Published Jan 26, 2021 by Maggie Martin
2021 Partnership Board Chair Amy Chronis, Houston Managing Partner for Deloitte, discussed what Houston must do to ensure it remains a competitive global city in a post-pandemic world at the organization's virtual Annual Meeting on January 26.
I am so pleased to be here with you today, and to serve as the chair of the Partnership.
Houston is an amazing, vibrant place and I believe it has the opportunity and the momentum to be one of the world's leading global cities over the next several decades.
We have an incredible history of innovation.
Changing the world is in our nature and our very DNA.
After all, we are the city that put the man on the Moon.
We are the city that built an inland port 50 miles from the coast, that now moves more goods than any other port in the country.
We are the place that is advancing cancer research.
We are the global brain trust of the industry that powers the world.
Put simply, we are the city that solves problems that matter.
While Houston has progressed, the world around us has rapidly changed. Driven by the rise of digital tech, this pace of change has accelerated over the last 10-15 years.
The digital transformation has come quickly, and the cities that have embraced it have enjoyed explosive growth.
And while we know the world has changed around us, the COVID-19 pandemic is reshaping our world again. In fact, I believe the pecking order of global cities is being re-established as we speak.
Everything is up for grabs, and there will be metros that are winners and losers.
The winners will be the ones that look at the old way of doing business, before the pandemic, and think strategically about where the world is headed as we emerge from this global crisis.
Unfortunately, here in Houston, the combined economic impacts of the pandemic and the energy downturn have been especially pronounced.
In the first two months of the pandemic, we lost 350,000 jobs. We've recouped about 200,000 of those, meaning about 150,000 Houstonians who had jobs this time last year are unemployed or left the region.
While many major cities across the country experienced a similar impact, Houston’s pandemic challenges have been worsened by weak oil and gas markets over the better part of the last six years.
Over that time, we've lost more than 100,000 upstream energy jobs and 500 exploration and oil field service companies have filed for bankruptcy. These were the bedrock jobs of Houston’s past success, and I don't believe we will be getting those back one-for-one.
So, to those of us at the Partnership who think about Houston’s growth, that's a fairly dire picture.
But despite our challenges, I know Houston’s best days are still ahead of us. That optimism likely came from my upbringing, and my path to Houston.
My husband and I are Midwest transplants who are proud to have chosen Houston for the start of our life journey together over 35 years ago.
I was raised in a large family on a farm in Ohio. My husband, John, is a first-generation Greek immigrant.
As we were graduating and exploring career opportunities, we decided Houston was the most exciting frontier available with the greatest opportunity.
I knew very little about Texas, other than images of tumbleweeds. I still clearly remember a recruiter answering my question - that Houston was a welcoming melting pot where anyone with drive and ambition could become successful. That it didn't matter where you went to school or whom you knew.
We couldn't be more grateful that Texas, and Houston, in particular, have been an amazing blessing for us and our family.
We couldn't be prouder that our three grown children have chosen Texas for both their higher education and early career journeys.
Houston remains a frontier filled with possibilities welcoming people from all around the world.
I don't know about you, but I have a competitive spirit and like winning. As a proud Houstonian, I want to ensure Houston wins, and I believe we are already on the right path.
So, which cities will be the winners of the post-pandemic realignment?
I suggest it will be those metros whose businesses are focused on developing the technologies and driving innovations that change the world. It's not looking backwards, it's looking forward.
That is what I want to speak to you about today: here in Houston, we must be laser-focused on building a strong, diverse, 21st century economy.
Since I might have depressed some of you a few moments ago, let me tell you why I am bullish on Houston.
Over time, Houston has both diversified its economy, and more recently, has bolstered our innovation ecosystem.
Over the past few years, entrepreneurs, investors, academic institutions, local government, and the corporate sector have come together to unite, grow, and promote Houston's start-up ecosystem.
The progress since 2016 is staggering.
Houston has long lagged in venture capital funding, so we've made that a priority.
Since 2016, VC investment in Houston has grown almost 250%, up to a record $714 million dollars raised in 2020. Life sciences and health care became Houston's top-funded VC-funded industry, ahead of info tech and energy.
We've also focused on building tech density. Houston is known for its sprawl, but we've capitalized on the hubs of density, energizing them with new collaborative workspaces, incubators, and accelerators.
In fact, 30 new startup development organizations have sprung up all over the city since 2016.
These programs help spur innovation by driving collaborations between founders, investors, academics, corporates and other talent.
One such project, The Ion, which is the highly anticipated 288,000 square foot Midtown innovation space being developed by Rice, is set to open later this quarter.
It will serve as an innovation hub centered between downtown Houston and the Texas Medical Center.
I could name so many others - the Downtown Launchpad, the East End Maker Hub, The Cannon. Each has its own character and focus, playing critical roles in accelerating the growth of our tech ecosystem.
As we grow Houston's tech companies and attract organizations from the coasts, the strength of our academic institutions is also critical.
I am pleased to report they are rising to the challenge.
Just a few examples:
The University of Houston has launched a data science institute powered by Hewlett Packard Enterprise, known as HPE, that is already changing the way companies harness and leverage data.
UH has also proposed a new carbon management center which, alongside the Carbon Hub at Rice University, is set to position Houston as the leader in carbon capture, use, and storage.
Rice was the recent recipient of a $100 million gift from the Welch Foundation to launch the Welch Institute for Advanced Materials, instantly becoming the largest of its kind in North America.
Rice and UH are also home to the top entrepreneurship programs in the country.
These schools top the lists for preparing entrepreneurs for success among public and private universities.
These are the types of visionary projects that move Houston forward.
We've got momentum, but we still need to double down with work to do. I'd like to focus today on three of those pillars of Houston's economy and how we drive success moving forward: energy, life sciences, and aerospace.
On the first: energy, and Bobby Tudor has spoken about this extensively, it is essential that we position Houston as leader of the global energy transition to a lower carbon world.
Last summer, the Partnership was proud to help recruit Greentown Labs to Houston. Greentown is Boston-based and is North America’s largest cleantech startup incubator. They are locating right across the street from The Ion in the Midtown Innovation District and will house 50 of the most exciting clean energy technology companies in the country.
When selecting Houston as their first expansion outside of Boston, Greentown Labs affirmed our belief that no other city but the Energy Capital of the World is as well positioned to lead the transition.
Earlier, I mentioned the work that Rice and UH are doing to advance energy innovation, but of course, Houston's corporate community is also in the game.
From the super majors to the service firms and the increasing presence of renewable companies, Houston is at the forefront of driving the Energy 2.0 sector.
I agree with the folks at Greentown Labs: there is no city on Earth that is better equipped with the talent, know-how, and can-do spirit to transform the way we power the world, than Houston, Texas.
Another industry sector that is driving change is life sciences and health care.
Largely built around the Texas Medical Center, which is the largest medical city in the world, Houston has made tremendous strides to leverage its strengths as a clinical and research hub to drive commercial success.
We've long talked about the Texas Medical Center as the largest, focusing on how many institutions we have and how many patients visit each year. And that is right and good.
As this pandemic has shown, the incredible research and initiatives, like the human genome project at Baylor College of Medicine, have changed the world and were the foundation from which companies like Pfizer and Moderna built the COVID vaccines.
All too often, however, the research born here in Houston is being commercialized on the coasts.
We have to capture that back here and the Texas Medical Center is positioning Houston for that work.
The TMC Innovation Institute was founded seven years ago, and since then has housed hundreds of life science companies focused on commercial success.
As TMC’s leader Bill McKeon shared last month at the State of the Texas Medical Center event, the next great step forward for Houston is the development of the 37-acre research commercialization campus called TMC3.
TMC3 is the largest life sciences project in the world. The idea is to bring the academic research from MD Anderson, UT Health Science Center, and Texas A&M together alongside top life science companies to collaborate and drive commercial success.
Success to the tune of a $5.4 billion dollar anticipated economic impact per year, creating 26,000 new jobs. The first phase of TMC3 will break ground next month and come online in 2023.
What's special about TMC3 is that it will create collaboration and innovation at scale. It will be a catalyst that will advance Houston's position as the Third Coast for Life Sciences.
And now shifting briefly to commercial aerospace.
Houston has long-been known as Space City, USA. As the home of human space flight, we put a human on the Moon and today, we are home to mission control of the International Space Station.
Houston is already home to a rich talent pool of nearly 23,000 aerospace manufacturing professionals and more than 500 aerospace and aviation companies and institutions, but the potential is so much greater.
The space race is shifting to a commercially funded and operated industry, and it is critical that Houston maintains our leadership position.
With the development of the Houston Spaceport at Ellington Airport and the vision of local leaders, the NASA Johnson Space Center and private industry, we are using Houston's advantages to capture our piece of what is projected to be a trillion-dollar industry.
While the spaceport seemed like an ambitious dream just a couple of years ago, that ambition paid off when Axiom Space, a homegrown Houston company recently announced it would build the world's first commercial space station at the Houston Spaceport.
The company will create 1,000 new jobs to support the station's development and construction along with private astronaut training.
This is a game-changing project for Houston as we position our region as one of the country's leading tech hubs. It is the type of catalytic project that will drive meaningful growth of the commercial aerospace sector in Houston.
So, all of this is exciting work, and we have true momentum.
But to build a strong, diverse, 21st century economy, Houston must drive a technological renaissance.
What does this really mean? I suggest we need to look at four areas:
First, we must look inside ourselves, at each of our companies. What value do we place on innovation?
Are we committed to innovation or are we simply trying to maintain what we have today?
We must be committed to inspiring, cultivating and rewarding technological innovation. How is your company partnering with start-ups, higher education institutions and other stakeholders to drive innovation?
Second, we must use Houston's global diversity as an innovation driver. We have something that most other cities in the world do not: we are one of the youngest, fastest growing, and most diverse populations anywhere.
I'll spend a few moments here.
When HPE announced last month that it was uprooting its global headquarters from the Bay Area and moving it to Houston, their CEO Antonio Neri said this:
"Houston is an attractive market for us to recruit and retain talent, and a great place to do business. The most diverse city in America and the fourth largest, Houston provides the opportunity over time to draw more diverse talent into our ranks - a key priority for HPE as we work to be unconditionally inclusive."
Wow! What a great endorsement for Houston!
We know there are hundreds of tech companies in the Valley, and up and down the West and East coasts that are striving to build global diversity within their companies.
There is no better place than Houston to do this!
Third, we need to think about how we are empowering the next generation of innovators and ensuring that all Houstonians have access to that possibility.
How are we helping our local institutions of higher education to produce the talent needed to drive a technology renaissance?
What role are our community colleges doing to prepare Houstonians for the high-paying skilled careers of tomorrow?
Through the Partnership’s HUB (Higher Ed United with Business) and UpSkill Houston initiatives are two examples of how the Partnership is working to facilitate the development of real talent pipelines at scale for Houston.
I just told you about all of the amazing things that are happening here in Houston, and coupled with a high quality of life and a low cost of living, Houston has a lot going for it!
But the Partnership recently did some perception research about Houston, comparing it to other top metros and it wouldn't surprise you that we land in the middle of the pack.
So finally, we must tell Houston's story about our momentum and what an amazing place it is to live and work.
Attracting the best and brightest companies and talent is key. Success will create more success. Those metros and companies that are seen as innovative will attract top talent, and ultimately succeed.
We are modern, sophisticated, and at our core, an incredibly global city. Global in a way that sets us apart from most U.S. metros.
So, as we embark on this work to drive Houston's technology renaissance, we must ensure perceptions of Houston are aligned with reality.
Each of us engages with folks outside of Houston on a regular basis. They might be customers, vendors or colleagues in other cities. We must each be committed to selling Houston. I think each of us has to own this.
Houstonians oftentimes lead with an apology about the heat or the mosquitos. That's not winning!
All of us must broadcast Houston's current story.
It's the story of a successful, vibrant, global metro.
And that's how we talk about Houston.
We have so much going for us, it's time to tell our story!
So, to conclude, we business leaders and concerned citizens are the potential catalysts for change in our community.
Harriet Tubman once said -
"every great dream begins with a dreamer. Always remember, you have within you the strength, the patience, and the passion to reach for the stars to change the world."
Houston's brightest days are right in front of us. We are positioned to continue to be a great global city.
To drive a technological renaissance.
That starts with each of us through the work we do in our companies and the work we do here at the Partnership to advance Houston as a great global city.
We must be focused. We must be intentional.
Houston is well positioned to lead.
Together we can make it happen.
Thank you very much.
January 26, 2021
Greater Houston Partnership Annual Meeting
Chair, Greater Houston Partnership
Houston Managing Partner for Deloitte
Chairman, Tudor, Pickering & Holt & Co.