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Small Business Month: The Impact of Small Business on Houston's Economy

Published May 04, 2021 by A.J. Mistretta

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Small business is big business in Houston. As the nation commemorates Small Business Month in May, the Partnership examined the latest figures on small business in Houston and the important role these organizations play in our region’s broader economy. 

Eighty-two percent of the firms operating in the Houston metro area have fewer than 20 employees. Together, these businesses employ just under 400,000 workers, or about 14% of the regional workforce, according to the U.S. Census Bureau’s Business Dynamics Statistics, 2018. Nearly 97% of businesses in the region have fewer than 500 employees—the standard to be considered a small business—and these collectively employ 44% of the region’s workforce, or 1.2 million employees. 

Census Bureau data shows that there are 663,800 “non-employee businesses” in the Houston region, which are generally sole proprietorships such as consultants, freelancers and the self-employed. What’s more, nearly 35% of Houston-area small businesses with 50 or fewer employees are minority-owned, and the diverse region ranks fifth in the nation for minority entrepreneurship, according to personal finance service Self Financial

So which Houston industries are most likely to see a high percentage of small businesses? Real estate is number one with roughly 88% of firms having fewer than 10 employees, followed by professional services at 84% and finance and insurance at 81%. Nationwide, construction, information and real estate have been the fastest growing small business sectors over the last decade. The same pattern generally holds true for Houston. 

The creation of new small businesses in this region is likely to keep growing. A new report released this spring ranked Houston among the nation’s top 10 metros for startup formation. The report from real estate investment group Roofstock was based on Census data that looked at startups as a percentage of overall businesses in the region. Houston logs more than 9,200 new startups annually, according to the report. Last year, the region's startups attracted a record $753 million in venture capital funding, up from $702 million in 2019. 

Today, there are more than 5 million U.S. businesses with fewer than 500 employees and 3.8 million with fewer than 10 employees, according to the Census Bureau. Companies with fewer than 500 employees account for about 59 million jobs, or nearly half of the national workforce (46%), and generate $13.7 trillion in combined annual revenue, about a third of all U.S. business revenue. 

Learn more about the Partnership’s Small Biz Matters business resource group and get information about how your organization can become a member today
 

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Chao Family Receives the Partnership's 2023 McNair Civic Leadership Award

2/2/23
HOUSTON (February 2, 2023) –The Greater Houston Partnership presented the 2023 Robert C. McNair Civic Leadership Award to philanthropic leaders the Chao family at the organization’s Annual Meeting on Thursday.  This is the first time that the award was presented not to an individual but to a family whose members exemplify the great power that lies in civic and philanthropic leadership—and have built a legacy that transcends borders.  Ting Tsung Chao, known to many as "T.T.," had a revered 60-year career in which he founded numerous successful petrochemical and materials companies across the globe—including Houston-based Westlake – formerly known as Westlake Chemical Corporation.  Born to humble beginnings in Suzhou, China, T.T. found his entrepreneurial penchant after he moved his family to Taiwan in the 1940s. Less than a decade later, T.T. co-founded the country’s first PVC business and would go on to form the China General Plastics Corporation Group, which at the time was among the top 10 companies in Taiwan and number two in the petrochemical industry. While growing his business – T.T. and his wife, Wei Fong, had three children – Dorothy, James, and Albert– all of whom play a significant part in this family’s inspiring story and are paving paths of their own.  In the mid-80s, T.T.’s business acumen pointed him towards Houston. T.T. and his sons, Albert and James, founded Westlake Chemical Corporation, which started with a modest plant in neighboring Louisiana.  Today, listed on the New York Stock Exchange, Westlake operates 100 sites globally with approximately 16,000 employees, maintains a position on the Fortune 500 list and is approaching its fortieth anniversary.  “Known for both volunteerism and generous gifts that have changed the face of our city, the Chao’s show us that generational impact is a rewarding result of long-term community commitment,” said Partnership 2020 Chair Bobby Tudor in presenting the award to the Chao family.  Today, T.T.’s children are carrying on his legacy in notable fashion through continued business leadership with Westlake Corporation and philanthropy through the Ting Tsung and Wei Fong Chao Foundation, with a particular emphasis on supporting organizations working to expand health care and education.  Notable gifts from the Foundation include the establishment of the Chao Center for Asian Studies at Rice University, in honor of their parents, T.T. and Wei Fong Chao, to highlight the importance of Asian studies at American universities.  James, the eldest son, is Chairman of Westlake’s Board of Directors. Dorothy serves as a Director of Westlake’s Board, a position she’s held for twenty years. And Albert serves as Westlake’s President and Chief Executive Officer. Under his and James’ leadership, Westlake continues to grow and innovate, constantly evolving to adapt to an ever-changing business climate.  Albert, and with his wife Anne, are steadfast supporters of many of Houston’s cultural and civic organizations.  “As first-generation immigrants to receive this esteemed award, we see this as a reflection of Houston’s rich multicultural society. And it provides encouragement to other business and civic leaders to do their part to contribute to the benefit and welfare of the greater community of Houston,” said Albert Chao in accepting the award. “Over the last 30 years, it has been our pleasure and honor to serve on the boards of various Houston organizations, which have been our partners in how we have tried to give back to the city we have made our home.”  Established in 2020, the McNair Award is presented by the Greater Houston Partnership annually business leaders who have made an outsized impact on our community — through civic and philanthropic leadership – honoring the lifelong legacy imparted by the award’s namesake, Bob McNair.  ###         Greater Houston Partnership  The Greater Houston Partnership works to make Houston one of the best places to live, work and build a business. As the economic development organization for the region, the Partnership champions growth across 12 counties by bringing together business and civic-minded leaders who are dedicated to the area’s long-term success. Representing more than 950 member organizations and approximately one-fifth of the region’s workforce, the Partnership is the place companies come together to make an impact. Learn more at Houston.org. CONTACT: Brina Morales                                                 Senior Manager, Media Relations     bmorales@houston.org           (c) 832-287-5089             A.J. Mistretta Vice President, Communications amistretta@houston.org (c) 504-450-3516          
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Partnership Chair Discusses How Business Community Can Act as a Bridge in Polarizing World

2/2/23
Greater Houston Partnership 2023 Board Chair Dr. Marc L. Boom outlined today how the business community can play a positive role in finding compromise solutions in today’s increasingly polarizing environment. Boom, who serves as President and CEO of Houston Methodist, made the comments at the Partnership’s 2023 annual meeting where leaders also summarized the organization’s key accomplishments in 2022 and presented an award to one of the city’s notable philanthropic families.  Boom said Houston is a remarkable city with a “can-do” attitude that’s as close to a meritocracy as anywhere else on the planet. He said he’s pleased with the region’s performance and excited about the many significant projects underway, from the Ion District and TMC Helix Park to new global headquarters and the expansion of the Houston Ship Channel.  However, he said he’s concerned about the culture of our community and the country as a whole. “When we get that culture right, we thrive. When we don’t get it right, we flounder,” Boom said. “We’ve created a perpetual ‘us versus them’ narrative and we are sorting ourselves out politically, religiously, geographically, etc. At best, we’ve created gridlock and an inability to create a better environment for our people. At worst, we are tearing away at the very fabric of what has made this country great.”  Boom offered that the best decisions happen when well-intentioned people with differing opinions work together to see all sides of an issue, respect one another, and listen to one another. “In contrast to what we see with most of our political discourse, the right answer is rarely an ‘or,’ it is an ‘and.’” He said we must work to create environments where it is ok to disagree. “In fact, an environment where it expected that people will sometimes respectfully disagree, and they will use those disagreements to make better decisions.”  Laying the groundwork for how he hopes to serve as Chair this year, Boom said the Partnership “is at its best when it helps mold consensus, when Houston business leaders commit to rolling up their sleeves and pursuing the “AND” as we tackle the issues that may impede Houston’s long-term growth.”  Houston made significant progress in 2022 in its economic development efforts, a priority for outgoing Partnership Chair Thad Hill, President and CEO of Calpine Corp. In his speech, Hill touted that the region notched more than 200 economic development wins last year. The Partnership convened more than 200 business leaders across 12 different economic development committees and recruitment initiatives last year, he said. “The economic development pipeline of opportunities has never looked so promising, and we’ll need your support to pull them across the finish line,” he told the Partnership members gathered for the annual meeting.  Hill also took a moment to thank Partnership President and CEO Bob Harvey for his decade of service to the organization. Harvey announced in January that he would step down from his position at the end of 2023. “Bob has elevated the profile and strength of the organization and focused the business community on initiatives that continue to move Houston forward,” Hill said.  In his remarks, Harvey said he’s grateful to have had the opportunity to work alongside so many of Houston’s great business and civic leaders. “I am particularly proud of our ability to supplement our traditional work in public policy, economic development, and member engagement with longer-term initiatives targeting Houston’s biggest issues like education and workforce, our innovation ecosystem, racial equity, and, most recently, the energy transition,” Harvey said. “When we look back 15-20 years from now, we will see the energy transition initiative as the most important thing we worked on together.”  The Partnership provided an update on its Houston Next strategic plan designed to advance Houston’s position as a great global city. The plan focuses on three core areas: building a strong, diverse 21st century economy; offering a great quality of life; and ensuring opportunity for all. In 2020, the Partnership added that a lens of racial equity should permeate its work to strengthen Houston as a diverse, inclusive and equitable city.  Key 2022 highlights include:  Spearheaded 25 successful economic development projects, accounting for over $1 billion in capital expenditure and more than 4,200 new jobs for the region.  Established sector-specific working groups under the Houston Energy Transition Initiative to advance work in CCUS, clean hydrogen, industrial decarbonization and capital formation.  Advanced the One Houston Together initiative by hosting 10 roundtable convenings, launching the first Houston Buyer Cohort to increase minority business spending, and publishing an economic impact report on minority business enterprises.  Hosted more than 11,000 business and community leaders across 56 major events, webinars, Council meetings and other gatherings.  Welcomed 153 international delegation visits from 68 countries around the world to strengthen the region’s international ties.  See more highlights in the 2022 Annual Report.  During the meeting, Partnership 2020 Chair Bobby Tudor presented the organization’s 2023 Robert C. McNair Civic Leadership Award to the Chao family. The McNair Award is the most prestigious award bestowed by the Partnership and honors a highly successful business leader who has also made outstanding civic and philanthropic contributions. See release on the McNair award. Partnership members elected new and returning board members as well during the meeting. Individuals elected to Director Emeritus by vote of the membership include: Paul Hobby, Founding Partner, Genesis Park; Lynne Liberato, Senior Counsel, Haynes and Boone; and Jamey Rootes, Former President, Houston Texans (Posthumous).  Eric Mullins, Chairman and CEO of Lime Rock Resources, was elected Vice Chair and Chair-elect by the Partnership’s membership at the meeting. Mullins will chair the Partnership board in 2024. See list of new and returning board members.  
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