Austin has made the news over the past few years for some really good reasons. It is not only the capital of Texas, it is a bona fide tech hub.
According to Pitchbook, Austin startups had a banner year in 2021. Investors poured more than $5.5 billion into 412 deals, more than double the investment during 2020. A number of venture capitalists have relocated to Austin from the West Coast or New York.
Large tech companies have moved into Austin as well. Oracle moved its headquarters to Austin from California in early 2021. Google, Apple, Amazon, Facebook, and SpaceX all have a presence in Austin.
Tesla recently celebrated the opening of Giga Texas in Austin, with Musk claiming it is the largest factory in the U.S. and that it will be the highest volume auto plant when it is fully operational. The plant is 338 million cubic feet or 15 city blocks. It will eventually employ about 5,000 workers in the Austin area.
Austin was also recently designated the fastest growing big metropolitan city in the country. It is ranked 29th in the nation and has seen 34% population growth since 2010, with people likely being drawn to Texas’ lower taxes, fewer business regulations, and lower cost of living. Many are moving in from California.
Texas is the number one state for tech jobs outside of California, and the jobs pay well. A study from Blind, a professional social network, named Austin the best-paying city in Texas for software engineers. The tech companies in Austin and surrounding areas are competing for talent in a tight labor market, which means that compensation rises as demand for talent rises.
Some may point out the similarities between Austin and Silicon Valley. Both have green rolling hills, a population invested in being outdoors, and both are innovation hubs. But don’t compare Austin to Silicon Valley or any place else. Austin residents aren’t having it. Austin has an entirely different vibe, and they are more than ok with that.
The differences between Austin and Silicon Valley are notable. The state and local governments in Texas are pro-business, while California is seen as not being as business friendly. Texas has no state income tax and there are generous incentives to businesses to draw them in. Morgan Flager, managing partner of Silverton Partners which is an active investor in Austin, said that the city’s success is built more on collaboration and kindness than competition, unlike Silicon Valley. He hopes it stays that way.
