Austin, San Antonio and other cities in Texas have ranked high on numerous lists for places to do business and quality of life in recent years. A June 6, 2011 Forbes article ranks Austin as the top city in the country for future population growth. San Antonio is ranked forth, Houston fifth, and Dallas seventh.

Several months ago, ABC News reported that Texas has been responsible for 40% of all new jobs grown in the U.S. since the recession began in late 2007. Clearly those of us who commute interstate 35 at rush hour know how popular Austin is becoming. The U.S. Census department reports that Austin has sustained a 20.4% growth rate since 2000.

For several decades Texas has been pro-growth and pro-business. Dallas is the home for more large company headquarters than any other city in the country. Texas is responsible for 8.09% of the nation’s gross domestic product as of February 2011.

Geography, demographics, quality of life, weather, regulatory climate, and aggressive recruitment of businesses to move to the lone star state have all contributed to our state’s growth.

Geography

Austin and San Antonio sit on Interstate 35, one of the nation’s busiest highways for moving goods from Mexico and Texas to all points north including Canada. San Antonio and Houston sit on Interstate 10 which is a major highway from Florida to Los Angeles, while the Dallas/Ft. Worth area have Interstate 20 and 30 running east and west through them. When you look at a map of the U.S. Texas is pretty much centered strategically to locate distribution centers. Ports along the Texas Gulf Coast are responsible for approximately 15% of the nation’s imports and exports flowing through them, and Texas has more oil and natural gas pipelines moving through it than any other state in the country.

Demographics

Austin has a highly educated workforce as many University of Texas students have found Austin the city they want to live in after graduation. As a result, wages for many fields are lower than the national average but there is a bountiful supply of knowledge and technology workers here to satisfy companies desiring to settle here. San Antonio also has an increasing supply of knowledge workers as well as tradesman and craftsman that work in the aviation and aircraft maintenance industry.

Quality of Life

One of the first things people think of when they think of Austin is quality of life. We have six major lakes within an hour of the city. Austin is a 3 ½ hour drive to the beaches on the Gulf of Mexico and the Texas Hill Country divides Austin in half. During the last ten years, the Austin Chamber of Commerce and Visitors and Convention Bureau have made Austin a destination for many large national and international conventions. Austin’s live music and nightlife are known worldwide for their homegrown eclectic variety of entertainment. 80 miles south, San Antonio sports a different but equally attractive quality of life. San Antonio is one of the America’s top vacation and convention spots because of its history, a quaint downtown tourist district, and the San Antonio river walk. Like Austin, much of San Antonio is built in the Texas hill country. It is hard to find two better cities to live, visit, and do business in.

Weather

Most of Texas and especially Austin and San Antonio experience sun and a mild climate most of the year. Austin and San Antonio both average about 300 sunny days a year. Weather is a major draw for population growth and commerce.

Regulatory Climate

Some sources claim it costs about 20% more to do business in California than the rest of the country. At the other end of the spectrum Texas has one of the lowest costs of doing business. We have no individual state income tax. Business franchise taxes are collected but there are enough loopholes in the franchise tax law that many companies don’t have to pay them. Many businesses that relocate to Texas do so citing the low regulatory cost of doing business here, the lower average wages, and the pro-business climate.

Business Recruitment

During the last ten years, Texas has spent hundreds of millions of dollars recruiting businesses to move here. The focus has been on high technology, information workers, and those industries that planners view as desirable and adding to the tax base by employing higher paid, educated workers. Some outside the state have criticized Texas for “poaching” but the truth is every state and major city lobby businesses to move to their jurisdiction. Texas has simply been better at it than other states.

All of the factors mentioned above have helped Austin and the rest of Texas grow larger and smarter while mostly preserving the reasons why many of us who have been here our whole lives. As long as planners and regulators don’t forget what attracted us here, the future should be bright for Austin, San Antonio and Central Texas.

Leslie Thacker is a partner in Austin Texas based Business Finance Solutions