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AUSTIN, Texas -- For decades, Austin was defined by state government, the University of Texas and its Willie Nelson-inspired music and arts scene.

Today, the tech culture and economy have transformed Texas' capital city and surrounding suburbs, creating jobs, worsening traffic, raising prices and changing the region's politics, tempo and brand.

None of this is entirely new -- people have been calling the Austin area's tech scene "Silicon Hills" since the late 1980s and early 1990s. But the slogan and the hype have now dramatically caught up.

Apple's recent announcement that it will build a new $1 billion campus in the Austin area that could eventually employ up to 15,000 people -- expanding its current 6,000-worker presence and making it the largest private employer in the region -- has given the city's rapidly expanding tech community a morale boost, a moment in the national spotlight, and also a point of debate.

Apple's planned expansion has raised a host of unanswered questions about traffic, gentrification, affordability and competition for jobs.

Austin consistently ranks high on the lists of cities with the worst traffic in the United States. And a recent housing market analysis found a shortage of 48,000 rental units affordable to households earning less than $25,000 per year. Supplies for middle-income families are also increasingly strained.

"I think in the last 10 years, it's been a real struggle for Austin to keep its identity and keep its soul, as downtown is being razed and converted into condos and high-rises, and you have people like Google and Facebook and Apple taking over the town with these buildings," said Omar Gallaga, who covered the city's tech culture for the Austin American-Statesman for more than 20 years. "If you have all the artists and the creative people that make it interesting move away because they can't afford to live there, then it becomes a different place."

On any given day, some of the state's conservative lawmakers may be rubbing elbows downtown with 20-something entrepreneurs headed to work on motorized scooters -- or perhaps, not long ago, passing by Professor Dumpster, otherwise known as Jeff Wilson, the co-founder of the startup Kasita, who lived in a 33-square-foot dumpster for a year as part of an experiment in minimalist living.

Austin is still weird. It's just more wired now, too.

"We don't want to become Silicon Valley -- we want to be Austin," said Joshua Baer, founder and chief executive of the Capital Factory, launched in 2009 to mentor, finance and support startups and entrepreneurs. "What makes Austin really different, to me, is the culture clash. But it's not a clash. It's the culture collaboration."

There are now more than 138,000 tech-related jobs in the Austin metropolitan region, about 14 percent of the total jobs in the area. Ray Perryman, an economist in Waco, estimated that the tech sector pumps about $31 billion into the area's overall economy, about 35 percent of the total.

It is far from the biggest tech community in North America. In a ranking of the top tech-talent markets by CBRE, a commercial real estate company, Austin came up sixth, behind San Francisco, Seattle, Washington, Toronto and New York. But Austin's brand as a tech hub near that of some of its rivals, including other cities that have a larger tech presence.

"We punch way above our weight class," said Barbary Brunner, the former chief executive of the Austin Technology Council, which was founded in the early 1990s and functions as the tech community's chamber of commerce. "If you're from outside Austin, you think the tech industry here is huge, supersophisticated, supermature. We don't have the innovation leaders here. We have executors here."

The buzz lately does not revolve solely around Apple. A different older global behemoth rarely embraced by hipster tech has become a major player -- the U.S. Army. Months before Apple's announcement, the Army opened a new center in downtown Austin to help modernize its weapons and equipment and to identify, acquire and develop innovative technology.

The Army Futures Command is the only so-called four-star command that is based not on a military installation but in a civilian building, in this case in the heart of the city in a satellite of the University of Texas. The soldiers mostly shun camouflage for button-down shirts and khakis. They have embedded in Austin's tech culture, military officials say, to help make the Army smarter and more cutting-edge.

The leader of the Army Futures Command, Gen. John Murray, a four-star general who also wears casual business attire to work, has been meeting tech entrepreneurs, hanging out at the Capital Factory and recently attended his first Austin hackathon.

"One of the things that we are working on -- and we have not solidified yet, this is just still a concept -- is can the Army work with venture capitalists?" Murray said, adding, "I've probably had, in the last couple months, a dozen or a dozen and a half conversations with [venture capitalists]. For me, it's more about understanding, because this is all new to me. So, understanding the world they live in, what their requirements are, how they can help us and how we can help them."

On a recent Tuesday, the Capital Factory hosted a virtual reality holiday party. Located in an office and hotel complex downtown, the Capital Factory has helped a number of Austinites quit their day jobs to become tech entrepreneurs.

The shared work space features a Star Wars-themed floor with Luke and Leia restrooms, local craft beer on tap and a conference room hidden, Hardy Boys-style, behind a bookcase that swings open when you press the right book -- The Plains of Passage.

"It doesn't matter what you want to do, there are five Meetups at night that will support it," said Tim Porter, 34, the founder and chief technology officer at Underminer Studios. "It's a maker community."

A Section on 12/26/2018

Print Headline: Tech invasion leaves Austin with lot of identity questions


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Archived Comments

  • RBear
    December 26, 2018 at 8:03 a.m.

    Austin is definitely changing in terms of the old culture that made it the Hippie Capital of the South and earned it the moniker phrase of "Keep Austin Weird." But that hasn't changed the progressive nature of Austinites who prefer progressive politics over the conservative brand that emanates from the Pink Dome. Austin is experiencing the growing pains of many tech hubs in the conservative South, including NWA. Those pains will resolve over time, but will take some adjustments by city leaders who may still hold on to the old approaches of the past.
    One of Austin's biggest challenges has been to address transit. An aggressive transit plan pushed in 2014 by Mayor Lee Leffingwell didn't make the cut with voters, losing by 16 points. However in 2016, a similar bond proposal passed with an 18 point margin showing that Austinites needed to "suffer" a little to get the message.
    What Arkansas needs to do is look to Austin, Nashville, and other tech hubs to find that secret sauce of success. Hopefully, Mayor-elect Scott will tap some who've been there to help shape the city moving forward. It's going to take more than a Tech Park to drive the change.