Two centuries ago Texas was a sparsely populated and desolate backwater on the distant frontier of the waning Spanish empire, decades away from joining the emerging nation that grew out of the thirteen British colonies on the eastern shore of North America.
Today the Texas economy is large, diverse and dynamic, boasting a gross state product (GSP) valued at almost $925 billion in 2005. If the Lone Star State were an independent country, it would have the tenth largest national economy in the world--just behind Spain and Canada, and ahead of Brazil, the Republic of Korea, and India--according to data from the World Bank.
The actual unfolding of the transformation of the Texas economy was wholly unpredictable at the beginning of the 1800s when the territory was still a dangerous, desolate and dusty outpost, well beyond the frontier of substantial European settlement. Only in the last decades of the 19th century did the potential of the territory as an economic and political powerhouse begin to reveal itself. But, the growth of the cotton industry, the development of railroads and the discovery of large quantities of oil were only the first of a series of dramatic transformations that would make the Lone Star State the economic powerhouse it is today.
A combination of unexpected bounty in the form of mineral wealth and other resources, growing integration into the national economy of the United States (which itself underwent its own series of transformations), the growth of the service economy and the high technology industry, and the state's increasingly important geographic position at one of the frontiers of an extensive free trade area that includes Mexico and Canada, have all contributed to the ongoing transformation of the state.