AT&T, Hewlett Packard, Tesla and Oracle. These are just some of the companies who have planted their flag in Texas as the new company headquarters. While this development might seem sudden, it has been a transition that’s years in the making only to be accelerated towards a tipping point by COVID and the recent economic climate that’s sweeping the globe. Recently, business news has been dominated by this great ‘exodus’ of the tech industry from states like California and many of them are choosing to instead be in Texas.
Not long after its founding, IdeasUnlimited was quick to relocate to Texas given the large advantages it offered and we wanted to take this time to share some of the benefits we discovered. In this blog, we’ll be discussing why Texas is on the trajectory to being the next tech center of the United States and why it is a great choice if you’re thinking of starting or shifting your company.
Cost of Space
Companies have been on a leasing frenzy in Paula Alto, reserving office space and capturing the housing market. This has triggered a state-wide rise in cost of living and, more relevantly, cost of having an office in California. Many entrepreneurs and company founders are growing frustrated over the rising cost coupled with the aggressive tax structure and labor laws that are making it harder and harder for them to make ends meet in a state that’s meant to be an innovation hub. This has been the primary driver of some of the larger companies to relocate and find more profitable areas in the US.
Meanwhile, Texas has some of the most business friendly policies in the US with subsidies and tax breaks across a wide range of industries. When compared to California, Texas offers a much more enticing place to create a greatly profitable business. Furthermore, Texas also has a lower housing and utility cost (nearly half of California). For aspiring entrepreneurs who wish to be financially comfortable, Texas is just a much better option to set up shop. While other states such as California will always be home to the first generation tech giants like Intel, Microsoft and Apple, Texas is becoming the staging area for the tech giants of the future.
The Startup Boom
As we mentioned in the introduction, many large companies have moved to Texas and more are showing interest in following suit. This has triggered a heightened interest similar to the Silicon Valley “Gold Rush” that brought many companies and startups to the state. Now, Texas is experiencing its own influx of business which investors and industry influencers are keenly aware of. Many startups are taking advantage of this trend and are able to capitalize on the growing popularity of Texas.
Establishing a business in Texas now means getting a headstart in what could potentially be a huge market that rivals some of the other states. Some of the larger companies are already pouring capital into Texas and investing in small businesses. For example, Verizon increased spending in Texas adding another $97 million dollars to nurture the state’s markets with new products, services and partnerships. It would be wise for up and comers to participate in this growth while the competition is just starting.
There are many other hidden factors that make Texas a prime real estate for businesses all over the US. Take the workforce for example. Due to high living costs in states like New York and California, many fresh graduates and young adults tend to relocate somewhere more affordable. And with one of the lowest costs of living, Texas (particularly Austin) is proving to be the location of choice for young workers. Other than that, labor friendly laws and pro-union regulations have also encouraged many workers to seek employment in the state of Texas. The abundance of high caliber fresh graduates makes Texas a hub for new companies looking for capable employees to join their nascent companies.
Whether you are looking to start a new company or finding the ideal spot to re-establish an existing one, Texas is a great choice for those looking for a place that offers exciting new opportunities in their field. IdeasUnlimited has been monitoring this change and has served many organizations who are looking to create a foothold in Texas. Through our support services, we have helped hundreds of clients find new opportunities and unlock their full potential. Our team is always ready to advise new clients. To reach us, feel free to send us a message by heading over to our contact page or simply leave a comment below.