An Economic Champion: How Texas Became the Eighth-Largest Economy

Historically, Texas is known as a welcoming state for businesses which, over time, has transformed into one of the world’s most powerful economic engines. Today, Texas is the eighth-largest economy globally, as measured by GDP, and is a fiscal peer to some of the planet’s most influential nations. This top performing climate is not the result of short-term trends or fluctuating cycles, but a steady ascent over the past ten years. Due to a stable and supportive regulatory environment, investment, and leadership that works to reduce the costs of doing business, the Lone Star State has arisen a titan, offering economic freedom and opportunity for all Texans in the process. 

As explained by Texas Governor Greg Abbott, “Texas once again emerges as the national champion for the top business climate in America. As the eighth-largest economy in the world, Texas offers the freedom and opportunity for companies of all sizes and all industries to thrive. Coupled with the pro-growth, pro-business laws I signed this year, Texas improved the process of doing business to help them succeed in our great state. We will continue to make strategic investments and partner with job-creating businesses to ensure that Texas remains the top state in the nation to do business.” 

Texas’s rise to economic prominence is rooted in its commitment to a pro-business environment, and avoidance of barriers to starting and sustaining a business. During the 89th Legislative Session, a number of bills passed into law supporting this commitment including House Joint Resolution 1/House Bill 9 (Meyer/Bettencourt), House Bill 346 (Harris Davila/King), House Bill 2464 (Hefner/Middleton), and House Bill 5195 (Capriglione/Alvarado). These laws make Texas attractive to entrepreneurs and small business owners, by increasing the business personal property tax exemption, expediting filings for new businesses, preventing cities from imposing regulations on specific home-based businesses, and requiring state agencies to modernize their digital services to make doing business with government easier. Ultimately, by reducing barriers to entry and lowering costs for business, the time needed to start operations is reduced, companies may reinvest capital into growth, and workers retain more of their earnings. 

Equally important is Texas’s stable, and supportive regulatory environment. Businesses value certainty, and Texas has consistently emphasized a clear and consistent regulatory approach. The resulting stability reduces risk, encourages long-term investment, and allows companies to plan with confidence. Governor Greg Abbott, in keeping with this framework, signed Senate Bill 14 (King/Capriglione), known as Texas DOGE, into law. Formally named the Texas Regulatory Efficiency Office, Texas has positioned itself as a reliable partner to companies by creating this office to eliminate unnecessary regulations and reduce strains on Texans. Said Governor Abbott, “This law will slash regulations, put stricter standards on new regulations that could be costly to businesses, and put a check on the growth of the administrative state. This will make government more efficient and less costly, ensuring that Texas operates at the speed of business. I am proud of everything the Texas Senate and House were able to achieve to get this bill to my desk, which is now law.” 

Additionally, corporate investment also plays a central role in Texas’s success by driving job creation, innovation, and long-term economic growth. Most recently, Texas Instruments, a Fortune 500 company with a passion to create a better world by making electronics more affordable through semiconductors, opened a wafer fabrication facility in Sherman. Representing an investment of $40 billion, the production of this cutting-edge technology will employ thousands of Texans generating higher wages, broader tax bases, and sustained economic momentum for the Lone Star State. 

In just ten years, Texas has risen to become the eighth-largest economy in the world, a testament to state leadership’s long-term vision, disciplined policy making, and commitment to economic freedom. Through reduced costs of doing business, regulatory stability, and corporate investment, the state has created a fiscal model where businesses thrive and communities benefit. More importantly, this growth has advanced the quality of life for millions of Texans, creating high-paying jobs, supporting small businesses, and funding public infrastructure. As Texas continues to gain influence on the world stage, the greater question is not what heights we will achieve, but how many Texans’ lives will be positively impacted by that influence. 

About the Author

Calvin Pacleb is a consultant within the private equity industry and founder of The Catholic Action Network, a 501(c)(4) nonprofit focused on economic development, investment, and entrepreneurship as a pathway out of poverty. To learn more, please visit thecatholicactionnetwork.org or email cpacleb@thecatholicactionnetwork.org.