Austin Poised to be The Leader in Entrepreneurship and Job Creation
During and after SXSW, Austin has gotten a lot of press nationwide thanks to its great entrepreneurial network and community, SXSW interactive, the presence of incubators, and entrepreneurial education at UT.
The Time magazine article called “How To Create a Job” by Barbara Kiviat highlighted several key points about Austin (and also talked about the Austin Technology Incubator) :
- Austin provides a useful lesson in how to stay on top of the innovation game. Start with an educated population (43% of Austin residents have a bachelor’s degree or higher), mix in a robust venture-capital scene (one of the best outside Silicon Valley), add a supportive community of peers (groups like Bootstrap Austin band together hundreds of entrepreneurs) and wrap all that up with a state government unafraid to throw money at companies that need a little help getting off the ground.
- Over at the University of Texas, the nonprofit Austin Technology Incubator houses fledgling firms, plying them with business-plan advice, contact with financiers and lots of coffee over which to share ideas and solve problems. The incubator’s 20-year record: more than 200 companies and thousands of jobs created. “Companies don’t start unless they’re resourced,” says Rob Neville, who launched one company with the help of the incubator and is now scaling up another, Savara Pharmaceuticals, in anticipation of support from the Texas Emerging Technology Fund.
- These new companies are key to job growth. People talk about small businesses being such great generators of jobs, but a more precise assessment is that young businesses are. John Haltiwanger, an economist at the University of Maryland, has been studying government data for 25 years and has determined that about a third of all new jobs created come from start-ups. Furthermore, young companies add jobs faster. From 1980 to 2005, the typical 15-year-old firm added jobs at a rate of 1% a year, the typical three-year-old firm at a rate of 5%. “These are the rocket ships of the economy,” says Haltiwanger.
Then there is the University of Texas. The latest issue of Fortune Magazine recognizes UT as one of the top 5 schools for entrepreneurs.
“Competitive edge: Many schools sponsor business-plan contests — UT has the Moot Corp competition. But there’s a separate idea-to-product competition for students who can commercialize campus technologies.”
The network of organizations that help entrepreneurs and small businesses get off the ground is great and includes several incubating organizations: Austin Technology Incubator, Capital Factory. Other cities are looking to Austin for inspiration. In her article Purva Patel of Houston Chronicle talked about the efforts to put together a tech incubator in Houston:
“There’s talk in the Houston tech scene about starting a local incubator by this summer. But because it’s not here yet, and because Houston trails in developing Internet companies, entrepreneurs are applying to programs in Austin and Dallas.”
And last but not least, there is SXSW interactive that does a great job introducing early stage companies to the community. Take Twitter for instance:
“Three years ago, South by Southwest attendees started using a new service called Twitter to broadcast 140-character messages as they attended panels and cruised parties. It was voted the winner in the event’s annual Web awards contest that year. Today, the service is the third-largest social-networking site in the U.S. It has raised more than $150 million in venture funding.
Twitter’s debut at the show “was one of those inflection points that changed the landscape in a massive way,” said Bart Bohn, who helps run the Austin Technology Incubator at the University of Texas. “It happened here.”