Texas Council Will Address State Competitiveness. Governor Urges Pension Fund to Invest in Emerging Tech Companies

Starting in January, a new advisory council within the Texas Governor’s Office will begin work on a long-term strategy to bolster the state’s economic competitiveness. The Competitiveness Council will be charged with designing an overall framework for cooperation between public and private organizations involved in economic development. Gov. Rick Perry will appoint the group’s members by the end of the year.

The governor made the announcement during his keynote address at the Texas Lyceum’s 2006 Public Conference in San Antonio earlier this month. Gov. Perry told the audience of state economic development leaders that the new state strategy devised by the council would be a logical extension of other recent Texas TBED initiatives, such as the Texas Enterprise Fund and the Emerging Technology Fund.

In another keynote address at the Lyceum Conference, Dr. Michael Porter of Harvard Business School highlighted the need for a comprehensive competitiveness strategy to address the challenges faced by the Texas economy. Despite the high number of patents generated by its institutions of higher education and the success of some clusters, such as the oil industry in Houston, Texas has been underperforming in areas such as patents per employee and average wage. Porter recommended targeting specific clusters for development in Texas’s metro areas and provided examples of advisory bodies in other states, such as South Carolina and Massachusetts, which have been formed to oversee cluster-based competitiveness strategies and initiatives.

Though the size and specific membership has not been announced, the council is expected to include industry leaders, university faculty and administration, state regulatory officials, economic development leaders, and experts on K-12 education. The group’s strategy is expected sometime next year.

Texas also is considering expanding its public venture capital investments. According to the Austin-American Statesman, Gov. Perry is asking the state’s Teacher Retirement System (TRS) pension fund to invest up to $600 million in companies that receive money from the Emerging Technology Fund (ETF). The $200 million ETF invests exclusively in in-state companies that commercialize new technologies in emerging industries. If TRS agrees to reserve a portion of its investments for ETF awardees, Gov. Perry plans to make similar requests of other state investments funds.

For more information about Gov. Perry’s TBED initiatives, visit http://www.governor.state.tx.us.

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