The role of government in economic development is often debated but polls consistently show jobs and the economy atop the list of voters’ priorities.
Particularly if the price of oil stays where it is, Texas would be wise to make sure our state’s economy is sufficiently diverse and that starts with a dynamic entrepreneurial ecosystem so start-ups can thrive.
How does that happen? Corporate CEO’s for small, high-growth businesses cite a skilled workforce and access to capital as two primary factors for sustained growth and success.
Yes, today Texas has more high-tech, knowledge economy jobs than we did thirty-five years ago. But so does most of the rest of the country. Such companies require deep resources of talent, technology, and capital.
Innovative, high-growth companies require many different forms of capital, at different stages of development. In particular, many forms of equity capital are critical in the early stages. Together, these sources of capital are called the “capital continuum” from research funding, through prototyping, seed funding (“Angel” networks are key here), venture capital, private equity and mezzanine resources, and access to public markets.
Texas still lags the east and west coasts in the availability of venture funding and as you might imagine the major metro areas – led by Austin – get most of those dollars. http://kut.org/post/austin-s-vc-scene-leads-texas-startups-may-start-looking-elsewhere-funding
But what can be done to attract more venture funding so our best Texas companies don’t move to follow the money?
And what can be done for rural Texas? Manufacturing jobs are needed in the mini-metropolitans as are technologies to support, for example, the oil and gas sector when it does begin to flourish again (and it will).
The government can play a role alongside traditional venture capital, and the two can work together as some states have proven.
What can Texas do? It’s a debate that has begun at the Texas State Capitol leading to the 85th Texas legislative session beginning in January of 2017.
It’s a difficult needle to thread but it can be done. More to come on this subject.