Texas is consistently one of the top three US states for inward foreign direct investment (FDI), depending on the data source and year. By capital investment, Texas had the highest level of inward investment of any state or region in North America in 2019, according to fDi Intelligence’s 2020 annual report. The state received $19.1bn of FDI, representing a 19% share of total inward investment into the US and Canada for 2019.
While Texas ranked first by capital investment the state was surpassed by California and New York in terms of greenfield FDI project numbers. The report found Texas had 175 projects in 2019, a 35% increase on project numbers for 2018. This growth between 2018 and 2019 may be explained in part by the rise of the energy and environmental technology sectors, according to the report.
Texas makes its mark in renewable energy FDI
Although the state has historically attracted FDI into the oil and gas sector, investment in wind and solar technologies is growing. According to fDi Intelligence, Texas was the leading US recipient of FDI in the renewable energy sector in 2019, attracting 21 projects, and this rises to 30 projects if counting those receiving investment from out-of-state US companies. If it were a country, Texas would be the fifth-largest recipient of greenfield renewable energy projects in 2019, according to fDi Markets.
Federal subsidies for wind and solar nationwide totalled $71.2bn, compared with $25bn for oil and gas, between 2010 and 2019, according to the Texas Public Policy Foundation, signalling a concerted effort by the state government to encourage the shift in investment towards renewable energy.
Other recent foreign investments into Texas include telecommunications company Ericsson’s announcement in 2019 that it will invest $64m to transform an existing 28,000m2 facility in Lewisville into a manufacturing plant for 5G equipment, creating 400 full-time jobs. In September 2019, Toyota announced a $391m investment to upgrade its San Antonio truck assembly plant. Once complete, the plant’s total investment will exceed $3bn.