In the mid-1980s city watchers wrote off Houston as a one-industry town gone bust. Oil prices were at the bottom of the barrel, unemployment hovered around 10 percent, and the city had lost over 220,000 jobs. Today oil prices are still sagging by historical standards, but Houston has surged back, with one of the most vibrant and diverse economies among the country's major metropolitan regions. Last year the city enjoyed a job growth rate of 2.3 percent, far outpacing New York's paltry 0.8 percent and even surpassing Los Angeles's respectable 1.8 percent.
Entrepreneurship has led the way in Houston's revival. Last year, according to an analysis by Vermont-based County Data Corporation, more than 53,000 businesses opened their doors for the first time in Houston, which led the nation by a wide margin in start-ups per capita and trailed only Los Angeles in absolute numbers. Nor is it hard to figure out what's made Houston so attractive to new companies. Pennsylvania-based Regional Financial Services found that the overall cost of doing business in the city—for everything from office space and labor to taxes and licensing fees—was among the lowest in the nation, a full 50 percent lower than for New York.
What has set Houston apart from its other low-cost rivals is its cosmopolitan openness. A port city with vast international connections, it has attracted large numbers of Chinese, Vietnamese, and Africans into its already diverse ethnic mix, and these ambitious immigrants have thrived. Tan La, who fled Vietnam with the other members of his family in the late seventies, now helps them run a chain of Houston restaurants that employs over 200 people and took in over $7 million last year. Texans "are adventurous and like to try new things," he says, adding that "there's something about the place that makes you feel good about the future."
Houston's business community is also unusual among big-city elites in lending strong support to companies that are just starting out. Charlie Wilson, the founder of SeaRail International, a shipping firm, has gotten valuable advice from experienced businessmen through the city's Young Entrepreneurs Orga-nization. "In many ways," he says, "Houston is still a small town where everyone knows everyone else and people like to see others succeed."
Andrew Segal, who owns a small empire of successful office buildings, sees the big-gest contrast with his native New York in the business cultures of the two cities. What he likes about Houston is that "everyone seems to be willing to talk openly about money. No one's ashamed to be out there trying to make it."