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Small Businesses and Their Impact on Texas

Small Businesses and Their Impact on Texas

The Office of the Governor contracted with CCBR to investigate the economic impact of Texas businesses with fewer than 100 employees and to identify factors that contribute to their success or failure. In order to achieve this goal, a multi-prong approach was taken that includes:

  • Economic analyses estimating the impacts of small business based on region, industry and size
  • Exploring and analyzing issues of small business ownership, birth and death rates of small businesses and their impacts on job creation and destruction
  • Examining processes associated with export opportunities for small businesses in Texas, as well as providing input from a sample of city managers and economic development directors
  • Compiling a summary of relevant literature identifying potential indicators that may impact small business activity

 

Key Takeaways

  • In 2012, small firms, defined by the Small Business Administration as those with fewer than 500 employees, represented 98.6% of Texas employers. A more useful definition may be SBF100 firms (those employing less than 100 workers) by putting more emphasis on the most entre preneurial sector of the economy.
  • In 2012, SBF100 firms hired roughly 3 million workers and had an estimated total economic impact of $844 billion in gross output.
  • Of these firms, the construction ($68.8 billion), professional-scientific & technical services ($68.1 billion), retail trade ($62.4 billion) and health & social services ($53.6 billion) sectors had the most impact.
  • SBF 100 firms in 2012 generated $13.866 billion in state revenue and $14.965 billion in federal revenue.
  • Studies have shown that SBF 100 firms provided experience and on-the-job training to a broader segment of the population, on average, than larger firms do.
  • Studies have also shown that children of small business owners are more likely to start small businesses of their own.
  • A growing portion of the workforce, known as “giggers”, have found autonomy and increased income by putting their higher skillsets to work in multiple temporary work assignments. This portion is projected to rise, placing growing importance on the need to understand the issues associated with it.
  • Recent studies have shown that job creation does not depend on firm size, but rather on firm age. In other words, newer small firms likely create more jobs (on their way to becoming large firms) than older small firms.
  • Rural areas in Texas, as well as the entire US, are transitioning from an agricultural and manufacturing-dominated economy to a more sustainable and diverse urban-rural interdependence model.
  • Cities with a higher concentration of creative class workers are more resilient in turbulent economic times, but studies point to the lack of focus on negative impacts this has on low-income workers dealing with higher costs of living.
  • Small business development is greatly discouraged by the lack of capital, assets, information, and proper management.

 


Download the Full Report at: http://bit.ly/TXsmallbizimpact2016

Download the Executive Summary at: http://bit.ly/TXsmallbizimpact16_execsum


The Connection Between Creativity and Entrepreneurship

The Connection Between Creativity and Entrepreneurship

Jobs growing in GIS technology at 35%, schools offering programs

Jobs growing in GIS technology at 35%, schools offering programs

New UTSA Study Stresses Diversification In Economic Development For Oil Boom Towns

New UTSA Study Stresses Diversification In Economic Development For Oil Boom Towns

In a new study published in The Journal of Regional Analysis & Policy, Thomas Tunstall, research director of the UTSA Institute for Economic Development, describes how regions affected by the oil boom in the Eagle Ford Shale can avoid becoming ghost towns after the revenues dry up.

“There may be 1,000 or more ghost towns in Texas,” Tunstall said. “We have to figure out a way to keep the communities that are still here viable.”

In his new study, Tunstall looks at several Eagle Ford Shale counties and towns whose fortunes have been made since the oil boom in the past five years. And though the area could continue producing at a high rate for years, the key to sustaining an economy in previously sleepy towns is to use that extra money to diversify the local economy. That way, when the price of oil falls or, far into the future, the oil dries up, the town remains economically stable.

“We saw what happened to Houston in the 1980s when oil prices dropped,” Tunstall said. “In a lot of cases, people were packing up and leaving. It’s completely avoidable.”

He used the example of Gonzales, Texas as a town that prospered from oil production. It has also diversified by making itself a tourist destination as the birthplace of the Texas Revolution.

“One way to do it is to look at the reason the town is there,” he said. “Sometimes a town becomes a ghost town because a highway or rail line bypassed it, or in many cases farming community became unnecessary because of the widespread mechanization of agriculture.”

Some towns in the Eagle Ford Shale have looked into becoming Free Trade Zones, allowing manufacturing companies to come in and operate without tariffs. Tunstall’s colleagues in the UTSA Institute for Economic Development also analyzed the town of Asherton, Texas that is diversifying by taking advantage of a crop that hadn’t been previously singled out as a commodity in Texas: olives. The state now produces about 54 tons per year. In 2002, it wasn’t producing any.

“Gonzales, Karnes City and Pleasanton have all done a great job of fostering economic development,” he said. “Some cities haven’t, either because their governments just aren’t in sync or they’re just disorganized. We hope that these cities take the opportunity to steward the additional tax revenue they’ve received, because nothing lasts forever.”

GIS Tools Offer Critical Defense and Intelligence Capabilities to U.S. Military for National Security

GIS Tools Offer Critical Defense and Intelligence Capabilities to U.S. Military for National Security

UTSA and key Mexican partners release preliminary report on impacts of energy reform on the Mexican Economy

UTSA and key Mexican partners release preliminary report on impacts of energy reform on the Mexican Economy

The University of Texas at San Antonio’s Institute for Economic Development, the Universidad Autónoma de Nuevo León, the Asociación de Empresarios Mexicanos, and the Woodrow Wilson Center are set to release a preliminary report to gauge the growth and the effects that the oil and natural gas industry will have for residents and decision makers in Mexico.

The report contains a general overview on the Energy Reform, an economic background on oil and natural gas (especially trade between US and México) a state level profile, infrastructure and educational certificates specific to oil and natural gas education. The core study area concentrates on the economic impact on the following Mexican states: Coahuila, Nuevo León, Tamaulipas and Veracruz.

“Opportunities for unconventional or shale oil and gas productions in Mexico are in the earliest stages of development. Due to its close proximity to major shale field development in South and West Texas, Mexico is particularly well positioned to take advantage of unconventional extraction techniques,” said Thomas Tunstall, research director at the UTSA Institute for Economic Development.

After being elected in 2012, Mexican President Enrique Peña Nieto worked with other ruling parties to create a “Pact for Mexico” which included 11 important reforms, one of which was energy. The initial proposed reforms focused on removing hydrocarbons from the sectors controlled directly by the government. Thus opening up oil and gas fields through exploration and production contracts with the Mexican government, as well the granting of permits for the development of a robust and well-integrated hydrocarbons infrastructure.

México sits atop an estimated 545 trillion cubic feet (Tcf) of shale natural gas reserves, and additional trillions of cubic feet of conventional reserves. The bulk of México’s shale prospects appear to lie in the north and northeastern sections of the country, where infrastructure is often largely undeveloped. This means that in order to tap the country’s bounty of shale oil and gas, infrastructure such as roads, housing, rail, pipeline and many others will have to be built out first. The ability to develop a suitably skilled workforce will be key to long-term success. Security issues must also be addressed.

The second part of the report introduces a preliminary Business Roadmap, A Guide for the Operator, which briefly describes the necessary steps a prospective operator in the upstream activity in Mexico will have to comply with in order to expand or initiate operations in Mexico.

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Download the full preliminary report at : http://bit.ly/Mexico-OilGas-Prelim

Descargue el informe preliminar completo en : http://bit.ly/Mexico-OilGas-Prelim-ESP 
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Texas natural gas grants totaling $53 million generated $128 million in economic impact last year, according to UTSA research

Texas natural gas grants totaling $53 million generated $128 million in economic impact last year, according to UTSA research

The University of Texas at San Antonio Institute for Economic Development released a study today showing that three State grants to support natural gas programs generated $128 million in economic impact, generated $79.1 million in gross state product and supported 927 full-time jobs in 2014. The three grants, totaling $52.9 million, generated that impact by supporting the construction of new natural gas fueling stations and the adoption of natural gas vehicles.

The Texas Commission on Environmental Quality (TCEQ) administered the three grants: the Clean Transportation Triangle (CTT), the Alternative Fueling Facilities Program (AFFP) and the Texas Natural Gas Vehicle Program (TNGVP).

The CTT and AFFP encourage the building of natural gas fueling infrastructure to connect Dallas/Fort Worth, San Antonio, Austin, and Houston – an area known as the Texas Triangle – and to support fleets and other drivers of alternative fuel vehicles. The Texas Triangle comprises 60,000 square miles and is home to more than 70 percent of the state’s residents.

The Texas Natural Gas Vehicle Program (TNGVP) enables companies that own or operate heavy/medium duty motor vehicles to repower those vehicles with a natural gas engine, or replace those vehicles with natural gas vehicles.

The CTT and AFFP grants totaled nearly $21 million and supported 54 natural gas station applicants from 2012 to 2014. The TNGVP grants, $32 million, supported 618 natural gas vehicle purchases and four vehicle conversations for 50 applicants from 2012 to 2014.

“Our research shows that public investment in natural gas fueling stations and the vehicles they support are positively and significantly impacting the Texas economy by providing jobs and improving air quality for the state,” said Tom Tunstall, director of research at the UTSA Institute of Economic Development.

UTSA’s research also found that, in 2013, the three TCEQ grants generated $30.2 million in economic output, $14.7 in gross state product and 132 full-time jobs.

Rep. Isaac quote: “We all want to keep our economy strong and our air clean, and this study shows how the Texas Clean Transportation Triangle helps us do exactly that,” Isaac said. “That’s why I filed HB 652 to block efforts of transferring state revenue away from the fund that supports the Triangle. We have a broad coalition, including Sierra Club, Texas Chemical Council, America’s Natural Gas Alliance, Texas Association of Business, and the City of Austin, among others, which shows that this is an issue that transcends party lines.”

State monies provided by the incentive grants contributed approximately 25 percent of the total of private sector investment in facilities spending, and provided a highly beneficial and positive economic impact for Texas related to jobs, environmental sustainability, energy independence, and the strength of Texas industry and its citizens.

UTSA economists predict that the impact of the three grants will skyrocket in 2018, generating:

  • $484 million in total economic output
  • $302 million gross state product, and
  • 3,076 full-time jobs

Newly released data from the Texas Railroad Commission shows that natural gas vehicles (NGVs) are the most popular alternative fuel vehicles in the state, with more than 7,000 NGVs currently in operation. According to the U.S. Department of Energy, natural gas burns cleaner than gasoline or diesel fuels because of its lower carbon content.

“Natural gas is generating big benefits for Texas,” said Texas Railroad Commissioner David Porter. “By investing in programs like the Texas Clean Transportation Triangle and my Natural Gas Initiative to get more natural gas vehicles on Texas roads, we’re supporting Texas jobs and keeping our economy strong. This study is a great reminder that when we use more Texas-produced natural gas to make vehicle fleets cleaner, we all benefit.”

The UTSA Institute for Economic Development is dedicated to creating jobs, growing businesses and fostering economic development. Its 12 centers and programs provide professional business advising, technical training, research and strategic planning to entrepreneurs, business owners and community leaders.

Other institute research reports include Economic Impact of Oil and Gas Activities in the West Texas Energy Consortium Region (December 2013), Economic Impact of the Eagle Ford Shale (March 2013), Eagle Ford Shale Economic Impact and Workforce Analysis (October 2012) and other studies.

Economic Impacts of Natural Gas Fueling Station Infrastructure and Vehicle Conversions in the Texas Clean Transportation Triangle was prepared by the Center for Community and Business Research at the UTSA Institute for Economic Development. The research was supported with funding from America’s Natural Gas Alliance (ANGA).

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View the full report: CLICK HERE.

View the report’s executive summary: CLICK HERE

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Eagle Ford Shale generated more than $87 billion in economic output for Texas in 2013

Eagle Ford Shale generated more than $87 billion in economic output for Texas in 2013

The production of oil and natural gas in the Eagle Ford Shale generated more than $87 billion in total economic output for the state last year, according to a study released today by The University of Texas at San Antonio (UTSA) Institute for Economic Development. UTSA researchers also concluded that shale activity supported almost 155,000 full-time equivalent jobs and provided more than $4.4 billion to local and state governments in 2013.

UTSA projects that by 2023 the region will support more than 196,000 jobs and generate more than $137 billion for Texas. These new numbers exceed what was projected in previous studies due to the attraction of new manufacturing projects associated with natural gas and additional processing, refining and port facilities. The economic output of the region is forecast to continue solid growth long-term, considering current trends of stable energy prices and industry innovation.

The study, UTSA’s fourth, examined the economic impact of the Eagle Ford Shale on the 21 counties directly and indirectly involved in production. The 15 core counties where activity is most prevalent are Atascosa, Bee, DeWitt, Dimmit, Frio, Gonzales, Karnes, La Salle, Lavaca, Live Oak, Maverick, McMullen, Webb, Wilson and Zavala. The six neighboring counties where significant activity not including extraction is occurring are Bexar, Jim Wells, Nueces, San Patricio, Uvalde and Victoria.

To date, oil and condensate production in the Eagle Ford Shale has grown from 581 barrels per day in 2008 to more than 1.5 million barrels per day as of August 2014, continuing to exceed expectations and attracting more capital investments than any shale field in the United States. That economic growth is making community sustainability a more achievable goal.

“The immense economic development is providing the wherewithal to address needs that are important to both industry and communities,” said Robert McKinley, UTSA associate vice president of economic development. “Investments in infrastructure – roads, water, wastewater, education, medical facilities and other things – are the key foundational components needed to ensure the long-term viability of many rural communities in the region.

“The ongoing activity presents South Texas community leaders with a rare opportunity to ensure the long-term viability of their cities, towns and counties,” said Thomas Tunstall, research director of the UTSA Institute for Economic Development.

“With the enormous growth in our energy sectors, in particular the Eagle Ford Shale play, comes a multitude of challenging opportunities,” said State Senator Carlos Uresti. “State policy makers, business leaders and other stakeholders rely on the best research available from our higher education community, such as UTSA, in order to tackle these challenges and ensure our state takes full advantage of this vital opportunity.”

UTSA is conducting additional projects to support stakeholders in the Eagle Ford region. Notably, the Center for Urban and Regional Planning in the UTSA College of Architecture, Construction and Planning regularly consults with communities across South Texas on planning, design, environmental, housing and development issues. Likewise, the UTSA College of Public Policy and Institute of Economic Development are collaborating to develop and strengthen municipal governments in the Eagle Ford Shale and West Texas regions.

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Download the full report here

Download the report appendix here

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UTSA Institute for Economic Development researches Economic Impact of Oil and Natural Gas in 16-county region of West Texas

UTSA Institute for Economic Development researches Economic Impact of Oil and Natural Gas in 16-county region of West Texas

Development of oil and natural gas in a 16-county region of West Texas added more than $14.5 billion in total economic impact during 2012, according to a study released today by the Center for Community and Business Research in The University of Texas at San Antonio Institute for Economic Development. In addition, the region supported 21,450 full-time jobs for workers in oil and gas, drilling, support operations, pipeline construction, refineries and petrochemicals.

Highlights of the UTSA study concluded that in 2012 the region generated:

  • $1 billion in salaries and benefits paid to workers
  • $6.2 billion in gross regional product (value added)
  • $472 million in state revenue, including $187.4 million in severance taxes
  • $447 million in local government revenue

The UTSA Center for Community and Business Research was contracted by the West Texas Energy Consortium (WTxEC) to estimate the economic impact of the oil and gas industry on certain counties in the Consortium’s area during 2012, and create a forecast for the year 2022. The Consortium’s area consists of the Concho Valley, West Central Texas and Permian Basin regions.

The region has a long history of oil and gas activity and, in recent years, has been affected not only by renewed attention in vertical wells but also new techniques, such as horizontal drilling coupled with hydraulic fracture stimulation. The study estimates that close to 854 vertical wells and 57 horizontal wells (including 12 directional wells) were completed in 2012.

“This baseline study is intended to help communities in West Texas plan and prepare for the prospect for increased oil and gas production in the area down the line. For many counties, activity is clearly in the early stages,” said Thomas Tunstall, research director at the UTSA Institute for Economic Development and principal investigator for the study.

While taking into consideration low and high-price scenarios, the impact in 2022 could vary widely. But UTSA estimates growth in full-time jobs supported by the oil and gas industry could potentially increase by 42.2 percent from 2012-2022. This study estimates a scenario where low oil prices in the future could produce an output as low as $7.6 billion, and where high oil prices could see enormous growth, as high as $34.3 billion. The ranges of these figures are broad due to high variability in the prices of oil and gas, the challenges of forecasting future oil and gas activities, changes in the number of wells per rig, and changes in productivity per well.

The 16-county area researched encompassed various shales including the Cline Shale, a 70 mile-wide by 140 mile-long formation that stretches along 14 counties in West Texas. The formation produces natural gas, condensate, oil, and natural gas liquids, with margins more favorable than other shale plays.

The Center for Community and Business Research in the UTSA Institute for Economic Development conducts primary research on community and business development in South Texas and the border region. In addition to the study released today, the Center has published

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Download the full report here.

Economic Impact of the Oil and Gas Activities in the West Texas Energy Consortium Region

The West Texas Energy Consortium (“Consortium” or WTxEC) is an open forum for coordination and information sharing, organized by the Workforce Solutions Boards in Concho Valley, West Central Texas, and Permian Basin Regions. The WTxEC has contracted with the Center for Community and Business Research at The University of Texas at San Antonio’s Institute for Economic Development to estimate the economic impacts of the oil and gas industry on certain counties in the Consortium in the year 2012, and to create a forecast for the year 2022.

Download the full reports here:

DOWNLOAD HERE – Executive Summary WTxEC Region: Ten County-Level Impacts of Oil and Gas

DOWNLOAD HERE – Economic Impact of Oil and Gas Activities in the West Texas Energy Consortium Region – Phase 2

DOWNLOAD HERE – Economic Impact of Oil and Gas Activities in the West Texas Energy Consortium Region – Phase 1