number of state of the art manufacturing programs to help prepare students for the future of the industry.

Wide Open Spaces, Wider Incentives

Everyone knows the old adage, “everything’s bigger in Texas.” This is especially applicable to the land. Texas has an abundance of open space for businesses to build on with plenty of room for expansion. According to USA Today, “as of 2011, Texas occupies approximately seven percent of the United States' water and land area.” Several major advanced technology/manufacturing companies have already made the move to Texas such as Maxim Integrated, Novati, STMicroelectronics, EXFO, Samsung, Toyota, and GM.

Perhaps most telling of the benefits of the manufacturing field shifting residence to Texas is that  according to Emsi, “there are over 300,000 new jobs in advanced manufacturing since 2011 (6% growth), which accounts for nearly half of all new manufacturing jobs (618,000 new jobs since 2011, growing at roughly 5%).” The industry has already seen an increase in jobs in this field, and it is continuing to grow. According to the Dallas Fed, “the production index, a key measure of state manufacturing conditions, moved up eight points to 23.3, reaching its highest level since April 2014.”

Another strong reason for the movement of these businesses is the incentives, both direct and indirect. Dallas is currently ranked 10th on Forbes Best Places for Business and Careers, followed closely by Austin at 11th. The cost of doing business in Texas is a large reason for this. According to the NY Times, Texas business incentives are the highest in the nation as “Texas gives out more of the incentives than any other state, around $19 billion a year”. Coupled with the lower cost of living for employees, it makes sense that businesses feel the financial boon of moving to Texas.

Finally, an abundance of local resources and easy access to raw materials make Texas great for those in manufacturing. Alternative energy sources such as wind power, cheap natural gas, and access to raw materials (e.g. limestone and gypsum) decreases the costs of these resources to Texas businesses, while an expansive transportation system makes it easy to bring in any additional manufacturing materials.

As the rust belt continues to deplete and the manufacturing industry continues to transform, it is important that those seeking to capitalize on the advanced manufacturing space do so with care. Advanced manufacturing is a budding, specialized industry that requires the right combination of factors (e.g. a skilled workforce, proper resources, etc.) to be successful. For many, finding a place that meets their specialized needs may seem challenging, but Texas should be on the top of the list.

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