Austin, Texas
High-Tech Powers Metro Austin’s
Red-Hot Economy
Is everything really bigger in Texas? At $1.9 trillion, the Texas economy could swallow the economies of Brazil or Canada.
And the Austin region has been driving much of the state’s growth of late, with tech at the forefront.
A recent Brookings Institute report identified Austin as one of just eight U.S “superstar” metro areas in technology, along with San Francisco, San Jose, Boston, Seattle, Los Angeles, New York, and Washington D.C.
Austin earned its spot in this category of much larger metro areas due to its long-established tech industry, the massive pace of growth in just the past year and its “technology charisma” overall.
Notably, metro Atlanta was listed as a tech “rising star,” alongside nine other metros.
Heralded as a new Silicon Valley – some call Austin “Silicon Hills” – employment in Austin's high-tech industry has grown by nearly 25% over the last five years. By 2020, Austin’s high-tech industries comprised 16.4% of all jobs in the region, nearly doubling the national growth of 8.8%.
And more prominent domestic and international companies are looking to Austin to expand their markets. Companies that recently opened major operations in Austin include Tesla, Oracle, and Samsung Semiconductor, proving Austin’s tech growth shows no sign of slowing down.
During the pandemic, tech giants took the opportunity to relocate or expand to new cities, while workers also relocated to smaller, more “livable” metro areas like Austin to take advantage of remote work.
What's bringing tech to Austin? Well, you might say all the ingredients for a thriving ecosystem are in place:
- A pipeline of tech talent produced by higher ed institutions like UT- Austin and Texas A&M
- Early home-grown innovators like Dell and Texas Instruments helped to seed a well-established and growing venture capital and startup community
- A high quality of life, with a low business tax rate and no state income tax (though property taxes are high to compensate)
Each of these aspects contributes to the growth of the others, a positive tech feedback loop.
More tech brings more companies, creating more tech jobs and making Austin a hotbed for talent and investment.
Now, Austin must ensure that the people who live there can afford to stay and grow along with it.
A Historic Tech Town
The rapid recent growth of Austin's tech industries and the Silicon Hills moniker might have you believe that tech coming to the region is new. But Austin’s tech history stretches back to the middle of last century.
Tech planning became a part of an integrated economic strategy dating back to the 1950s. In 1957, the city established the Austin Area Economic Development Foundation, which worked to incentivize emerging tech companies to come to Austin.
And they were successful.
In 1967, IBM moved to Austin, followed shortly after by Texas Instruments founding its flagship office in Austin in 1969. In 1974, Motorola brought manufacturing to Austin, and in 1984, Michael Dell founded his revolutionary personal computer company. In 1997, Korean tech giant Samsung opened a plant to manufacture semiconductors.
Austin is even home to Bumble, the online dating app created in 2014, which led founder Whitney Wolfe Herd to become the youngest self-made female billionaire in 2021.
The Tech Boom Continues
Today, tech giants like Dell, IBM, Apple, and Samsung employ thousands of people in the Austin area. Facebook, Google, Oracle, and Atlassian also have major presences.
News about expansions, relocations, and jaw-dropping investments continue:
- Samsung is betting big on the Austin region, announcing a massive $17B investment in a new semiconductor plant last year.
- Apple broke ground on a $1 billion, 133-acre campus in south Williamson County, just north of the city. The new facility is slated to bring 5,000 well-paying jobs to the region.
- Tesla recently announced it would move its headquarters from Palo Alto to Austin, part of the so-called Silicon Valley Exodus that is also shaping today’s Austin.
These tech giants are also creating new manufacturing opportunities throughout the region. Today, 50% of Austin’s manufacturing production involves computer or electronics, like semiconductors.
Manufacturing jobs in the Austin region are expected to grow from 65,000 to 80,000 over the next two years alone.
Tech has driven growth not just the city but in surrounding places like Round Rock, Taylor and Cedar Park.
Austin is also home to a vibrant, thriving start-up scene.
At the 2022 South by Southwest festival this March, Capital Factory, an entrepreneur/start-up hub and venture capital firm announced a new Center for Autonomous Robotics. Driven by the presence of military tech hubs like the Airforce’s AFWERX and the Army Futures Command, the center will test experimental drones and autonomous vehicles.
As tech and business growth in Austin continues to skyrocket, venture capital investments in the region do too.
Austin - More than Just Tech
Metro Austin is also a major education hub, led by the University of Texas at Austin and Austin Community College, which are building a workforce of highly qualified employees who will stay in Austin and fill the jobs flooding the area.
The region is also home to a fast-growing roster of name-brand consumer good firms like Whole Foods, the iconic organic grocer now owned by Amazon, and other brands with hip cred, like Tito’s vodka, Deep Eddy’s vodka, Yeti coolers, and VRBO.
Metro Austin is also a massive healthcare center. Of Austin’s 12 largest companies, employing 6,000 or more people, two are healthcare centers. Ascension Seton and St. David’s Healthcare Partnership are major healthcare networks that both employ and serve the residents of metro Austin.
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