12 Factors Shaping Our State’s Future

1. Geography and a Changing Global Economy

Texans have a strong shared identity across dramatically different regions. In water supply and agriculture and health care and education, needs vary widely between East Texas and West Texas, or between the Panhandle and the Valley. These regions all need access to world markets, but one-size-fits-all solutions seldom work in Texas given the tremendous variety among the places Texans live and work. 

2. Urban and Rural

About 90% of Texans live in urban areas today, and that trend will continue through 2036. At the same time, Texas’s rural counties provide invaluable energy, water supplies, agriculture production, and exports that fuel the state’s economy. The interdependency between urban and rural areas will shape state policies and programs to reflect and respond to these unique needs. 

3. A Vibrant and Vital Border

The Texas/Mexico border is an extraordinary asset and challenge — it is key to Texas’s economic growth and export success. Coordination of state and national policies on border issues — including trade, transportation, energy, immigration, water, and the environment — is critical and will continue to require Texas’s leadership. 

4. Poverty

Economic growth has not equally benefited all Texans. Even though the overall poverty rate in Texas has largely held steady, the share of Texas public school students qualifying for free and reduced-priced lunches has increased from 35% in 1988 to 61% today.

5. Population Diversity

Recent projections indicate Texas’s Hispanic and African American populations will both increase more than 40% by 2036, and the state’s Asian population will be its fastest growing, more than doubling in size. The Anglo population is projected to steadily increase, although at a slower rate than other groups. And the state’s increasingly diverse population will bring new skills, ideas and perspectives, helping Texas retain talent, promote competitiveness, and increase economic growth. Domestic and international migration into Texas provides an important boost for the state’s economy — nearly half of the state’s workers are non-native Texans. And the higher educational attainment rates of these Texas transplants have created a better-educated workforce. Texas has especially benefited from international migration in high-skill fields such as science, technology, and health care. However, migration of all kinds is beginning to slow, making it increasingly important to prepare Texas students to meet our workforce needs. 

6. Demographics

Population growth helps drive economic growth. Texas is the second most-populous state in the country and has five of the nation’s 15 fastest-growing cities. By 2036, Texas is expected to add nearly 10 million more people, increasing our state population to 38 million. Further, by 2036, the population of Texans 65-years-old and older is projected to grow by 78%, while the overall population will grow by less than half that (33%). Since older Texans use more health care than younger Texans, an increasing over-65 population will create pressures on the state budget and on Texas families. These shifts within Texas’s population also will have major impacts on education, infrastructure, and other core state functions.

7. An Interconnected Economy

Trade agreements and technology have made it far more efficient for businesses to cross borders and coordinate international supply chains. Thanks in large part to free-trade agreements and abundant, low-cost energy, Texas has become the nation’s export powerhouse and one of the most globalized states in the nation. In recent years, exports have accounted for 17.8% of the state’s GDP and supported an estimated 910,000 jobs. So uncertain and shifting trade policies could have a disproportionate negative effect on Texas. 

8. A Long and Valuable Coastline

Texas is a global maritime powerhouse. Refineries, fishing boats, shipping terminals, cruise lines, and tourists all converge at the state’s central location on the Gulf of Mexico. From the Sabine River at Texas’s border with Louisiana to the Rio Grande at the Mexican border, Texas’s coastal counties (including Harris County) accounted for 33.4% of total Texas real gross product in 2014.

9. Separation of Powers

Under our nation’s federal system, states have significant authority to address the 36 goals outlined in this framework, but state governments do not operate in a vacuum. Federal laws and regulations often limit state powers and can restrict innovation. And while the Strategic Framework focuses primarily on state-level goals, much of the day-to-day government activity impacting Texans occurs in local communities, spearheaded by city and county officials and local school boards and health care districts. Aligning all levels of government to address these goals will help Texas tackle today’s problems and those it will face in its third century. 

10. Climate

More frequent extreme weather events will pose a threat to Texans’ safety and affect the state’s water supply, production of food and fiber, resiliency of infrastructure, and more — all of which have an impact on the state budget. While Texas weather has always had wild day-to-day extremes, potential long-term changes to the state’s climate exponentially increase the risk and intensity of weather events. In the past decade, Texas has experienced everything from its worst one-year drought on record (2011) to its wettest year (2015) to the greatest single-storm rainfall in the nation’s history (2017).  Texas also has more billion-dollar weather disasters than any other state. 

11. Advancements in technology

From big data and advanced analytics to artificial intelligence to robotics, technology can stimulate economic growth and greatly improve Texans’ quality of life. These advancements also could disrupt industry and transform the labor market, meaning the state needs to adapt at the speed of technological change. Our state’s economic health may hinge on how quickly Texas can embrace the automation age, especially as technological advancements automate routine, low-skilled jobs. The state is projected to see 19% job growth by 2030, the most of any state and more than double the national average. But Texas could also experience a 23% job displacement rate, which translates into 3.6 million displaced jobs. More than 1-in-4 displacements are likely to affect workers with less than a bachelor’s degree.

12. Connected Living

Texans increasingly integrate technology and connectivity into their daily lives, affecting everything from shopping and entertainment to health and wellness to education and work. This can especially benefit rural areas, where digital technologies can improve access to opportunities and services through online learning, telemedicine, remote work, and more. However, this also brings challenges, including an increased need for both digital literacy skills and access to high-speed internet — particularly in rural areas. And it will be important for policymakers to keep pace with the regulatory, privacy, and other concerns.