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State of Austin’s Tech Sector: 3 Key Points

Austin skyline in the evening

Has Austin’s tech sector hit its peak or is it just getting its stride? The answer to that question will vary depending on whom you ask. In 2016, high tech industry jobs in Austin grew by only 1.1%. According to the Austin Chamber, it was the first time since the recession that tech job growth in the city fell short of overall job growth (which was at 3.3%). But we all know there’s more behind those numbers than what’s at face value.

“The market in Austin is growing, even if the jobs only grew by a small percentage,” explains Jayson Spaits, Director of Technical Services at The HT Group. “There is an overwhelming need for high-tech candidates here, and high-tech job seekers want to be involved with companies here in Austin that are creating exciting projects and have new ideas.”

For some perspective, here are three critical factors that are shaping Austin’s tech sector right now.

1. Cost of living is still competitive.

While Austinites complain about the rising cost of living in the Texas capital, research shows that it’s still a remarkable value for tech workers. Silicon Valley and New York remain bigger tech hubs, but Austin’s lower cost of living means tech workers break even (and sometimes even get ahead) on actual take-home pay. For example, an average tech worker earns a salary of nearly $127,000 in San Jose, California, but only $103,400 in Austin. However, the adjusted salary for cost of living equals about $1,000 more each year in Austin.

2. Austin’s bootstrapping DNA is evolving.

There was a time when Austin’s tech startup community complained about the lack of funding in such an entrepreneurial city. But savvy leaders are changing the game. As Autumn Manning, co-founder and CEO of YouEarnedIt tells Inc. Magazine, “I know there are a lot of people saying you can’t get a good deal in Austin or that they’re getting penalized for being in Austin. If you’re saying that, I would really turn the mirror on yourself and ask why you think you’re getting penalized. What is it that you’re not doing or could do different?”

Capital Factory recently partnered with The Dallas Entrepreneur Center in a move that Capital Factory Founder and Executive Director Joshua Baer expects will open a significant network of Dallas investors and private equity firms to Austin tech startups. And the Seattle Times laments this year that “Austin’s startup scene has kept pace with Seattle’s in terms of investor dollars pouring in…The industry has grown without anything comparable to two of Seattle’s strongest assets — Microsoft and Amazon — instead flourishing on the strength of its community and the city’s history of creativity.”

3. Cultivating local talent has become a priority.

Tech industry hiring managers should take note: Everywhere you look, tech execs are pouring resources into cultivating local tech talent. Apple is partnering with Capital Factory to provide Austin Community College students with free coding resources based on its Swift programming language. And Lumina Foundation recently named Austin a National Talent Hub, awarding the city a $350,000 grant to help a targeted 70,000 low-income students and under-represented groups gain degrees in mostly healthcare and tech fields.

The opportunities for these home-grown tech stars are maturing, too.

“When it comes to high tech and helping enterprise-level companies grow in size and scope, Austin is ahead of the curve,” Spaits says. “Instead of piecing projects together with a .Net or Java Engineer, Austin companies now have access to local talent that can fully design and develop the algorithms needed to scale up. Giving people the chance to be an integral part of something big, as opposed to a small piece of it, is exciting.”

So, with these points in mind, it’s fair to say a slower overall growth from an already booming sector can be deceiving news. Other research hints at a bright future. In fact, BuiltInAustin and SkylesBayne report the number of local employees at Austin’s 100 largest digital tech companies grew to nearly 60,000 in 2017, which is an 11 percent increase over 2016.

“I have seen the Austin tech space come quite a long way in the last 10 years,” says Katy Malone, senior recruiter at tech-giant Atlassian. “We’ve gone from being the wimpy second cousin of Silicon Valley to one of the most desirable homes for thousands of profitable and high-performing startups and big players like Facebook, Google, Indeed and Atlassian.” In short, she adds, “The Austin market is hot and these coals are not going out anytime soon.”


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