San Antonio’s economy has traditionally been led by the military, tourism and health care. While tourism and health continued to grow in the 1990s, the military presence in San Antonio declined. San Antonio has been shedding its one-dimensional “military town” label and dedicating itself to a diverse economy. Kelly’s closure as a military base and rebirth as KellyUSA in August 2001 signaled a new era for one of the oldest cities in the nation. Both the government and the private sector have been working to capitalize on the city’s many existing strengths as well as to fortify new ones. One of the payoffs for their vision and collaboration was Toyota’s decision to build its sixth North American vehicle assembly plant in the Alamo City. The addition of the eighth-largest company in the world to San Antonio’s burgeoning aerospace, biomedical and information technology sectors promises to help further diversify the local economy.
Economy Fast Facts
San Antonio is currently anchored by three key industries: health care, tourism and the military.
• Over 103,000 residents are employed in medical- and bioscience-related jobs. The industry has an annual economic impact of more than $12.9 billion.Source: The Greater San Antonio Chamber of Commerce: San Antonio’s Healthcare & Bio-science Industry Economic Impact in 2003.
• San Antonio is a top visitor and convention destination, with more than 20 million people choosing San Antonio as their vacation site. Tourism employs more than 86,000 and contributes $7.2 billion to the local economy.Source: The Greater San Antonio Chamber of Commerce, “San Antonio’s Hospitality Industry: Economic Impact in 2002”
• Four military bases provide paychecks to more than 74,000 military and civilian personnel, with an estimated $5.1 billion in direct economic impact.Source: The Greater San Antonio Chamber of Commerce Military Affairs Committee, February 2004
Diversity Helps
Emerging industries such as aerospace and information technology have grown significantly in the past five years, increasing the city’s economic well-being. According to recent studies published by The Greater San Antonio Chamber of Commerce, these industries have a combined economic impact of $6.3 billion.
Heavy Hitters
Working hard to lure major corporations, San Antonio has been successful in bringing aviation powerhouses like Boeing and Lockheed-Martin to the area. Other Fortune 500 companies whose corporate headquarters are in San Antonio include telecommunications giant SBC, fuel producer and retailer Valero Energy Corporation, and financial services company USAA.
Research and Development
Research and development is a major industry in San Antonio, anchored by Southwest Research Institute, the Southwest Foundation for Biomedical Research and various tenants at Brooks City-Base. The R&D presence has boosted local educational development and the support of science and technology programs.
San Antonio Technology Accelerator Initiative
Initiatives abound for business and community leaders who seek to grow tech-heavy industries such as information technology, telecommunications and bioscience. One of the main players is the San Antonio Technology Accelerator Initiative (SATAI). It’s a network of institutions, individuals and resources established to foster and nurture the city’s technology growth. SATAI recently turned its attention to addressing funding challenges for startup companies by setting up a process to introduce entrepreneurial companies to angel investors.
Bioscience
San Antonio has a reputation as a regional hub for medical care in South Texas, but what many don’t know is that it’s also a growing center of bioscience research and innovation. From basic research to commercial production, San Antonio’s bioscience sector has all the ingredients for success. In fact, some of the development work on eight of the last 11 cancer-fighting drugs approved by the U.S. Food and Drug Administration took place in San Antonio labs.
Homeland Security
The tragic events of Sept. 11, 2001, made products and services related to combating terrorism and protecting the homeland essential. With this new sense of urgency comes the need for leading-edge technologies, manufacturers and services. San Antonio’s solid military background and infrastructure make it uniquely qualified to fill the needs of this emerging industry.
To address this economic opportunity, the community created the Southwest Enterprise for Regional Preparedness through the San Antonio Technology Accelerator Initiative (SATAI), in recognition that the customer-driven, “can do” approach that San Antonio brings to its defense mission applies perfectly to identifying, designing and deploying solutions for community preparedness and emergency response.
Big Help for Small Business
Encouraging and supporting entrepreneurship is another key to building a strong economy. San Antonio has a wealth of small-business development resources, many of which are free of charge, such as:
• First Point Business Information Office www.sanantonio.gov/edd
• Procurement Technical Assistance Center www.sanantonio.gov/edd
• San Antonio Small Business Development Center www.iedtexas.org
• Small Business Economic Development Advocacy Program www.sanantonio.gov/edd
• Small Business Resource Center www.sachamber.org/sbrc
Employment
San Antonio has remained strong during the recent turbulent economic times. From October 2003 to October 2004, the area added approximately 11,500 jobs. San Antonio is set to have an even brighter economic future with the addition of an $800 million Toyota auto assembly plant, scheduled to open in 2006, that could generate as many at 16,000 jobs, including 2,000 Toyota workers, suppliers and ancillary industries (see feature, facing page).
International Business and Trade
In the last few years, San Antonio has taken several significant steps toward enhancing its trade-related infrastructure. With the U.S.-Mexican border’s opening in November 2002, the city began establishing cross-border trucking operations and emphasizing the concept of San Antonio as an inland port. In addition, foreign investment and venture capital have become increasingly important.
The Future
San Antonio has the ingredients to foster an innovative and technology-driven economy — research centers, entrepreneurs, investment capital, a skilled work force, a great location, research networks and passion. Business and community leaders, along with citizens, continue to build up an already bright future.
Toyota Plant Equals Big Impact
hen San Antonio Mayor Ed Garza heard that Toyota had chosen to build its sixth North American assembly plant here, he said, “Our economy will never be the same. We’re talking about manufacturing becoming one of our largest industries overnight.”
Toyota will initially invest as much as $800 million in the new plant, which will begin full production on Tundra pickup trucks in fall of 2006. Officials say the plant will employ 2,000 workers who will build 150,000 full-sized Tundra trucks each year. The plant will be located on a 2,000-acre site in southwest San Antonio — about 10 miles southeast of KellyUSA.
The supplier side of the Toyota equation is also important — both for job creation and economic impact. Toyota announced in December 2004 that 18 service and parts suppliers would join the automaker on site “to meet the demands of its ‘just-in-time’ delivery system.” The on-site suppliers will contribute an additional 1,500 new jobs and $150 million in new investment. These companies include manufac-turers of seats, interior roof liners, and tire and wheel assemblies. This will be the first time Toyota or any other automaker has had so many automotive suppliers actually on plant property, according to Hidehiko Tajima, president of Toyota Motor Manufacturing, Texas (TMMTX).
Mario Hernandez, president of the San Antonio Economic Development Foundation Inc., said as many as 100 suppliers could choose to set up in Texas as a direct result of the Toyota plant. Hernandez also said there could be as many as 5,300 spin-off jobs in that same time period, representing an economic impact of $1.5 billion.
In addition, the Texas Workforce Commission is providing Toyota Motor Corp. and the Alamo Community College District with a $2.15 million job-training grant from the state’s Skills Development Fund. The money will be used to custom-train the 2,000 assembly workers, operators, managers, machinists, fabricators and clerks that will be employed at the Japanese automaker’s plant.
Based on data provided by the San Antonio Economic Develop-ment Foundation Inc., it is projected that Toyota will generate investments, taxes and payments totaling $2.4 billion -during the first 10 years the plant is operational.
Information Technology
According to Alamo Workforce Development Inc., San Antonio’s technology sector is expected to grow about 8 percent during the next three years. Overall, the city is expected to support approximately 11,000 high-tech jobs during the next five years.
Rackspace Managed Hosting is one of the companies that put San Antonio on the world’s IT map. High-profile clients like EMI Records, Miller Brewing Co., National Geographic and Best Buy are just a few of the reasons Rackspace was ranked one of the fastest-growing firms in North America by Deloitte & Touche USA LLP.
The demand for information security products has also put San Antonio at the forefront. One of the city's stars is SecureInfo, a network security solutions provider that was named to Inc. magazine's list of the top 500 fastest-growing companies in the United States in 2004.
Even after the Web bubble has burst and the recession has oozed, the technology sector has continued to burn bright in the Alamo City. Initiatives abound as business and community leaders seek to expand this little-known economic giant.
Largest Publicly Traded Companies
Alamo Group, Inc.
Argonaut Group, Inc.
Clear Channel
Communications, Inc.
Cullen/Frost Bankers, Inc.
Harte-Hanks, Inc.
Luby’s, Inc.
Rush Enterprises, Inc.
SBC Communications, Inc.
Tesoro Petroleum Corp.
Valero Energy Corp.
