CEO Message: Did the Storm Make Central Texas Less Competitive for Economic Development?
The “February Storm of 2021” will be long remembered by all who experienced it. Many are still experiencing it now. From burst pipes, to empty pantry shelves, to downed tree limbs, and worse – Texas is in the process of emerging back into operation even now. The pain and fear of that week was real, and many families are still in the early stages of recovery.
Almost as soon as the sun came out and the snow melted, I began to receive inquiries from community members about what this all means for our economic future. People have been asking if businesses that considered Central Texas a possible future home might now hesitate to come here. Will companies here now consider leaving? Will other states compete more for new business investments in the future? Is Texas now less competitive for economic growth than we were before the storm? These are all reasonable questions.
In my view, no, Texas is not at risk of losing our competitive edge. Clearly, this storm was highly damaging and will create untold expense for families, businesses, and utility providers. But I do not anticipate this event will become the “beginning of the end for the Texas miracle”.
I have three reasons why I believe this event will not hinder our future prospects, and one respectful word of caution for policy makers and influencers.
- The things that made Texas so competitive are still present. Texas is still recognized as having a very supportive policy and tax climate for business success. Our state, and the Central Texas area specifically, is still one of the largest, highest-skilled, technologically advanced areas in the world. We still have some of the strongest education systems in the country. Companies that have invested millions in facilities and workforce in the state are unlikely to uproot and move due to one weather event (see reason number three below). The storm and resulting utility outages still haven’t changed any of this.
- Businesses evaluate hundreds of factors when making location decisions. Whenever our office is contacted by an industry looking to put down roots in Round Rock, we know they’ve already done research on this market, local workforce, regulatory issues, transportation networks, and any number of additional factors. Any comprehensive business investment search always includes an assessment of acts of nature. Think of the long-lasting economic strength of California despite being on one of the most active fault lines in the world. Yet, earthquakes didn’t stop California’s growth. Destructive hurricanes have not stopped coastal cities from rebuilding, floods have not reduced riverside cities to ghost towns, and business expansion still continues in tornado alley. Business leaders include these considerations in their decision process, but it is one consideration of many. This storm will become part of the decision matrix, not the determining factor.
- This was an outlier event. Everyone in Texas can tell you that storms like this don’t happen every year or even every decade. Even in areas where ice and snow events like this are more common, they almost never happen over an area encompassing the entire State of Texas. All time snowfall records were set or nearly broken throughout the state. Thankfully, this is exceedingly rare and businesses understand that. As costly as the disruption has been, business leaders understand that huge ice and snow events just don’t happen that frequently in this area. Company location decisions don’t rest exclusively only on one storm that might happen every ten, twenty, or fifty years.
One respectful word of caution for policy makers and influencers: our response to the storm will mean everything to businesses considering locating here.
In many ways, how we respond now will influence how we are viewed more than the storm itself. Most business leaders are pragmatic problem solvers. We’ve seen time and time again, when a business failure occurs, the source of the failure is identified, a plan is developed to address those issues, and resources are allocated to fix it and move forward.
If Texas is seen to take this pragmatic, clear-eyed approach to ensuring robust, redundant basic utilities don’t fail in another outlier winter storm, they will not hesitate to invest here. Conversely, a poor response could cause business to not invest in Central Texas. If we do not candidly assess how systematic failures happened and then make reasonable investments to prevent future failures, that will be viewed as a weakness in the eyes of company heads.
The three reasons above can be superseded if our response as a state is reduced to infighting and blame placing. Business leaders really don’t have patience or the time for it within their organizations, and it would create great risk for our economy to engage in it now.
We have so much to look forward to in Round Rock and Central Texas. Let’s figure out what the issue is and get it addressed. Find it, fix it, and get back to work.
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