How Houston’s Economic Development Engine Powers the City
When Bob Harvey looks out his window from the glittering glass of Partnership Tower, he sees a city that’s moving relentlessly toward the future. Harvey is the president and CEO of the Greater Houston Partnership, and he says his offices in Partnership Tower, adjacent to the George R. Brown Convention Center in Downtown are at Houston’s front door.
The organization Harvey leads is charged with harnessing that energy. The Greater Houston Partnership is the 11-county Houston region’s primary business advocate. It does the work of a chamber of commerce, economic development organization and a world trade center, promoting Houston as a business destination to companies across the U.S. and around the globe. The Partnership offers a wide variety of programming and networking opportunities and engages members in a number of committees to make a positive impact in the community. The organization researches and advances policy issues impacting Houston at the local, state, and federal levels. Partnering with economic development organizations across the metro area, the Partnership seeks to tell others what Houstonians have known all along: the Bayou City is great for business.
Houston-based businesses realize that, of course, and their confidence in both the city and the Greater Houston Partnership is reflected in the Partnership’s membership. More than 1,050 companies belong to the Partnership, from Fortune 500 firms with thousands of workers, to smaller companies backed by start-up entrepreneurs. They represent multiple industries, including the ones Houston is known for, like energy and medical technology, but also construction, transportation, food wholesaling and retail. Members serve on committees, network with each other, develop business partnerships, and have access to events and seminars that help them grow their companies.
The Regional Player
From its offices Downtown, the Greater Houston Partnership’s reach extends far across the region. The entity is responsible for driving Houston’s growth as a business destination, and its representatives not only prepare data reports on the city’s economic viability, they travel the world talking to heads of corporations –and host foreign delegations here at home—to convince them to come to Houston. Harvey estimates he and his Partnership colleagues make more than a dozen trips a year to other cities. He’s got a trek to the Middle East planned for next year; over the last nine months, the team has visited India and China, as well as cities across Europe and Mexico.
“The work we do shows just how international [Houston] has become,” says Harvey. “We spend a great deal of time and effort marketing and promoting Houston, not just in the U.S. but around the world. Many of the companies we work with already understand that we’re a global city, but we’re helping them become more informed about just how global we are.”
That work is paying off for Houston. Mitsubishi’s Heavy Industries moved its North American headquarters to Houston, a significant move, says Harvey. The engineering and manufacturing giant recognized Houston as a thriving ecosystem for those fields and knew its operations would grow. Meanwhile, Daikin, a Japanese corporation that manufactures HVAC equipment moved its North American operations to the region as well. Nearly 6,000 employees work for the company at its 4-million-square-foot facility in Waller County.
“That move took about seven years from our first conversation,” said Harvey, underscoring the idea that economic development is much more of a marathon than a sprint. Discussions and proposals can take years to put together. But once they do, the result is increased capital investment in the region. And when companies relocate their headquarters – or parts of their operations here – it becomes a scenario where a rising tide lifts all boats. Employees need places to live, so they buy homes. Neighborhoods grow. Businesses like restaurants and retail outlets open to serve them. Growth becomes a ripple effect.
Building a Strong, Diverse, 21st Century Economy
Anyone familiar with Houston’s past knows that the city has always been one that pushed and pursued growth. From its earliest days as a sleepy bayou outpost, business owners saw its potential as a place where trade could flourish. Then came oil, and the Ship Channel, and Houston became a global power in the energy industry. It’s never stopped being that (its nickname is The Energy Capital of the World for a reason), but Harvey says the city learned a hard lesson during the oil crash in the early 1980s: putting all its eggs in the energy basket wasn’t the best way to continue improving its economy. The city made strides to diversify, building on the foundation of the Texas Medical Center, the largest in the world. Research, new developments and new treatments were TMC hallmarks, and that reputation as an incubator helped bring more life science companies to the Bayou City.
Harvey says the city continues to push for a diverse economy. While energy, manufacturing and medicine will continue to power the engines of Houston’s economy, Harvey says future economic development will also come from digital technology.
“We’re looking to show Houston as a place that is an integral part of a rapidly evolving world,” he says. “We don’t just mean consumer technologies, like things coming out of Silicon Valley or even Austin. Houston is rightly positioned to be a place where businesses that are working on industrial applications of technology can grow. Think plant or operations optimization.”
The Partnership has been working with key stakeholders in the region to develop the 4-mile-long Innovation Corridor, that stretches northward from the Texas Medical Center, up through Hermann Park, the Museum District and Midtown, culminating in Downtown. Following the METRORail Red Line, Harvey says the Corridor has, “the right mix of amenities: housing, bars, restaurants, parks and museums alongside top-flight academic institutions and corporations, to present an attractive live, work, play option for companies seeking to hire young digital talent.”
Announcements of major projects such as Rice Management Company’s 16-acre innovation district in Midtown, anchored by The Ion innovation hub in a former Sears building, the Texas Medical Center’s TMC3 translational research campus, and MassChallenge, a global accelerator in Downtown, are all helping the city make a name for itself in the innovation space.
Harvey wants businesses to see Houston as a major player on the global stage. The city can sometimes be overlooked in the shadow of its coastal cosmopolitan rivals, but Houston has got game. In the past, Harvey says, much of Houston’s growth happened organically. A company would open and it might begin doing business with a firm in another state. That firm would see its partner’s success and decide to set up shop here as well. Now, Harvey says, the Partnership is pushing for a different model of economic growth.
“We are presenting ourselves more overtly as a competitive city,” he says. “In the past, we were largely reactive. An organization would ask us for statistics or data about a certain business sector and we’d prepare a report and share it with them. Now, we’re switching to a much more proactive hunter model. We’re going out and talking to companies who may not even think about Houston as a place for operations. We’re looking to target specific sectors.”
“The Greater Houston Partnership is like the glue that holds the region together,” says Robert Pieroni, director of economic development for Central Houston. “When companies look to move to Houston, they’re looking for consistent information about the region. And the Partnership provides that.”
Pieroni says that Houston’s rapid – and continuing – growth is part of what makes it appealing as a place to do business. Even when other cities saw economic slowdowns, Houston continued to thrive, both in the city core of Downtown and across the wider metropolitan landscape. During the first quarter of 2019, major leasing deals, renovations and new construction dotted the city from end to end. In Downtown alone, according to Pieroni’s April report to Central Houston’s board of directors, Two Houston Center signed leases with heavy hitters such as Direct Energy, Gensler and LyondellBasell Industries N.V. When it opens officially on June 1, Capitol Tower, located adjacent to the Theater District and taking up the block abutted by Capitol, Rusk, Milam and Fannin streets, will be 81 percent leased. Motiva Enterprises plans to add 300 employees to its Houston operations, and Quorum Business Solutions is looking to add 600.
“This really shows the strength of the Houston market,” Pieroni says. “It’s energized. And people want to be around all this energy.”
Harvey loves seeing the ever-changing landscape of the region, and he recognizes that the growth in Downtown helps present Houston in a strong light to the world.
“When you have dynamic growth centers, like we’ve seen in Downtown, it shows that we are a vibrant economy,” he says. “We’re a place where people want to be. We can attract top talent because we are a dynamic city.”
Redefining a Houston “Local”
That dynamism and energy can be seen in Houston’s make up. Harvey says that in the greater Houston region, nearly one in four people living here is from outside the United States. The presence of more than 90 consulates in the city, coupled with the more than 145 languages spoken here, are tangible reminders that being a global city is about more than just having worldwide headquarters. Those statistics speak to the day-to-day of living in Houston, where people from around the world have come to live and work. The city’s many international cultural centers provide spaces for the newly arrived and expats not only to find familiar pieces of their homelands, but also to share their experiences with fellow Houstonians. As the country continues its push to more knowledge-economy jobs requiring highly skilled workers, a vibrant international culture within the region is one more attractive selling point.
“We’re redefining what it means to move to Houston from elsewhere,” says Harvey. “People can come here from anywhere and feel at home. They can immediately feel welcome and see that there are places where they can get involved socially. I think part of that is the concept of southern hospitality, but it’s also the nature of Houston. Our first founders came here from somewhere else.”
He says the idea that people relocating and being able to find things as simple as the foods they loved at home is a huge consideration for companies that want to relocate or expand operations.
“We can make those kinds of promises to businesses, because Houston is so dynamic,” says Harvey.
Pieroni echoes Harvey’s statements and points out that Houston’s international culture isn’t only attractive to foreign nationals. He’s seeing a paradigm shift in how workers decide where to live, and Houston’s reputation as a place with a growing economy, an established international culture and somewhere that top talent gathers makes it an attractive center for would-be employees.
“It used to be you’d graduate college, you’d get a job and you’d move to wherever that job was,” he says. “Now, the trend is much more that young people in these highly skilled professions graduate and they look at a map. ‘Where do I want to live?’ The same thing happens when they want to change jobs. People are looking for experiences.”
Pieroni says that Houston provides all of that. With its temperate climate, access to global destinations via both airports, and a host of entertainment options like the city’s professional sports teams, craft breweries, theater, and any number of other quality-of-life factors, the Bayou City is definitely a place that’s highly ranked for relocation.
“Everyone’s definition of quality of life is different,” he says. “But in Houston, whatever your definition is, odds are you can find it. When it comes to the character of a place, Houston has a kind of energy that people want to be around.”
That energy is attracting talent across multiple sectors, and the Partnership is working to bring in more. He says the city will always be a hub for energy, but the organization is actively pitching Houston for what he calls “Energy 2.0.”
“The energy industry is changing, it’s not just about pulling oil from the ground and distributing it anymore,” he says. “We’re talking about renewables, about the technologies that allow traditional energy practices like drilling to be more efficient. We have the infrastructure in place here to help companies succeed.”
Touting Houston as America’s Headquarters City
The Partnership is also continuing to promote the region in terms of headquarters recruitment. Yes, it’s the home to nearly two dozen Fortune 500 headquarters, but Harvey wants businesses to also consider the idea of having their North American or other regional headquarters here. To that end, the Greater Houston Partnership has the support of CEOs from Houston companies. The Partnership, as a business representation organization, has always had multiple committees and advisory councils on which its members can serve. Having those members share their own experiences about doing business in Houston carries a lot of weight with corporation heads considering a move.
“It’s a good time in Houston,” says Pieroni, as he looks at several projects in the works for Downtown, noting that as companies on the fence about Houston see their peers succeed here, it moves them closer to bringing operations to the city. “We’ve got 12 projects underway [in Downtown] and five more planned.”
That kind of economic development may not be something that’s front of mind for people, but whether they know it or not, it affects their daily lives. An industrial tech company that moves into a Downtown office space obviously brings employees with it. But those employees need places to eat, which means restaurants take a new look at a location. Residential real estate is helped by companies expanding in or coming to Houston. The snowball effect for the region is largely positive. And, as the Greater Houston Partnership collaborates with other regional economic development organizations and Central Houston, it continues its clarion call of Houston as a place that is not only open for business, but ready with the talent, infrastructure and supply chains to make a company a success.
“We tend to take for granted this idea that because we’ve always grown, we are going to continue to grow,” says Harvey. “But we’ve realized that we need to do outreach and really ensure that we share the message that Houston is a terrific business center.”
Harvey knows that the Greater Houston Partnership plays an essential role in sharing that message. And it’s definitely getting out. The organization host more than 150 trade delegations from around the globe in its offices, and he sees the way people from outside the city react when they see the hive of activity outside his windows. The city core is vibrant with activity, as people head from work to entertainment options or back home. And more than any data point or what fellow business leaders have to say, that very vibrancy becomes a visible marker for what business life in Houston could be like if companies opened here.
“This tells the story of Houston,” Harvey says. “And it says that things are going well, but we have to keep evolving. We’re always moving ahead.”