GHP says tech is key to area’s economy
Houston must continue to diversify its economy beyond oil and gas and develop its technology sector if it is going to thrive in the post COVID-19 world, according to Greater Houston Partnership.
Amy Chronis, chair of business-financed economic development group, and Bob Harvey, the partnership’s CEO, said Tuesday that the pandemic has shaken up metropolitan economies, exposing strengths and weaknesses that could determine the future. The pandemic again revealed the vulnerability of the oil and gas sector and the ever-increasing reach of technology — from ecommerce to videoconferencing — into households and businesses.
“I believe the pecking order of global cities is being re-established as we speak,” Chronis said. “Everything is up for grabs, and there will be metros that are winners and losers.”
Houston’s economy was harder hit by the pandemic than other metro areas because of the concentration of oil and gas companies here. The oil bust — spurred by a collapse in petroleum demand and prices last spring — cost the region more than 100,000 energy jobs, according to the part
nership. Some 500 companies in exploration and production and oil field services filed for bankruptcy.
“These were the bedrock jobs of Houston’s past success,” Chronis said, “and I don't believe we will be getting those back one-forone.”
Chronis, however, said Houston has made progress in building its tech sector. The Ion, a 288,000square-foot innovation space in Midtown is slated to open later this quarter and has attracted tenants such as Microsoft and Chevron Technology Ventures, an investment arm of the U.S. oil major. Developed by Rice University, the Ion will serve as a hub for an Innovation District stretching from downtown Houston to the Texas Medical Center.
Harvey noted that Amazon and Google have expanded their presence in Houston, adding hundreds of jobs. In November, tech giant Hewlett Packard Enterprise said it would relocate its corporate headquarters to Houston from Silicon Valley.
Economic indicators, he added, suggest that after a difficult 2020, better days are ahead for the local economy. First-time claims for unemployment insurance fell in Texas, the Labor Department reported last week, while manufacturing activity expanded in the state in January, according to the Federal Reserve Bank of Dallas. Oil prices are back above $50 a barrel.
“For nearly a year now, our members and businesses across Houston have struggled to keep employees and customers safe while maintaining operations as best they could,” Harvey said. “This has proven more difficult for some than others, but time and again I’m amazed by the resiliency of Houston companies to innovate and persevere in the face of significant obstacles.”