WHY SMALL BUSINESS ENTREPRENEURSHIP IS THRIVING IN HOUSTON
The “can-do spirit” Houstonians are known for can be traced back to 1836 to the city’s founders, Augustus Chapman Allen and John Kirby Allen. Where others saw only mosquito-filled swamps along the banks of Buffalo Bayou, the brothers saw possibilities, and convinced people to settle here. When describing Houston, Walter Ulrich, president and CEO of the Houston Technology Center has said, “Entrepreneurship is in our DNA.”
For those new to Houston, or doing business outside of Texas, the reasons why small business entrepreneurs continues to thrive here may not be apparent. Let’s take a look at what exactly is making this city such a great place to start a business and, most importantly, continue to be successful.
Houston’s Educated Workforce
Human capital is crucial to entrepreneurship. In the past decade, Houston added an average of 125,000 residents each year; last year, that number hit 156,000. With Houston's population now at over 2 million, population growth is certainly fueling the city's economy. But if a growing population does not include an educated and highly qualified workforce, businesses, especially small businesses, cannot grow.
Fortunately, Houston is home to some of the country’s top colleges and universities, many of which are recognized for their quality of campus life, diverse student population, and entrepreneurial programming. The University of Houston’s entrepreneurial undergraduate programs at its Wolff Center for Entrepreneurship was recently ranked at number two in Princeton Review’s “The Best 380 Colleges” list. Rice University’s Rice Alliance for Technology and Entrepreneurship and its Rice Business Plan Competition, the world’s largest and richest business startup competition, are also leading the way in educating and creating opportunities for young entrepreneurs.
Although last year, 98,000 newcomers arrived in Houston ready or looking for opportunities, students with the skills entrepreneurs need are graduating from Houston’s colleges, universities, and technical schools.
Technology Is Driving The Houston Economy
While the plunge in the price of oil has had a major impact on the oil and gas industry, Houston continues to experience steady economic growth, thanks to the city’s thriving aeronautics, health, and technology industries. Houston’s healthy economy can be attributed, in part, to the growing number of technology-based companies, including startups founded by local entrepreneurs, as well as companies that have relocated to the city.
Collaboration with Houston’s technology startups and entrepreneurs is stimulating innovations in the big energy companies, renewable energy companies, and the Texas Medical Center. Collaboration is also fundamental to the mission of the Technology Collaboration Center of Houston (HCC), a non-profit organization that brings together experts from a variety of different industries, as well as academic and government labs, to address and solve technological challenges.
A decade from now, it’s foreseeable that Houston will surpass Silicon Valley as a hub for innovation in technology. In the meantime, technology will continue to drive the city’s economy, creating an environment conducive to the current and future success of its entrepreneurs.
Houston Is Business-Friendly
Other factors that make Houston so business-friendly include:
Third-lowest cost of living among the nation’s 20 most populous metropolitan areas
No state income tax
Business-friendly regulatory environment, including tort reform, which lowers insurance costs for entrepreneurs
Central location and home to one of the world’s busiest ports
Companies across industries are focused on attracting and retaining educated, highly skilled workers
Special mention should also be made of the diverse ethnic makeup of the city. Demographics data from the City of Houston show Houston’s population to be 26 percent white, 23 percent black, 44 percent Hispanic, 7 percent Asian, and 1 percent other. As the city’s population continues to grow, how Houston’s business owners and entrepreneurs utilize such ethnic diversity may provide a model for other cities across the U.S.
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