When it comes to maintaining a good ecosystem, diversity is key. Houston learned that the hard way. Photo by Tim Leviston/Getty Images

Hello Bay Area! We Houstonians are concerned about you.

We think your economy is becoming overly dependent on Silicon Valley. In 2018, the technology industry accounted for around 62 percent of all office leasing activity in San Francisco. From September 2017 to September 2018, tech companies and realty investors bought $1.43 billion worth of San Jose downtown properties, nearly three times what they spent the year before on property in the city.

Some of your biggest search, social media, and database companies are expanding their headquarters in San Jose, San Francisco, and the rest of Silicon Valley. This is causing the construction industry to become more dependent on tech. But it's not just the construction industry that is becoming attached at the hip with Silicon Valley. According to the Bay Area Council, for every one high tech job created in the U.S., four more are created in industries as varied as education, law, dentistry, retail, and food. That means a lot of jobs in the Bay Area are, and are going to be, dependent on Silicon Valley.

Meanwhile, the Bay Area's high cost of living is pushing low and middle-income people further and further away from the state to places like Colorado, New York, and Texas (thanks for that by the way). The Bay Area had the highest income disparity between those migrating into the area and those leaving it than any major metro area in the country between 2010 and 2016. An economy can't last with just high-salaried tech workers.

We here in Houston have seen what happens when a metropolitan area becomes overly dependent on its dominant industry.

The 1980s were a tough time in Houston's history due to the huge fall in oil prices. In 1986, crude oil prices fell 52 percent to about $27 a barrel in today's dollars. The majority of Houston's economy was centered around the oil business at that time. The industries that were not directly related to energy, such as restaurants, car dealerships, and real estate were in a symbiotic relationship and were in some cases catastrophically hurt. When the oil industry took a hit, the entire economy took a hit. During this time, Houstonians lost 225,000 jobs, or one in eight jobs in the city.

Many young workers in petroleum engineering, geophysics, and other energy positions were laid off, many leaving the industry altogether. Older workers retired. In the mid-2000s, when the shale drilling revolution began, the needed manpower was just not there to meet the demand and it was expensive to hire and train a new workforce.

We were able to recover. Some 175,000 Houstonians are now working in oil production, oil field services, materials, and fabricated metals, and tens of thousands more are working as suppliers and contractors. We're more ethnically and industrially diverse than we ever were before, but it took time.

What did we learn from the 1980s?

First, diversify.

While we still have a vibrant oil and gas business in Houston, we've also expanded further into our other core industries: health care, technology and space. The Bay Area is fortunate in that it has strong banking, agriculture, and tourism industries. It ought to be putting more TLC into these industries or expanding into other fields.

We learned not to keep all of our wealth in the oil and gas companies in which we work. It's far too common for Silicon Valley workers to have too much trust in the companies they work for, hoping that their stock options will propel them to riches one day. As we learned in Houston, this can lead to disastrous results. Diversify your portfolios, but be careful. Houstonians over invested in real estate in the 1980s and miscalculated the future of that industry.

Second, Houston has also learned to keep well-educated professionals trained and capable of finding support for those in between jobs. Luckily this doesn't seem to be a problem for the Bay Area. While the Greater Houston Region keeps roughly 66.1 percent of its four-year college graduates in the area, the Bay Area keeps 65.2 percent of its graduates around. So, Bay Area, never take your universities, like U.C. Berkeley and Stanford, for granted.

We know the Bay Area has seen its own troubles before. The dotcom bust of the early 2000s was devastating to the local economy. We're just especially sensitive to what happened to us in 1980s and we'd hate to see the Bay Area go through something similar again.

------

Elizabeth Biar is vice president of Strategic Public Affairs, a government elations and PR/communications firm based in Houston. Sam Felsing is a former reporter and who currently works as a senior account executive at Telegraph, a political consulting and public relations firm based in Oakland, California.

Ad Placement 300x100
Ad Placement 300x600

CultureMap Emails are Awesome

Play it back: Houston home tech startup begins 2025 with fresh funding

HOUSTON INNOVATORS PODCAST EPISODE 272

One of the dozen or so Houston startups kicking of the new year with fresh funding is SmartAC.com, a company that's designed a platform that enables contractors in the HVAC and plumbing industries to monitor, manage, and optimize their maintenance memberships through advanced sensors, AI-driven diagnostics, and proactive alerts.

Last month, the SmartAC.com raised a follow-on round with support from local investor Mercury to continue growth and expansion of the product, which has evolved on many ways since the company launched in 2020, emerging from stealth with $10 million raised in a series A. In a May 2023 interview for the Houston Innovators Podcast, Founder and CEO Josh Teekell explained how he embraced the power of a pivot.

The company's sensors can monitor all aspects of air conditioning units and report back any issues, meaning homeowners have quicker and less costly repairs. While SmartAC.com started with providing the service and tech to homeowners directly, Teekell says he's had a greater interest in working with plumbers and HVAC companies who then deploy the technology to their customers.

"It became quite evident that homeowners don't care about air conditioning really at all until their system breaks," Teekell says on the show. "The technology is really built around giving those contractors as another way to gain a customer relationship and keep it."

Revisit the podcast episode below where Teekell talks about SmartAC.com's last raise.

SmartAC.com's previous round in 2023 — a $22 million series B — was used grow its team that goes out to deploy the technology and train the contractors on the platform.

"We've been very fortunate to get some of the biggest names in Houston on our cap table," Teekell says in the May 2023 conversation. "Since we're raising a bunch of money locally, everyone understands what a pain air conditioning can be."

Houston biotech company tests hard-to-fight cancer therapeutics

fighting cancer

A Houston-based, female-founded biotech company has developed a treatment that could prove to be an effective therapy for a rare blood cancer.

Cellenkos Therapeutics has completed promising Phase 1b testing of its Treg cell therapy, CK0804, in the fight against myelofibrosis. According to a news release from the Cellenkos team, the use of its cord-blood-derived therapeutics could signal a paradigm shift for the treatment of this hard-to-fight cancer.

Cellenkos was founded by MD Anderson Cancer Center physician and professor Simrit Parmar. Her research at the hospital displayed the ability of a unique subset of T cells’ capability to home in on a patient’s bone marrow, restoring immune balance, and potentially halting disease progression.

Myelofibrosis has long been treated primarily with JAK (Janus Kinase) inhibitors, medications that help to block inflammatory enzymes. They work by suppressing the immune response to the blood cancer, but don’t slow the progression of the malady. And they’re not effective for every patient.

“There is a significant need for new therapeutic options for patients living with myelofibrosis who have suboptimal responses to approved JAK inhibitors,” Parmar says. “We are greatly encouraged by the safety profile and early signs of efficacy observed in this patient cohort and look forward to continuing our evaluation of the clinical potential of CK0804 in our planned expansion cohort.”

The expansion cohort is currently enrolling patients with myelofibrosis. What exactly are sufferers dealing with? Myelofibrosis is a chronic disease that causes bone marrow to form scar tissue. This makes it difficult for the body to produce normal blood cells, leaving patients with fatigue, spleen enlargement and night sweats.

Myelofibrosis is rare, with just 16,000 to 18,500 people affected in the United States. But for patients who don’t respond well to JAKs, the prognosis could mean a shorter span than the six-year median survival rate outlined for the disease by Cleveland Clinic.

Helping myelofibrosis patients to thrive isn’t the only goal for Cellenkos right now.

The company seeks to aid people with rare conditions, particularly inflammatory and autoimmune disorders, with the use of CK0804, but also other candidates including one known as CK0801. The latter drug has shown promising efficacy in aplastic anemia, including transfusion independence in treated patients.

The company closed its $15 million series A round led by BVCF Management, based in Shanghai, in 2021. Read more here.

Pioneering Houston biotech startup expands to Brazil for next phase

On the Move

Houston biotech company Cemvita has expanded into Brazil. The company officially established a new subsidiary in the country under the same name.

According to an announcement made earlier this month, the expansion aims to capitalize on Brazil’s progressive regulatory framework, including Brazil’s Fuel of the Future Law, which was enacted in 2024. The company said the expansion also aims to coincide with the 2025 COP30, the UN’s climate change conference, which will be hosted in Brazil in November.

Cemvita utilizes synthetic biology to transform carbon emissions into valuable bio-based chemicals.

“For decades Brazil has pioneered the bioeconomy, and now the time has come to create the future of the circular bioeconomy,” Moji Karimi, CEO of Cemvita, said in a news release. “Our vision is to combine the innovation Cemvita is known for with Brazil’s expertise and resources to create an ecosystem where waste becomes opportunity and sustainability drives growth. By joining forces with Brazilian partners, Cemvita aims to build on Brazil’s storied history in the bioeconomy while laying the groundwork for a circular and sustainable future.”

The Fuel of the Future Law mandates an increase in the biodiesel content of diesel fuel, starting from 15 percent in March and increasing to 20 percent by 2030. It also requires the adoption of Sustainable Aviation Fuel (SAF) and for domestic flights to reduce greenhouse gas emissions by 1 percent starting in 2027, growing to 10 percent reduction by 2037.

Cemvita agreed to a 20-year contract that specified it would supply up to 50 million gallons of SAF annually to United Airlines in 2023.

"This is all made possible by our innovative technology, which transforms carbon waste into value,” Marcio Da Silva, VP of Innovation, said in a news release. “Unlike traditional methods, it requires neither a large land footprint nor clean freshwater, ensuring minimal environmental impact. At the same time, it produces high-value green chemicals—such as sustainable oils and biofuels—without competing with the critical resources needed for food production."

In 2024, Cemvita became capable of generating 500 barrels per day of sustainable oil from carbon waste at its first commercial plant. As a result, Cemvita quadrupled output at its Houston plant. The company had originally planned to reach this milestone in 2029.

---

This story originally appeared on our sister site, EnergyCapitalHTX.