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Austin Builds for the 21st Century:
University, Business School Help Create a Technological Mecca
by J.B. Bird
The thriving music scene, warm climate, and casual atmosphere have always made Austin a great student town. Over the last ten years, the city has become a high tech business town, one of the world's top technological cities.
"Ask people in Silicon Valley to nominate their closest rival," notes a recent issue of The Economist (3/29/97), "and Austin is the most common answer."
Lower corporate costs are one factor that draws the envy of Silicon Valley execs. Everything from personnel to office space costs less in Texas. Quality of life is also seen as a major benefit, with schools and parks rating highly, even traffic. "You can get anywhere in the city in 20 minutes," notes Kay Hammer, CEO of Evolutionary Technologies Inc., "which creates an enormous increase in your productive time."
As founder and CEO of Dell Computers Michael Dell says, "Every time I go to Silicon Valley, I thank God that we are based in Texas."
Flagship Austin
The city's three-pronged, high-tech attack features national leaders in software, computer-related industries, and semiconductors. With over 11,000 workers, Motorola is the city's largest employer. Billion-dollar FABs from Motorola, Samsung, and Advanced Micro Devices have made Austin the nation's #1 city in semiconductors.
Nonetheless, Dell Computers is Austin's corporate flagship. Dell is headquartered in Round Rock, Texas, but with 8,300 Austin workers, the company easily leads the city's hardware sector. And Dell's regional economic impact has been estimated at $3 billion and 30,000 jobs. Moreover, for a city that picked itself up from the mid-80s oil and real estate busts, Dell's rags-to-riches story is the defining image.
Michael Dell's personal story has been well chronicled: how he pioneered the direct marketing of PCs, starting a business from the trunk of his car and turning it into the world's third-largest computer manufacturer.
Dell has had great ripple effects on Austin, luring other high-tech companies like Samsung, and making names for dozens of its managers, who often form successful companies of their own, like Akia and First International Computer.
Michael Dell did not achieve success in a vacuum, however. Dell is famous for dropping out of UT to start his business, but in fact the University and the Business School did a great deal to create the climate for his meteoric rise.
It takes a Business School
As Dave Gibson notes, scores of homegrown, high-tech companies have spun out of UT Austin, like Tracor, Radian, National Instruments, and two of the country's fastest-growing companies, E.T.I. and Intelliquest. Gibson is a researcher at the ICē institute and co-author of Creating the Technopolis, a study of factors that can lead a city to high-tech success.
He points out that while many high-tech companies have evolved from UT's top-rated engineering program, to grow and succeed these companies need business students -- marketers, accountants, information managers. "For Michael Dell to go from one car trunk to 8,000 employees in 10 years," says Gibson, "you need a business school."
The University's role in Austin's high-tech development dates back at least to 1957, when the Austin Chamber of Commerce commissioned the Bureau of Business Research to study the city's economic prospects. The major catalyst for Austin's recent development took place in 1983, when a coalition of business, government, and education leaders convinced MCC, the country's first private-sector, high-tech consortium, to choose Austin as its headquarters. (See MCC: the catalyst)
Since MCC's arrival, the Business School has kept up its efforts to develop Austin. Former Dean Kozmetsky has been a prime mover through the IC2 institute. In 1989, with Texas in the throes of the oil and real estate busts, IC2 launched two key ventures to spur development: the Austin Technology Incubator and The Capital Network.
"That was down-home pragmatism," notes Kay Hammer, an ATI graduate. "George Kozmetsky and others asked the important question: What do we have to do to foster a growth-oriented community." Hammer knows about growth: the venture she started at ATI, Evolutionary Technologies Inc., was rated as the country's seventeenth-fastest growing company in 1996, when Hammer appeared on the cover of Forbes.
Her success is another reminder of the University's crucial role in Austin's prosperity. By spurring innovations, offering continuing education for high-tech workers, training new entrepreneurs and managers, and by collaborating directly with local businesses, the University helps Austin prepare for the 21st century.
Facing the millenium, the city's prospects look excellent. The Economist predicts that by 2000, all high-tech players will need listening posts in Austin. Even today, in order to keep pace, company reps can't just go to Il Fornaio in Palo Alto, says Michael Spence, Dean of Stanford Business School: "You also need to know what is happening at the Boar's Head in Austin." Keep an eye out for the Texas business grads at the nearby tables.
For information on specific programs at the McCombs School, consult our contacts page. For media information, contact the Communications Director by phone at 512-471-3314 or by email at CommunicationsDirector@mccombs.utexas.edu.
