SWOT Analysis

Diverse industries: A diverse group of employers spanning a wide variety of industries ranging from agriculture to manufacturing and production facilities, warehousing, distribution, logistics and supply chain, renewable energy, hospitality, office and retail already have a presence, or are planning to enter the region in the near future, creating jobs and tax revenue.

Central Location: Heart of Texas is centrally located and well situated to market itself as a transportation and logistics hub with proximity to Austin, Dallas, Houston, and San Antonio markets. Transportation assets include access to I-35 and I-45, and US Highway 84, rail access and proximity to ports. 

Industrial Parks: Seven industrial parks provide an affordable option for expanding businesses. 

Low Costs: The region has a low cost of talent versus the national average. Property costs are lower within the region as compared to major metropolitan markets and there are no personal or corporate income taxes in Texas.

The ability to attract manufacturing facilities and production operations due to the region’s location, land, and skilled workforce is a strength. Additionally, access to educational resources and partnerships to build a talent pipeline are being used to train talent in aerospace engineering, aircraft maintenance and management, electric vehicle maintenance and industrial systems, which can be marketed to attract more companies to the region.

Abundant water and natural resources that are ideal for renewable energy companies, agriculture and recreation businesses.

• Relatively low cost of living, no personal income taxes and low housing costs
• Diverse and abundant outdoor recreation opportunities and an extreme sports hub
• Access to hospitals and high quality medical care (the center of the region is the medical epicenter of the area)
• Six higher education institutions and Baylor Research & Innovation Collaborative (BRIC) Research Campus
• Magnolia Market at the Silos will be a large entertainment and dining center that will attract visitors and tourists from all over the United States
• 143-acre Cottonwood Creek Market is being built, featuring Cinemark Theatre, Top Golf, and a bowling center[xxxvi]
• Brazos Riverfront,[xxxvii] an active mixed-use waterfront district along the Brazos River in downtown Waco, Texas and adjacent to Baylor University
• Agricultural assets; and strong regional commitment to local foods and Farmers

Heavy economic reliance on coal, oil, and gas, during a time when the nation and the State of Texas are focusing on renewable energy and becoming less dependent on coal, oil, and gas means that jobs and wealth are leaving the region

• Lack of skills training
• Many of the graduates of the area’s university and colleges, including 2-year, 4-year and advanced study programs, seek employment elsewhere because of better opportunities and wages[xxxviii]
• Aging population in rural areas

•  Economically depressed region:[xxxix]
  • For the region as a whole, unemployment is one percentage point below the U.S. rate. However, the 2019 Per Capita Personal Income was $41,272, or 73% of the U.S. amount of $56,490 and the poverty rate is higher than national and state averages 
  • Little entertainment outside of McLennon County
• Perception that the pay is higher and there are more job opportunities in the more urban centers
• Public transportation challenges of a mainly rural region, while service is available, distances to employment and healthcare are long, and service needs to be expanded to meet that need

• The Economy is already beginning to diversify in the region with many new entries: 
• Retail and Entertainment Centers are being built, which will attract visitors and create jobs: 
• Magnolia Market at the Silos[xliv] will be a large entertainment and dining center that will attract visitors and tourists from all over the United States
• 143-acre Cottonwood Creek Market is being built, featuring Cinemark Theatre, Top Golf, and a bowling center[xlv]
• Will provide employment in the construction, manufacturing, healthcare, hospitality and logistics sectors
• Brazos Riverfront,  an active mixed-use waterfront district along the Brazos River in downtown Waco, Texas and adjacent to Baylor University will combine residential, retail, restaurant, small office and hotel uses along walkable streetscapes and open space
• Warehousing/Distribution: 
• The introduction of Amazon Fulfillment Center[xlvi] creates jobs and is a good step toward economic recovery
• It will also put Heart of Texas on the map as a distribution and logistics hub
• Holt Cat[xlvii] is the largest distributor of Caterpillar equipment
• Ryonet Corporation,[xlviii]   a leading screen printing supply distributor
• Manufacturing and Production companies are flocking to the region
• Hello Bello’s[xlix] Diaper manufacturing and distribution
• Merrick Engineering[l]
• Leading manufacturer of plastic and injection molded consumer product 
• Envases Group,[li] a Mexico-based global leader in the production of packaging solutions
• ZinkPower, [lii]  leader in hot-dip galvanizing and powder-coating services
• Aspen Custom Trailers,[liii] a high-end custom commercial trailer manufacturer
• Laminate Technologies,[liv]  a custom laminate panel and fabrication manufacturer
• Advanced Rail Systems, [lv] leaders in railway automation
• SpaceX[lvi]
• The Coca-Cola Company[lvii] expansion
• Corporate Headquarters
• Texas Meter & Device[lviii] will construct new corporate headquarters
• Healthcare
• New Era Partners,[lix] Oceans Behavioral Health Hospital network 
• Renewable Energy
• Introduction of wind and solar farms to the region, providing tax revenue

• The region is strategically placed between some of the fastest growing cities in the country (Austin, Dallas, Houston, San Antonio) and attracting investment like never before
• Seven industrial parks with land to build on and access to highways leading to Houston and Dallas.
• Robust incentives to attract new businesses that include leveraging the existing Texas Enterprize Zone program and Opportunity Zones.

A workforce education and training network: Partnering with local institutions to train local workforce and create attractive talent pipeline. With the trend toward greater skill requirements for employees, the region has partners in place that could help provide needed skill sets. Texas State Technical College and Baylor University offers significant educational opportunities.

• Wind and Solar Farms are being built, powering homes and providing tax revenue and helping air quality. The region has the opportunity to attract renewable energy companies due to existing environmental resources and low land prices. 
• Opportunity to partner with Starbucks and other large companies investing in solar farms in the state.

• Increase public transit access to McLennan County so people living in the remaining counties can work at the new businesses being established there. 
• Mixed-use development continues to be built, while family-friendly activities lure crowds downtown after hours
• Popular TV show, Fixer Upper with Chip & Joanna Gaines showcases Waco and the Heart of Texas region; Baylor University and stadium complex growth, down-town Waco and Brazos River corridor redevelopment. Additionally, smaller communities are attracting investment and tourism with restorations of historic downtowns, adding farmers markets and other family friendly amenities.

• Much of the growth and attraction of new businesses is consolidated in McLennan county, which leaves the remaining counties in need of investments. 
• Lack of economic diversity means small communities are hit hard when one business goes down due to economic, manmade or natural disasters.
• Coal, oil, and gas are leaving the region, resulting in loss of jobs and tax revenue which need to be replaced by a promising industry. 
  • Oil and gas pipeline construction appears in the top five unemployment claims in four of the six counties[lxxiv]

• The exodus of Big Brown Plant and Manitou Group and thus the coal, oil, and gas industry in a region may not appear to be outwardly attractive to companies considering coming to the region
• Lack of access to capital for small businesses. While within the Waco MSA a large number of locally-owned banks compete for business, it is difficult for would-be entrepreneurs and existing business owners to find financing both in Waco and throughout the region. Additionally, there is a very low usage of USDA and SBA loan products in the region.

• The Heart of Texas region as a whole has a lower educational attainment level, which translates to a lower skilled workforce. 
• Tesla[lxxv] offers a 12-week electric vehicle service training program, culminating in a 2-year employment contract at a Tesla Service Center, however, completing this program will likely require relocation out of the Heart of Texas area

• Drought is always possible in an arid climate
• Renewable energy, while it has the potential to bring in tax revenue and help air quality, doesn’t bring in a lot of jobs to create wealth in the region. Should focus on Manufacturing, Production, and Distribution instead, which bring many more jobs 
  • Solar Power company OCI only plans on hiring one person at an annual wage of $48,000 once the project is operational in 2022, compared to the Amazon Fulfillment Center, which will bring 1,000 jobs to the region

• Overall moderate population growth, but concentrated only in McLennan County
  • A decline in population in the rural counties coupled with outmigration of citizens under 35 years of age has numerous negative impacts including limited workforce and declining tax rolls.
• Wages in the Heart of Texas region continue to lag behind the state and national averages. This can cause working aged individuals to exit the region in pursuit of better pay elsewhere. 
• Rising costs of transportation increase barriers to gainful employment for rural and suburban populations.