In the late Eighties, fourteen semiconductor manufacturers and the US government created a partnership called SEMATECH to solve common manufacturing problems.
The selection of Austin as its headquarters sparked a technology boom. Growth was so robust for so long that the Austin economy began to look recession-proof – until the dot-com collapse of 2001 tripled the unemployment rate.
Responding to Collapse
In response, city government partnered with the Chamber of Commerce on a long-term economic development strategy that led to a nearly $6 billion increase in regional payrolls over five years. A second five-year plan launched in 2010 seeks to add another $11 billion. Austin's successful tech companies – including such major names as Freescale, Samsung, Facebook, eBay and Altera – are bolstered by rates of Internet access far exceeding US averages, a highly educated workforce and the presence of multiple universities. But achieving the 2015 goal will take more than repeating the past.
Educating the Workforce
Austin faces a workforce challenge: only 4% of the homegrown population attends higher education and only half of secondary school graduates emerge "college-ready." A significant low-income population accounts for this performance. Technology commercialization and tech transfers also present a challenge, despite high rates of patents issued for developments at the University of Texas in Austin, due to shortages of seed funding and expertise in building a business.
A program that puts College Enrollment Managers into public schools to guide the choices made by students has helped boost the graduation rate for low-income students 14 percentage points to 75%. The City Council has also created an Emerging Technologies Program to provide a single point of contact for entrepreneurs, tech businesses and Austin's many incubators. It offers consulting, matchmaking and expert advice on where in Austin to find the resources a growing company needs.
It is through this kind of public-private collaboration that Austin will achieve the growth it needs to maintain its place as America's second Silicon Valley.
Labor Force: 436,336