Report evaluates Houston's potential as a climatetech hub with 6 key takeaways
Three Houston energy tech innovators sought to quantify Houston's growth as an energy tech ecosystem, and, after 200 survey respondents and dozens of interviews, they've created six calls to action for the city.
Taylor Chapman, Gabe Malek, and Deanna Zhang created the Texas Climate Tech Collective to issue the Houston's Climate Tech Ecosystem 2023 report. The trio revealed some of its key takeaways at Greentown Houston's Climatetech Summit last month.
"We wanted to understand how the city has evolved," Malek, who's also chief of staff at Fervo Energy, said at the event. "We went into this project with a shared belief that Houston has unique characteristics that set it apart from the other cities thinking about climate, and if we could really lean into those characteristics, develop them, and amplify them, we could help grow the ecosystem in Houston and build climate solutions ... to accelerate the energy transition."
The full report, which is available online, highlighted six key takeaways paired with six action items.
1. "Houston has a perception problem."
Houston is known as a leader in the energy industry, which positions it well in a lot of ways, but in other ways, as Zhang points out, Houston might be being left out.
"People in this community like to talk about energy because we are the energy capital of the world, so we use a lot of energy-centric terms," she says, using "energy transition" as an example. "We don't use the word climate enough."
It might just be semantics, but it could be a reason the city isn't as regarded as a climatetech leader.
"If other ecosystems are using 'climate' and 'climatetech,' we need to be using these terms," she continues. "It's like SEO but for the ecosystem."
2. "Houston needs more risk capital, especially at the earlier stages."
Money is a huge factor, which comes as no surprise. While the city has a lot of corporations and private equity here, as Zhang explains, there seems to be room for improvement for early-stage resources.
"If you're a founder raising pre-seed, seed, or even series A, often times you have to go outside of Houston to meet those investors," she says.
According to the report, about half of survey respondents chose "access to venture capital" as one of the biggest challenges facing the ecosystem.
3. "Houston’s startup scene has improved radically."
The report found that 80 percent of responders agreed to the statement: “the ecosystem has improved dramatically over the last 5 years.” Meanwhile, 75 percent of respondents agreed that “Houston is more innovative than outsiders perceive it to be."
So what's holding the city back? According to the collective, "Shameless self-promotion of ecosystem accomplishments."
"We need to be shouting from the rooftops what is happening in this city. It's really a PR game," Zhang says.
4. "Houston’s energy resources and infrastructure have massive potential to create change, but are underutilized by the climate ecosystem."
The collective and survey respondents acknowledge that Houston has a lot of infrastructure already in place, but the call to action is for coordination of these resources.
"Greentown, Ion, Halliburton Labs, HETI — the list goes on and on, but people don't know where to start," Chapman says.
The report says the city's resources are "woefully undertapped" and "29 percent of respondents highlighted partnerships, coordination of existing assets, and Houston’s own future investments in infrastructure as potential accelerants to growth."
5. "Houston’s strong workforce and human capital are one of its greatest strengths – and it should be investing in transitioning that workforce to new opportunities."
Cultivating the workforce for the energy transition needs to be a major priority, according to the collective. The city has a talented workforce for engineering, technical, and project management talent.
"How do we reach and transition this workforce?" Chapman asks. "It's a huge opportunity and critical for Houston to ensure that its economic development continues to grow."
6. "Houston knows how to build...but needs to put expertise that towards climate innovation."
Houston as a major, sprawling city needs to continue to become "greener" in every way. While Chapman praises the city has done with its Climate Action Plan, Houston still lags other major cities like Los Angeles and New York in this way, per the report. Fourteen percent of respondents cited better climate-friendly infrastructure as a priority issue.
Chapman urged the audience to get involved locally to move the needle on more green initiatives for the city.