We know this intuitively and the numbers have long borne it out: a modern economy depends on places with a concentration of PST companies \u2013 professional scientific and technical services.<\/p>\n
These are roles that require a high level of training or expertise \u2014 think accounting, consulting, legal services, roles in the medical field and so on.<\/p>\n
These are the types of careers that pay better than average and as Daniel Oney would tell you, the Lone Star State is a pretty good place to find these types of jobs.<\/p>\n
Oney is research director with the Texas A&M Real Estate Center and he has a new story breaking down the trends<\/a>. He joined the Texas Standard to discuss. Listen to the interview above or read the transcript below.<\/p>\n This transcript has been edited lightly for clarity:<\/p>\n Texas Standard: You know, I think we\u2019ve heard a lot about Texas\u2019 population growth, but the idea that Texas cities could be in the same league as \u2013 at least in terms of their reputation and that sort of thing \u2013 as Boston or New York or D.C. \u2026 Is that for real?\u00a0\u00a0<\/p>\n Daniel Oney: Yes, it is for real. And it\u2019s been a long time coming.<\/p>\n So professional services firms, that\u2019s just kind of a fancy term for white-collar jobs that people know them: it\u2019s attorneys, accountants, management consultants, positions like that. And those firms do respond to household growth. You\u2019re gonna need more attorneys and accountants as your population grows.<\/p>\n But those firms are really interested in being located where there are lots of corporate headquarters, because that\u2019s their real bread and butter, is doing the sophisticated consulting work for those big firms. And Texas has been adding corporate headquarters at a rate unlike any other state.<\/p>\n Is that how you measure it, how many corporate headquarters a city has? Is that the general gauge?\u00a0<\/p>\n Well, it\u2019s something. If you\u2019re the leader of one of these firms and you\u2019re making a decision to open an office, you\u2019re certainly going to look for the types of clients that you want to serve. And so corporate headquarters is a leading indicator for someone who\u2019s in that industry.<\/p>\n So yeah, it\u2019s pretty important, but it\u2019s not the sole reason why you would open an office.<\/p>\n So tell me a little bit about the Texas cities that are winning in this regard. I can think of some metro areas that would be strong candidates.<\/p>\n That\u2019s right. So one of the things that determines the success of these professional service companies, it\u2019s the industries that are already in the city. And so if we look across Texas\u2019s big four metro areas, DFW and Houston have had a lot of corporate headquarters for a long time, but they\u2019ve had some slightly different outcomes in recent years.<\/p>\n The oil and gas industry took a big hit a decade ago, and it\u2019s basically moved sideways, where Dallas-Fort Worth has had a more diverse headquarters mix. So there\u2019s a lot more opportunities for these professional companies there. And so they\u2019ve grown much faster in Dallas-Fort Worth.<\/p>\n The other interesting story about Texas is the growth of Austin. You know, we\u2019ve long thought of Austin as a technology hub. But what\u2019s happened with the relocation of headquarters companies, a lot of them tech companies, those headquarters now need more attorneys, accountants, engineers, etc.<\/p>\n They might have hired a firm out of Dallas at one point, or Houston, but now it\u2019s worth it for those companies to open offices in Austin. And it\u2019s actually grown faster in that category than any other Texas city.<\/p>\n Well let\u2019s talk about what this means in terms of Texas\u2019 economy at that sort of practical, pragmatic level. If I want to be involved in a cutting-edge job, I think the old way of thinking, at least among college graduates, might be, \u201cokay, I\u2019m going to go to New York, try to establish myself there. If I can make it there, I can make it anywhere.\u201d<\/p>\n Are we now talking about Texas having several places where it\u2019s a real option to make it there and be a part of something that could outstrip some of these longtime giants?<\/p>\n It\u2019s a short answer. So just a couple of statistics over the last five years, one out of every five new jobs in professional services has happened in Texas. It\u2019s something like five times the rate that you would see in these older hubs.<\/p>\n You mentioned the Northeast Corridor or California or even Illinois because of Chicago\u2019s presence there and Texas has simply outgrown all of those regions. And there\u2019s many more job opportunities now for people that are looking for that kind of work.<\/p>\n \u00bb GET MORE NEWS FROM AROUND THE STATE:\u00a0Sign up for Texas Standard\u2019s weekly newsletters<\/a><\/p>\n But it also means we\u2019re talking about, I guess, real estate prices now starting to move at a premium. We\u2019re talking density issues and other things that these cities are going to be facing in coming years.\u00a0<\/p>\n Well, that\u2019s why I\u2019m interested in this sector, is because I cover commercial real estate at the center, and professional services are important for a lot of different real estate assets, certainly office.<\/p>\n Now, one thing to think about, we\u2019ve got about a 50 million square foot oversupply in offices in Texas right now, so growth in these firms will definitely help take some of that excess supply, but then these workers tend to make about 55% more than the average income in Texas. They drive retail investment, and they also buy a lot of homes.<\/p>\n But there are some countervailing forces here. I think about AI, for example, and we\u2019ve heard about how there might not be as many jobs in some of these high-paying industries. You think about work-from-home trends.<\/p>\n How will that affect the impact of some of the cities?\u00a0\u00a0<\/p>\n So let me take the second one first. Work-from-home, professional services, they were the leaders in that before the pandemic. And they basically maintained that level of high rates of remote work. That was largely because they were often on site with their clients. So they didn\u2019t need to be in the office as often. And a lot of other industries have simply caught up to that trend.<\/p>\n Now, the AI was a bigger question. So there\u2019s a lot of debate over whether AI will make service workers much more productive and then these firms can then generate more revenue and grow more and then create more demand for office space\u2026 Or will AI displace these workers and then reduce the demand for office space? And that\u2019s really a big question right now.<\/p>\n If you found the reporting above valuable, please consider making a donation to support it\u00a0here<\/a>. Your gift helps pay for everything you find on\u00a0texasstandard.org<\/a>\u00a0and\u00a0KUT.org<\/a>. Thanks for donating today.<\/p>\n","protected":false},"excerpt":{"rendered":"We know this intuitively and the numbers have long borne it out: a modern economy depends on places…\n","protected":false},"author":2,"featured_media":60635,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[38],"tags":[28,134],"class_list":{"0":"post-60634","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-jobs","8":"tag-business","9":"tag-jobs"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/60634","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=60634"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/60634\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/60635"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=60634"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=60634"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=60634"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}