Overview 1800 to
Independence &
Early Statehood
Civil War to
World War II
Modern Texas Economy
Travel, retail, and technology

Oil and natural gas production bestowed new economic importance and diversity on the Texas economy. Nevertheless, they only reinforced the state's reliance on the production of so-called "primary goods"--mining (including oil and natural gas production), timber, agriculture and ranching. It would take a World War, followed by a post-war national economic boom, to really build a significant base for industrial production, create several transportation hubs in the new air travel industry, and establish the state as a platform for high technology research and development.

The energy sector is still prominent among Texas industries, as are ranching, agriculture, and agriculture related industries like cotton ginning. But other industries such as airlines, travel and entertainment, and technology (including computers, aerospace, and telecommunications) have grown to considerable prominence.

In part these industries have enjoyed considerable encouragement and dollars from the federal government--particularly the aerospace industry. National and even international politics played important roles here. The arms and space races with Cold War foe the Soviet Union led to creation of the NASA facility near Houston. In turn, the aerospace industry has spawned growth in related industries such as telecommunications, information technology, and the airline industry and travel reservations industries. The airline and air travel industry has been a particular beneficiary of the fortuitous location of Texas roughly halfway between the two coasts, as well as from the state's burgeoning and increasingly urbanized population.

Some of the largest companies operating in the state in other important industries, such as retail and manufacturing (e.g., CVS Pharmacy, Office Depot, Safeway, Coca-Cola, and International Paper), generally are not headquartered in Texas. Still, these companies represent considerable levels of employment and production. The prominence of these out-of-state corporations in Texas reflects the increasingly integrated nature of the national economy.

This integration was facilitated in part by the creation of the interstate highway system, which was initiated under 1956 legislation creating the National System of Interstate and Defense Highways, ostensibly for the rapid movement of troops and materiel for defense of the national territory. The interstate highway system gave a considerable boost to the development of corporate restaurant chains. The prominence of numerous corporate chain restaurant companies (including Church's, Popeye's, Chili's, Red Lobster, and Luby's, and others) among the state's top employers in recent years confirms the symbiotic relationship of the dining and entertainment sector to the national highway system. The size of these corporate restaurant chains also reflects the explosion of suburbs and exurbs across the state, which was in turn facilitated by extensive highways.

The development of this emerging socio-economic complex--whose key components included petroleum, automobiles, highways, suburbanization, and chain retail and restaurants--was reinforced by forces already operating within the state. The Texas Good Roads and Transportation Association had already been established in 1932 to promote public expenditure on the building and maintenance of roads in Texas.

As early as 1946--well before President Eisenhower's push for a national highway system--the Good Roads Association was instrumental in pushing through the 1946 "Good Roads Amendment" to the Texas Constitution (see the chapter on the Texas Constitution). This amendment required that three-quarters of all revenue from state gasoline taxes be "used for the sole purpose of acquiring rights of way, constructing, maintaining, and policing... public road ways" and for the administration of traffic safety laws.

Although Texas-based companies are not so dominant in other economic sectors, they do represent some of the leading businesses in their industries. The high-technology sector includes such recognizable names as personal computer manufacturer Dell Computer Corporation (based in Round Rock, Texas), telecommunications giant AT&T (bought in 2005 by Southwestern Bell Communications headquartered in San Antonio), and chip maker Texas Instruments (Dallas). All three companies are among the top 100 employers in Texas.

Dell Headquarters, Round Rock Texas

In the retail sector several of the biggest employers are headquartered in the Lone Star State. These include: 7-Eleven, Inc. based in Dallas, J.C. Penney Company (which also owns Eckerd Drug) based in Plano, Radio Shack in Fort Worth, and Winn Dixie also based in Fort Worth. In the services and finance sectors two Texas based companies are notable for being large employers. Administaff is based in Kingwood, while Cullen Frost Bankers claims San Antonio as home.

This brief list of industries and companies conveys just how large and diverse the economy of Texas really is today.

Source: Handbook of Texas Online; National Grange; Texas State Library and Archives Commission; Dell, Inc. (full source)