Texas was named the second best state for business by Forbes, and Oxford Economics predicted Houston's economic growth to be more significant over the next few years than most other major metros. Getty Images

Houston and the rest of Texas received two early Christmas presents signaling that their economies continue to percolate.

In a report released December 23, economic forecasting and analysis firm Oxford Economics predicted Houston and Dallas-Fort Worth will enjoy a greater share of economic growth through 2023 than any other mega-metro area in the U.S. except San Francisco.

Meanwhile, Forbes magazine declared on December 19 that Texas is the second best state for business, behind only North Carolina. Texas previously sat in the No. 3 spot on the Forbes list, preceded by North Carolina and Utah.

Through 2023, Oxford Economics forecasts average compound GDP growth of 2.4 percent in Houston and Dallas-Fort Worth. Among the country's 10 biggest metro areas, only the projection for San Francisco is higher (2.7 percent).

For Houston, the 2.4 percent figure would be an improvement over recent economic performance. From 2014 to 2018, the region's GDP growth rate was 1 percent, while it was 1.5 percent for 2015-19. In the 2020-21 timeframe, the growth rate for Houston is expected to be 1.9 percent.

In a recent forecast, the Greater Houston Partnership envisions the Houston area adding 42,300 jobs in 2020, mostly outside the energy sector. Among the region's top-performing sectors in 2020 will be healthcare, government, food services, and construction, the partnership says. Meanwhile, the energy, retail, and information sectors are expected to shrink.

In November, Robert Gilmer of the University of Houston's Institute for Regional Forecasting explained that by the end of 2022, job losses in the oil industry should have a limited effect on the region's economy. Still, he anticipates Houston's job growth through 2024 will be "moderate and just below trend."

In forecasting strong economic growth for Houston and DFW, Oxford Economics says the "industrial structures" of the two regions "are not exceptional, but low costs and low regulation mean that the industries that they do have grow faster than elsewhere."

"San Francisco's very high costs are creating affordability problems and rising inequalities that may eventually undermine its model," Oxford Economics adds. "Competitive advantages never last forever. The Sunbelt cities [including Houston and DFW] may yet give it a run for its money."

Houston's and DFW's competitive advantages mesh with those of the entire state. Texas' high points include lower taxes, lower labor expenses, lower cost of living, and low levels of regulation, Oxford Economics says.

As noted by Forbes, Moody's Analytics predicts Texas businesses will add close to 1 million new jobs by 2023, which would be the third highest average annual job growth rate among the states. Meanwhile, the share of Texans who launched businesses last year was the fourth highest in the country, according to Kauffman Foundation data cited by Forbes. And just three states — California, New York and Washington — saw more venture capital flow into them in 2018 and 2019 than Texas did, according to PwC.

Texas earned these rankings on the Forbes list:

  • No. 1 state for growth prospects
  • No. 1 state for business costs
  • No. 4 state for economic climate
  • No. 10 state for labor supply
  • No. 15 state for quality of life
  • No. 21 state for regulatory environment
In his 2019 State of the State address, Gov. Greg Abbott praised Texas as "the most powerful state in America," thanks in part to healthy job growth, low unemployment, and rising wages. "Texas is the premier economic destination in the United States," he said.
Texas is listed as the third-most vulnerable state when it comes to robots replacing the workforce in manufacturing. Houston houses a third of the manufacturing jobs in the state. Thossaphol Somsri/Getty Images

Houston jobs could be hit hard by the rise of robots, one study finds

Automation nation

If a new forecast comes true, Houston's manufacturing sector could take an especially hard hit from the upturn in the use of robots.

In a new report, Oxford Economics, a forecasting and analysis firm based in the United Kingdom, ranks Texas as the third most vulnerable state when it comes to human workers in manufacturing being replaced by robotic labor. The report gives no estimate of how many manufacturing jobs Texas might lose to robots, but around the world, robots could boot 20 million jobs by 2030.

About one-third of Texas' manufacturers operate in the Houston metro area, meaning the robot revolution carries significant weight for the regional economy.

In 2017, manufacturing accounted for $82.6 billion, or nearly 17 percent, of the Houston area's economic output, the U.S. Bureau of Economic Analysis says. Manufacturing employment in the region averaged 219,160 jobs in 2017, with total wages of nearly $4.8 billion.

Among the top manufacturing segments in the region are fabricated metals (22 percent of all manufacturing jobs), machinery (19 percent) and chemicals (17.5 percent), according to the Greater Houston Partnership. Between 2012 and 2017, manufacturing employment in the Houston area slipped by 9.8 percent, going from 243,011 workers to 219,160 workers.

However, a recent report from the Economic Innovation Group shows Harris County netted more manufacturing jobs (11,592) from December 2016 to December 2018 than any other county in the U.S.

According to the National Association of Manufacturers, the manufacturing sector in Texas created more than $226 billion in economic output in 2017. Last year, about 880,900 people held manufacturing jobs in Texas; that's more than 7 percent of the statewide workforce.

In declaring that Texas sits among the states most susceptible to job losses due to robotics, Oxford Economics took into account factors such as:

  • Dependence on manufacturing jobs.
  • Current use of robots in manufacturing.
  • Productivity of the manufacturing workforce.

Based on those criteria, Texas received a robot vulnerability score of 0.50. The top two states, Oregon and Louisiana, each got a score of 0.58, with the higher number meaning greater vulnerability.

The report cites three reasons for the ascent of robots in manufacturing:

  • Robots are becoming cheaper than humans.
  • Robots are becoming more sophisticated.
  • Demand for manufactured goods is rising.

"The rise of the robots will boost productivity and economic growth. It will lead, too, to the creation of new jobs in yet-to-exist industries, in a process of 'creative destruction,'" according to the Oxford Economics report. "But existing business models across many sectors will be seriously disrupted. And tens of millions of existing jobs will be lost, with human workers displaced by robots at an increasing rate as robots become steadily more sophisticated."

Tony Bennett, president and CEO of the Texas Association of Manufacturers, says the Oxford Economics report isn't all gloom and doom.

"Robotics and mechanization in our advanced manufacturing industries will continue to displace some general-labor jobs. However, this change is also ushering in a new set of higher-skilled jobs that are being created to engineer, build, and service these sophisticated machines," Bennett says. "The state of Texas must continue striving to increase educational opportunities in engineering, math, science, and career and technical programs to meet the complex manufacturing processes of the future."

Houston Community College's Advanced Manufacturing Center for Excellence is among the organizations in the Houston area that are preparing workers for jobs in robotics and other high-demand, tech-driven aspects of manufacturing.

"Innovation is Houston's bedrock," Houston Mayor Sylvester Turner said in 2017. "The city would have never thrived without the innovations it took to build the Ship Channel and the innovating that goes on every day in the energy industry, at the Texas Medical Center, at the Johnson Space Center and in the manufacturing sector. Now, Houston is poised to take its place at the forefront of the American future in technology."

Earlier this year, another study found a similarly daunting result. Almost half of Houston's workplace tasks are susceptible to automation, according to a new report from the Brookings Institution's Metropolitan Policy Program. Of 100 metros analyzed, Houston ranks 31st among the country's 100 biggest metros, with 46.3 percent of work tasks susceptible to automation.

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10 promising Houston startups that made headlines in 2025

year in review

Editor's note: As we reflect on 2025, we're looking back at the stories and startups that made waves in Houston's innovation scene. These 10 startups reached memorable milestones, won prestigious awards, found creative solutions, and disrupted their industries.

Persona AI: Houston humanoid robotics startup inks new deal to deploy its rugged robots

A concept design rendering of Persona AI's humanoid robot. The company is expanding at the Ion and plans to deliver prototype humanoids by the end of 2026 for complex shipyard welding tasks. Rendering courtesy Persona AI.

Persona AI is building modularized humanoid robots that aim to deliver continuous, round-the-clock productivity and skilled labor for "dull, dirty, dangerous, and declining" jobs. The company was founded by Houston entrepreneur Nicolaus Radford, who serves as CEO, along with CTO Jerry Pratt and COO Jide Akinyode. It raised $42 million in pre-seed funding this year and is developing its prototype of a robot-welder for Hyundai's shipbuilding division, which it plans to unveil in 2026. The company won in the Deep Tech Business category at this year's Houston Innovation Awards. Continue reading.

Rheom Materials: Houston startup unveils its innovative leather alternative at the rodeo

Rheom Materials presented its bio-based alternative, Shorai, a 93 percent bio-based leather, at the rodeo and plans to scale it up this year. Photos courtesy Rheom Materials

Rheom Materials presented its scalable, bio-based alternative known as Shorai, a 93 percent bio-based leather, through two custom, western-inspired outfits that showed off cowboy flair through a sustainable lens at the Houston Livestock Show and Rodeo earlier this year.

Next up, the company said it aimed to scale production of Shorai, the Japanese word for “future,” at a competitive price point, while also reducing its carbon footprint by 80 percent when compared to synthetic leather. The company also made a large-scale production partnership with a thermoplastic extrusion and lamination company, Bixby International, this year. Continue reading.

Koda Health: Houston digital health platform Koda closes $7 million funding round

Tatiana Fofanova and Dr. Desh Mohan, founders of Koda Health, which recently closed a $7 million series A. Photo courtesy Koda Health.

Houston-based digital advance care planning company Koda Health closed an oversubscribed $7 million series A funding round this year. The round, led by Evidenced, with participation from Mudita Venture Partners, Techstars and Texas Medical Center, will allow the company to scale operations and expand engineering, clinical strategy and customer success. Koda Health, saw major growth this year by integrating its end-of-life care planning platform with Dallas-based Guidehealth in April and with Epic Systems in July. The company won the Health Tech Business category at the 2025 Houston Innovation Awards. Continue reading.

Veloci Running: Student-led startup runs away with prestigious prize at Rice competition

The H. Albert Napier Rice Launch Challenge awarded $100,000 in equity-free funding to student-led startups, including first-place finisher Veloci Running. Photo courtesy of Rice University.

Veloci Running took home the first-place prize and $50,000 at the annual Liu Idea Lab for Innovation and Entrepreneurship's H. Albert Napier Rice Launch Challenge. The company was founded by Tyler Strothman, a former track and field athlete and senior at Rice, majoring in sport management. Inspired by the foot pain he suffered due to the narrow toe boxes in his running shoes, Strothman decided to create a naturally shaped shoe designed to relieve lower leg tightness and absorb impact. Additional prize winners included SteerBio, Kinnections, Labshare and several others. Continue reading.

Square Robot Inc.: Houston robotics co. unveils new robot that can handle extreme temperatures

The new robot eliminates the need for humans to enter dangerous and toxic environments. Photo courtesy of Square Robot

Houston- and Boston-based Square Robot Inc.'s newest tank inspection robot became commercially available and certified to operate at extreme temperatures this fall. The new robot, known as the SR-3HT, can operate from 14°F to 131°F, representing a broader temperature range than previous models in the company's portfolio. According to the company, its previous temperature range reached 32°F to 104°F. The company also announced a partnership with downstream and midstream energy giant Marathon Petroleum Corp. (NYSE: MPC) last month. Continue reading.

Bot Auto: Houston autonomous trucking co. completes first test run without human intervention

Bot Auto completed its first test run without human assistance in Houston. Photo courtesy Bot Auto.

Houston-based Bot Auto, an autonomous trucking company, completed its first test run without human assistance earlier this year. Bot Auto conducted the test in Houston. The transportation-as-a-service startup added that this milestone “serves as a validation benchmark, demonstrating the maturity and safety of Bot Auto’s autonomy stack and test protocols.” This summer, founder Xiaodi Hou told the Front Lines podcast that Bot Auto had raised more than $45 million. Continue reading.

Nomad: Screen-free hiking app developed in Houston earns 'Best of the Best' award

NOMAD aims to help hikers stay in the moment while still utilizing technology. Photo courtesy UH.

An AI-powered, screen-free hiking system developed by Varshini Chouthri, a recent industrial design graduate from the University of Houston, received this year's Red Dot’s “Best of the Best” award, which recognizes the top innovative designs around the world. Known as NOMAD, the system aims to help users stay in the moment while still utilizing technology. Continue reading.

Little Place Labs, Helix Earth, Tempest Droneworx: Houston startups win big at SXSW 2025 pitch competition

Two Houston startups won the SXSW Pitch showcase in their respective categories. Photo via Getty Images

Houston had a strong showing at the SXSW Pitch showcase in Austin this year, with several local startups claiming top prizes in their respective categories.

Little Place Labs, a Houston space data startup, won the Security, GovTech & Space competition. Clean-tech company Helix Earth, which spun out of Rice University and was incubated at Greentown Labs, won in the Smart Cities, Transportation & Sustainability contest. Tempest Droneworx, a Houston-based company that provides real-time intelligence collected through drones, robots and sensors, won the Best Speed Pitch award. Continue reading.

6 Houstonians named to prestigious national group of inventors

top honor

Six Houston scientists and innovation leaders have been named to the National Academy of Inventors’ newest class of fellows. The award is the highest professional distinction awarded to academic inventors by the NAI.

The 2025 class is made up of 169 fellows who hold more than 5,300 U.S. patents, according to the organization. The group hails from 127 institutions across 40 U.S. states.

The Houston-based inventors are leading fields from AI to chemistry to cancer research.

“NAI Fellows are a driving force within the innovation ecosystem, and their contributions across scientific disciplines are shaping the future of our world,” Paul R. Sanberg, president of the National Academy of Inventors, said in a news release. “We are thrilled to welcome this year’s class of Fellows to the Academy. They are truly an impressive cohort, and we look forward to honoring them at our 15th Annual Conference in Los Angeles next year.”

The 2025 list of Houston-based fellows includes:

  • Vineet Gupta, Vice President for Innovation, Technology Development and Transfer at the University of Texas Medical Branch
  • Eva Harth, chemistry professor at the University of Houston
  • Dr. Raghu Kalluri, Professor and Chairman of the Department of Cancer Biology at The University of Texas MD Anderson Cancer Center
  • Sanjoy Paul, Executive Director of Rice Nexus and AI Houston and Associate Vice President for Technology Development at Rice University
  • Dr. Jochen Reiser, President of the University of Texas Medical Branch and CEO of UTMB Health System
  • Todd Rosengart, Professor and Chair of the Department of Surgery at Baylor College of Medicine

"It is a great honor to be named a Fellow of the NAI. It is deeply gratifying to know that the work my students and I do — the daily push, often in small steps — is seen and recognized," Harth added in a news release from UH.

The 2025 fellows will be honored and presented with their medals by a senior official of the United States Patent and Trademark Office at the NAI Annual Conference this summer in Los Angeles.