Texas is the second largest state in the United States by population, land area, and economy. In the 1800s, the economy of Texas was dominated by the cattle, cotton, lumber, and oil industries. Today, with a gross state product of over $1.8 trillion, the Texan economy is larger than that of South Korea and Canada. While the energy industry makes up a large portion of the Texas GSP, other top industries today include agriculture, aeronautics, defense, and technology.
Oil and Energy
Four out of the five largest companies based in Texas are in the oil and energy industry. These companies are Exxonmobil, ConocoPhillips, Valero Energy, and Marathon Oil. Texas has massive petroleum deposits which account for one third of the entire known supply in the United States. As a result of the rich oil supply and massive oil companies that call Texas home, Houston is considered to be the energy capital of the world. This industry skyrocketed after the discovery of the Spindletop Oilfield in 1901. This was the beginning of what became known as the Texas oil boom, which is also known as the gusher age. The Spindletop Oilfield discovery was followed by the discovery of other massive petroleum reserves. These discoveries paced the way for the United States to surpass Russia as the top producer of petroleum in the world. Prior to the gusher age, Texas was mostly rural and it did not have large cities. The oil boom generated an unprecedented amount of jobs, which sprouted large cities. For example, Houston went from being a small commercial center to being one of the largest cities in the United States in just 4 decades.
Overall, the energy industry contributes over $170 billion per year to the economy in Texas. While the energy sector is dominated by oil, Texas has been investing heavily into alternative sources of energy. Texas generates more energy from wind than any other state, and has also invested heavily into solar power.
Texas has a long history of success in agriculture and currently leads the country in cotton and cattle production. Today, one in every seven working Texans has a job related to the agriculture industry. That being said, it is no surprise that Texas has the most farms in the United States in terms of quantity and size with a quarter million farms covering over 125 million acres. The jobs within agriculture are vast and diverse. While the agriculture industry employs plenty of farmers and agronomists, it also employs business operations roles such as accountants, managers, and salesmen. While agriculture is one of the oldest industries in Texas, it shows no signs of slowing down as it continues to employ a large percentage of Texas jobs in agriculture.
Texas is home to the Lyndon B. Johnson Space Center which serves as the center of NASA. This has made Texas a great hub for companies related to aerospace and aviation. The aerospace and aviation industry employs more than 130,000 people in the state of Texas. These jobs are very well compensated, with an average annual salary of $95,414. Texas is also home to a lot of private companies in the aerospace and aviation industry. These companies include American Airlines, Southwest Airlines, and the aviation division of Lockheed Martin. Furthermore, Boeing, Lockheed Martin, L-3 and Bell Helicopters all have manufacturing facilities in Texas for aerospace products. All of these companies and organizations in the aerospace and aviation industry attract a highly skilled and educated workforce of engineers and technicians to the state of Texas.
Texas is home to many of the United State’s Air Force, Army, and Navy bases. Military installments in Texas directly employ over 200,000 people and are responsible for over $80 billion of gross state product. The largest military base is Fort Hood, directly employing over 60,000 people and contributing $20 billion to the gross state product. The impact of military bases is essential to the local economies in Texas. The large military presence in Texas attracts many major defense contractors including Boeing, Lockheed Martin, BAE Systems, Vought Corporation, and many more.
Texas is a massive hub for computer technology in the United States. Major computer component manufacturers like Dell and Compaq started in Texas. It is also the home to many large information technology companies such as Texas Instruments, Perot System, and AT&T. Several large software companies including Google, Facebook, and EA Games have large offices in the Austin area, which is also home to a lot of smaller, yet highly successful, startups. As a result of these massive employers, Texas ranks second in the country for employment in the computer and video game space.
All in all, Texas has a very impressive economy that shows absolutely no signs of slowing any time soon. While a lot of the economic success in Texas is centered around petroleum, it has invested and diversified into many other industries and sources of revenue. Today, Texas is a lot different than what it was 150 years ago. The rural land that mainly consisted of cattle, cotton, and lumber, now has massive cities driven by cutting edge technology and computers. While the largest employers in Texas are still oil companies, it is also the home of many household names such as Dell, Sysco, 7-Eleven, AT&T, and Pizza Hut. In fact, 51 of the companies in the Fortune 500 are in Texas. These massive companies provide employment for millions of Texans in a large variety of industries and specializations.