Using data on the growth of information related businesses in Texas in the period from 1971 to 1981, this paper analyzes and interprets the results in the context of demographic changes and educational policy in Texas. To track the number of businesses that fall into the information sector, and to reveal trends in growth and in industry consolidation, the study applies a model developed by Marc Porat to current census data for individual industries classified by Standard Industrial Classification (SIC) codes. To refine estimates of growth, the study further classifies businesses by number of employees. State data on changes in the Texas information sector are presented for small, medium, and large businesses within each of seven categories: (1) knowledge production and inventive industries; (2) information distribution and communication industries; (3) search and coordination industries; (4) risk management industries; (5) information processing and transmission services; (6) information goods manufacturing industries; and (7) wholesale and retail trade in information goods. Comparisons are made with national aggregate data for the same period. Implications of information sector growth for employment and for state policy makers and educators are also discussed. (THC)