What if a state decided to flex its economic muscle so hard that it made entire countries blush? Welcome to Texas in 2025, where Governor Greg Abbott and the Texas Economic Development & Tourism Office (EDT) just dropped a 150+ page love letter to ambition titled Bigger. Better. Texas. — a five-year strategic Texas economic development plan that’s less a humble roadmap and more a chest-thumping declaration: “We’re the eighth-largest economy globally, and we’re not slowing down.” For entrepreneurs, venture capitalists, and economic development pros, this isn’t just a policy doc — it’s a masterclass in how to build a playground for innovation that others should shamelessly copy. Let’s dissect this beast, sprinkle in some sarcasm so we’re entertained while talking economics and figure out why Texas is basically the startup founder of states — bold, brash, and betting big.

Picture this: Texas as a swaggering cowboy strutting onto the world stage, tipping its hat to nations like Canada and South Korea while muttering, “Nice GDP, but mine’s bigger.” The plan, spanning 2025-2029, is a comprehensive flex of Texas’ economic biceps, underpinned by four pillars—Business and Industry, Innovation and Entrepreneurship, Workforce, and Infrastructure. It’s got regional profiles breaking down the state’s 10 economic zones, from the innovation-heavy Metroplex to the oil-soaked West Texas plains, and sector profiles targeting everything from semiconductors to biotech. This isn’t some dusty government pamphlet; it’s a data-driven, stakeholder-informed playbook that says, “We’ve got the goods — now watch us scale.” The former startup CMO in me couldn’t even get my act together to plan for SXSW because I’ve been giddy about seeing governments started getting it.

The summary? Texas is already crushing it—outpacing the U.S. in GDP growth, job creation, and foreign exports (over $240 billion in 2021 alone, up 20.6% since 2015). It’s the top state for business relocations, new business applications (467,000 in 2022), and population growth (hello, 100,000 Californians in 2022). The plan doubles down on this momentum, aiming to cement Texas as a global economic titan by boosting its high-export sectors, fostering innovation hubs, and keeping its workforce young and nimble. Regional profiles—like Central Texas’ tech surge or the Gulf Coast’s logistics might—highlight tailored strengths, while sector profiles zero in on 10 industries (think Advanced Manufacturing, Energy Evolution, and IT/AI) and 23 clusters poised to drive jobs and growth. The EDT, nestled under the Office of the Governor, isn’t just cheerleading here—it’s orchestrating a statewide collab-fest with businesses, educators, and local leaders.

bit of a sidebar: note two things already pertinent to successfully developing a startup ecosystem that works. firstly, the regional (not city-specific) distinctions of the state; focus on specific cities does not work and doing so hinders/handicaps both innovation and entrepreneurship because there is more to the region than downtown (and cities tend to compete with one another for attention and resources). secondly, we’ve not used the word “tech” yet but rather we’re seeing attention on genuine sectors of the economy where tech applies. yes, I know politicians, the media, and other economists say “tech industry” – saying it doesn’t make it accurate; the semiconductor industry is nothing like video games. identify your sectors of strength and apply technology therein.

Back to our show, the game plan is to strengthen businesses through targeted support, spark innovation with R&D incentives (like the $3.9 billion Texas University Fund) – which note, is NOT a startup fund, it’s for R&D / prototyping, the deep tech that requires a lot of research (and funding to do so) to uncover innovation that might be worth launching a startup, prep a workforce for tomorrow’s jobs (56% of which are middle-skill), and beef up infrastructure to handle the influx of people and companies. It’s ambitious, practical, and dripping with Texas swagger. But — because there’s always a “but” (with me) — it’s not flawless. Missing pieces? A deeper dive into next-gen tech like quantum computing, a harder push on deregulation, and a louder megaphone for Texas’ unique vibe. More on that later.

Texas vs. the World: A Study in Innovation Domination

Most states and countries treat economic development like a sleepy HOA meeting: lots of talk, little action. What we want and need is akin to the guy who shows up with a PowerPoint, a beer, and a plan to build a rollercoaster in the backyard because innovation requires big, outside the box thinking, not business plans, corporate engagement, and workforce development. We’re going to look here at the Bigger. Better. Texas. as a wake-up call for every innovation-hungry region from Silicon Valley to Singapore through the lens of the fundamentals in the 6 Considerations of the Economic Development of Startups, in turn, yes, being a little critical and highlighting what more Texas needs to do, but assessing as well for what it is, so that you can see the steps to get to where you want to be from where you are.

First as it pertains to those six considerations, a culture of competition, potential, and creativity. Texas oozes this. It’s the state where a chuck wagon (1866) birthed the Wild West, a microchip (1958) sent us to the moon, and today’s entrepreneurs file 467,000 business apps a year. The plan leans hard into this vibe, celebrating a “pioneering spirit” and backing it with R&D tax credits and university grants. Compare that to, say, France — great wine, sure, but its bureaucratic maze strangles startups faster than you can say “croissant.” Texas wins by letting creativity breathe.

Second, reasonable wealth available. With an economy bigger than Russia’s, Texas isn’t hurting for cash. The plan highlights $35 billion in R&D spending (2020) and a GDP that’s the envy of nations. Venture capitalists, take note: this isn’t some broke province begging for crumbs—it’s a cash-rich sandbox where your dollars can multiply. Contrast that with somewhere like Michigan, where rust-belt vibes still linger, and Texas looks like a gold mine.

Third, innovative employers. From Tesla in Austin to ExxonMobil in Houston, Texas is a magnet for big dogs who don’t just hire—they innovate. The plan targets sectors like semiconductors (top U.S. exporter) and biotech, ensuring employers stay cutting-edge. Other states like New York might boast Wall Street, but their innovation’s more about financial gymnastics than building the future, North Texas is rather leading the way in FinTech. Texas has the real deal.

Fourth among the 6 Considerations of the Economic Development of Startups (we’ll get back the plan in more detail shortly), little to no government interference. Here’s where Texas shines — and stumbles. It’s been the “Best State for Business” for 19 years running, thanks to a light regulatory touch. The plan keeps this ethos, focusing on support over meddling. But—and it’s a big but—there’s still red tape that could be slashed. More on that in a sec. Compare this to California, where regs pile up like traffic on the 405, and Texas is a libertarian dream (mostly).

By the way, Texas this year announced sweeping changes and reductions planned to the size of state government with Texas Representative Giovanni Capriglione, that the work in Texas is to eliminate waste, fraud and abuse in government, “We’re going to make long-term changes in how we operate here for the state. This is about, ‘How do we fundamentally change the way the state operates so you can do it in a much more efficient way?’”

Fifth, access to startup-experienced people. Texas’ workforce is young, diverse, and growing—82% of native-born stick around, and migrants flood in. The plan’s workforce pillar aims to skill up this talent for high-demand jobs, like the 1.5 million STEM middle-skill roles projected by 2030. Places like rural Idaho can’t touch this talent pipeline — Texas is basically a startup HR department’s fever dream.

Sixth, credible and distinct promotion. The EDT and Governor’s Office are all-in here, hyping Texas as a global powerhouse with trade deals (Finland, Japan, the UK) and a brand that screams “business-friendly.” But it’s not loud enough—where’s the viral campaign? Compare this to Dubai’s glitzy self-promotion, and Texas could crank the volume.

here’s where I want to take you on another sidebar to draw your attention: a lot of this says “business” and is about business. if we’re serving the entrepreneurs and want to foster innovation, you must distinguish between startups and new businesses because they are unequivocally not the same thing. to focus more on the startup sector, beyond being business friendly, your ecosystem needs people like us involved, directly and directionally. let’s see how we do as we dig deeper into the plan.

The Office of the Governor and EDT set the vision — Strengths? They’re decisive, data-savvy, and tied to real economic wins (12th straight Governor’s Cup for corporate relocations). Weaknesses? They’re still government — likely slow to pivot, prone to politics, and not always as bold as the private sector demands, plus we likely lack the appropriate distinction of startups.

Breaking Down the Texas Plan: The Players, The Strategy, The Impact

1. The Key Players Driving Texas’ Economic Powerhouse

The Texas model is worth a look because it decentralizes economic development — instead of government dictating policy, it empowers regional leaders, industries, and private sector players.

Who’s Involved?

• Texas Economic Development & Tourism Office (EDT) – The state’s economic engine, managing business incentives, global trade missions, and strategic planning.
• Local Economic Development Organizations (EDOs) – Regional leaders driving industry-specific innovation and business attraction efforts.
• Workforce Development Agencies – Texas Workforce Commission (TWC) and higher education institutions ensuring the labor force is ready for future jobs.
• Private Sector & Investment Partners – Tesla, Samsung, ExxonMobil, Waymo, SpaceX, Google, and others fueling Texas’ economic growth.

The plan is built around four key pillars that every government should be structuring their economic strategies around:

1. Business & Industry – Strengthening key sectors, reducing red tape, expanding trade.
2. Innovation & Entrepreneurship (see? yay! NOT “business”) – Becoming the global hub for AI, quantum, biotech, and semiconductors.
3. Workforce Development – Upskilling Texas talent while attracting the world’s best.
4. Infrastructure – Investing in high-speed rail, resilient energy grids, and digital infrastructure.

2. Texas by the Numbers: A Look at the 10 Economic Regions

The Bigger. Better. Texas. plan segments the state into 10 economic regions, each with unique strengths, industries, and strategic growth plans. Here’s how Texas is leveraging its regional diversity to fuel statewide economic dominance.

10 Economic Regions (well, 6 of… and now I’m going to start adding more to dos)

1. Metroplex (Dallas-Fort Worth)

• Strengths: Aerospace, defense, finance, and AI.
• Key Industries: FinTech, logistics, manufacturing, medical devices.
• Growth Opportunity: Establishing DFW as the nation’s leading financial technology hub.
• Missed Opportunity: Remember, regions dominate, so fix the fact that Dallas and Fort Worth need to work together as one.

2. Central Texas (Austin-Waco)

• Strengths: Tech, semiconductors, AI, quantum computing.
• Key Industries: automation, energy tech, and software.
• Growth Opportunity: Expanding the Quantum Corridor—Austin’s push into next-gen computing.
• Missed Opportunity: Establishing better here the Creator Capital of the country and oof… “software” is no more an industry than “tech” – clarify software for what?

3. Gulf Coast (Houston)

• Strengths: Energy (oil, gas, renewables), biotech, space exploration.
• Key Industries: SpaceX, NASA, medical research, manufacturing.
• Growth Opportunity: Cementing Houston as the world’s leading energy transition capital.
• Missed Opportunity: Align it more closely with West Texas as the energy resource capital.

4. South Texas (San Antonio – Rio Grande Valley)

• Strengths: Trade, automotive, oil refining, tourism.
• Key Industries: Supply chain logistics, defense, cross-border trade.
• Growth Opportunity: Texas-Mexico Automotive SuperCluster—a major play for U.S.-Mexico trade dominance.
• Missed Opportunity: Austin and San Antonio are essentially neighbors, reinforce it.

5. West Texas

• Strengths: Oil & gas, renewables, advanced manufacturing.
• Growth Opportunity: Rare earth mining for battery and semiconductor supply chains.

6. Upper Rio Grande (El Paso)

• Strengths: Manufacturing, automotive, cross-border logistics.
• Growth Opportunity: Building Texas as a major semiconductor export hub.

(And four more regional profiles covered in the full report here. This isn’t about explaining the Texas plan, it’s about helping you develop yours)

3. Texas’ Target Industry Sectors: What’s Powering Future Growth?

The Bigger. Better. Texas. plan identifies 23 target industry clusters, grouped into 10 high-growth sectors. These are the industries Texas is doubling down on to ensure its economic leadership for decades to come.

The 10 Target Industry Sectors

? Advanced Manufacturing (Semiconductors, Aerospace, Defense, AI Hardware)
? Energy Evolution (Renewables, Oil & Gas, Nuclear, Battery Storage)
? Information Technology & AI (Quantum Computing, Cybersecurity, Robotics)
? Biotechnology & Life Sciences (Pharmaceuticals, Medical Devices, Research Tech)
? Financial Services & Corporate HQs
? Logistics & Distribution (Ports, Freight Rail, Warehousing, E-commerce)
? Film, Music, & Digital Content
? Food Processing & AgTech
? Tourism, Hospitality & Culture
? Metal & Non-Metal Mining (Critical Minerals for EVs and AI Chips)

welcome back to the sidebar: research tech? unless that quite literally means technology within the field of research, I fear it might mislead a bit. corporate hqs? that’s… not an industry. careful with information technology because people conflate IT with tech and perpetuate that “tech industry” misinformation.

What Texas Could Do More for Innovation

Texas is crushing it, but let’s not pretend it’s perfect. In fact, let me rephrase that, if you want an economy strong in innovation and entrepreneurship you MUST start from a basis that nothing is perfect – it’s neither possible nor attainable. If you go to market with an economic development plan asserting, “this is right, this is what we’re doing” you establish a rigid and authoritative culture the likes of which from entrepreneurs flee. Here’s what I’d love to see more of — because entrepreneurs and VCs don’t settle for “good enough.” These are the gaps where Texas could go from great to galactic, and why they matter.

Entrepreneurs are horrifically leveraged in our economy and in companies.

As defined by personality, not business ownership, are severely underutilized by businesses and governments.

The way our brains are wired, nothing is good enough and everything can be improved upon…

— Paul O'Brien (@seobrien) March 6, 2025

Mobility intertwined with affordability — Think Waymo partnering with Uber for autonomous rides or high-speed rail linking Dallas to Houston. Texas brags about its infrastructure (biggest road network in the U.S., per the plan), but it is in the 20th century. Affordable living draws startups — see my take on affordability — but if people can’t move fast and cheap, that edge dulls because the constraints limited by property pushes prices higher. Rail or robo-taxis could keep costs low and innovation high.

last sidebar, I promise: cities make a horrific mistake when they preach that they’re better for startups because it’s more affordable. but wait, doesn’t that refute what I just wrote? no! you’re missing the point. costly ecosystems have wealth, by design, and that, plus the drive implanted that one needs to raise more capital because the world is expensive, happens more in expensive ecosystems. but that doesn’t mean we can’t make expensive affordable – people have to be able to get to work, conveniently, and mobility is like a pressure release valve on the limited supply of property.

Investment in quantum and future tech — The plan loves “emerging” sectors like AI and biotech, but where’s the bet on quantum computing? We’re not and you’re not where you live, Silicon Second, identify with the future, not the past. Quantum isn’t sci-fi; it’s the next trillion-dollar race. Texas has the R&D chops — $35 billion in 2020 says so — but it’s playing it safe. VCs want moonshots, not just upgrades.

Severe deregulation — Texas pats itself on the back for being business-friendly, but let’s cut deeper. Permitting delays and zoning nonsense still clog the pipes. Slash that, and startups could build faster than a toddler with Legos. California’s overregulation is a cautionary tale — Texas should be the literal opposite; that’s why so much of there is moving here.

Meaningful marketing of distinct strengths — The plan says Texas is unique, but it’s whispering when it should be screaming. A global campaign — “Texas: Where Freedom Meets Fortune” — could lure more foreign capital than a dozen trade deals. Dubai’s skyline sells itself; Texas needs a louder megaphone, and it needs to embrace that by supporting those of us it already on behalf.

Energy beyond oil — Oil and gas are Texas’ past and present, but the “Energy Evolution” sector nods at renewables and electric power. Push harder—think solar farms or next-gen nuclear. It’s not just green cred; it’s future-proofing for VCs who hate one-trick ponies.

Diversify startup stakeholders — The plan loves collaboration, but it’s too cozy with big players. Cities need competing incubators, accelerators, and angel networks — not state-funded monoliths nor city favored programs. An entrepreneur-first economy thrives on variety, not exceptionalism. See my rant on VC opportunity.

Regional specialization — Central Texas with South Texas could be “The Quantum Corridor,” Dallas with Fort Worth (North Texas) is a FinTech hub, Gulf Coast to West is an energy innovation belt. The regional profiles are solid, but they’re not sharp enough because the state is driven by the cities more than economic development zones and respective trade associations – this is not difficult to remedy. Specialization attracts niche VCs like moths to a flame.

Attracting VC, not building it — Don’t expect local VC to step up and invest, value them and create opportunity. What you should actually be expecting of startup wealth (VCs) is that rather than investing, they’re underwriting – if they want the ecosystem to work well on their behalf, there are events, coworking spaces, startup development organizations, and more that need working capital. When we’re teaching entrepreneurs how to build startups, we preach that “you want to build the venture that investors will want to fund and that if you’re having to hit the pavement to get funding, you’re doing it wrong.” Do the same as a region! If you’re having to attract, convince, or sell investors on your startups, you’re doing it wrong. The plan’s focus on jobs and growth is VC catnip, but it needs to spotlight that over trying to seed funds. As I’ve said, VC manifests for opportunity — Texas just needs to wave the flag harder.

Port of entry for foreign business — With Mexico and Taiwan offices, Texas is dipping its toes in global waters. Make it the U.S. gateway — think tax breaks for foreign HQs or a “Texas First” pitch to international founders. which makes a hell of a lot of sense everyone because California and the East Coast are worlds apart whereas the center of the country (say, Texas to Illinois) get you into the heartland with easier access throughout the U.S. The plan’s trade partnerships are a start, but it’s not bold enough.

Copy This, World, and Texas, Let’s Refine Further

Texas isn’t just playing the economic game — it’s rewriting the rules. For innovators, VCs, and startup founders, this plan is a goldmine of opportunity wrapped in a Lone Star swagger. It’s got the pillars, the data, and the ambition to make other regions jealous. Sure, it’s not perfect — where’s the quantum leap or the deregulation chainsaw? — but it’s a damn sight better than the limp plans you’ll find in most statehouses or parliaments.

Oh, and what of the 4 pillars? Let me cover a bit briefly

A business-friendly environment is key, and your plan, as much as this plan must strengthen that by cutting bureaucracy, streamlining regulations, and positioning what you do best as among the best for global trade and investment. In Texas case: AI, energy, defense, and semiconductors as well as quantum, creative, and fintech.

Innovation and entrepreneurship must be the heart of it, with a major push into AI, quantum computing, biotech, and advanced manufacturing, appreciate that entrepreneurship is NOT business ownership and startups are not new businesses – this class of the economy requires a risk tolerant culture, encouragement of creativity and competition, and varied, experienced resources. Texas is not just supporting research but ensuring that breakthroughs make their way through commercialization but what it must also do is enable entrepreneurs to get startups off the ground beyond that. With targeted incentives, venture capital access, and a growing innovation ecosystem, Texas is set to become a global leader in future-defining industries.

A strong economy requires skilled workers, and Texas is preparing its workforce through expanded STEM education, vocational training, and apprenticeship programs. But here’s where everyone, everywhere must do a lot better in education: personalization, critical thinking, the arts, communication, marketing, media literacy, history, civics, and future (not present) tech. The plan also emphasizes attracting top global talent to fill high-demand roles in advanced industries, ensuring the state remains competitive on an international scale.

Rapid economic growth demands world-class infrastructure. Texas’ economic development plan is investing in expanded highways, ports, and freight rail to sustain its booming trade sector while also developing high-speed rail to improve mobility between major metro areas – but there are more. The energy grid is being reinforced to prevent future failures, and broadband and satellite expansion are making digital access more widely available.

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Texas Economic Development Plan

So, what’s the lesson for the world? Build a culture where competition thrives, stack the deck with cash and talent, and let businesses run wild (with a nudge, not a leash). Texas is proof it works — eighth-largest economy doesn’t lie. Entrepreneurs, VCs, and economic dev pros: study this. Steal it. Actually, I take that back, this isn’t IP, it’s visionary, USE it. Then ask yourself — how’s your region stacking up? Because Texas just raised the bar, and it’s not waiting for you to catch up.

Now, ponder this: If Texas can turn oil rigs into innovation hubs, what’s stopping your backyard from doing the same? (just kidding, we haven’t turned an oil rig into an innovation hub, but maybe we should) Share your thoughts — or better yet, your challenges — because building the future isn’t a solo gig. We’re all in this sandbox together.