Silicon Valley is tech Valhalla as far as most Americans are concerned, but as far as our biggest trading partners are concerned it plays second fiddle. The TechAmerica Foundation’s 2014 report has Texas as America’s number one tech export state, beating out California for the first time. The Lone Star state has seen a 7.3 percent increase in tech exports while California’s have dipped 2.8 percent, putting Texas at $45.1 billion in 2012. California is still head honcho as far as design goes, but the reason for Texas’s export rise at California’s expense can be found in its manufacturing sector. The Dallas Morning News reports:
“Texas has done a very good job at making themselves an attractive location for manufacturing,” [Matthew Kazmierczak, vice president of TechAmerica] said. He noted the dynamic isn’t just about interstate competition; Texas is also competitive with other countries that have traditionally attracted manufacturing.Gov. Rick Perry touts Texas’ business-friendly approach to regulations and taxes, and its relatively low cost of living, in trying to lure companies from California and other states, for which he has taken some flack.
As the report shows, the states with the biggest dollar-increase in tech exports are Texas, New Mexico, Tennessee and South Carolina, with California suffering the biggest dip in tech exports at $1.3 billion from 2011–12.As Texas’s leapfrog of California shows, labor and manufacturing costs have to be low enough for a state to stay competitive. Rising manufacturing costs in California hand business-friendly Texas an easy win as far as factory jobs go. Despite creating the most vibrant tech sector on the planet, California’s laws and regulatory system favor skilled, well-educated programmers at the expense of people who could desperately use the manufacturing jobs that stem from their industry. In other words, California is exporting (to states like Texas) the manufacturing jobs its own tech sector is creating. At this point, the biggest thing blue wonks and officials can do to help blue-collar workers is to get out of the way.