The news keep on piling in: businesses flocking to Austin / Round Rock. There is a definite exodus from California into the Austin / Round Rock area. This influx of intellectual power, innovation, and creativity mixed with the business friendly environment that only Austin / Round Rock can deliver will make the region an international powerhouse to be reckoned with. The latest news come from Statesman.com:
When most people think about high-tech economic centers where brilliant innovations occur, they probably think of Silicon Valley, a hub of entrepreneurial startups, where 32 percent of U.S. venture capital dollars flow. But this week, innovation is on display in full force at South by Southwest as cities like Austin stand poised to take the title right out from under Silicon Valley’s nose.
Many have reported on the grand exodus from California as business leaders and entrepreneurs look for friendlier business climates to continue their creative pursuits. As the exodus continues, it’s becoming increasingly clear that Texas, and Austin in particular, are reaping the benefits of California’s economic malaise.
Texas Gov. Rick Perry has made it a priority to recruit companies and make the case for why they should relocate to Texas. His efforts have included traveling to California to meet with business leaders and voicing radio spots in the state, highlighting the benefits of doing business in Texas. Tech giants like Facebook, Apple, Microsoft, AT&T and Samsung have started putting down roots in the Lone Star State.
In my short time spent here this week, I see why so many in my industry are choosing Austin as their business destination, and why Texas is home to half of all the private sector jobs created over the last decade nationwide.
For starters, Texas gives out more incentives than any other state, about $19 billion a year, with Austin incentivizing businesses to the tune of $14.2 billion since 2007. One of these efforts is the Texas Enterprise Fund, which has awarded more than $410 million over eight years, and is expected to create more than 54,000 jobs. Another incentive program establishes enterprise zones where companies can receive tax refunds for relocating there.
But no solution is purely governmental. Businesses have to step up to the plate as well, and private companies in Austin are leading the charge. Business incubators are a popular support system that encourage young startups and serve as a security blanket to help early-stage companies as they begin their entrepreneurial path. For example, Austin-based Incubation Station encourages startups to apply for a mentorship program where young companies can get the tools needed to grow and move out of nascence and into prosperity.
Austin is also attractive to tech startups because of its tax structure, regulatory environment and cost of living. Research shows that states without income taxes enjoy higher growth than neighboring states that levied the tax. Moreover, Texas’ cost of living is 42 percent less than California’s.
As a result, Texas is seeing a rise in population, income and gross domestic product growth. Meanwhile, California was recently ranked as the fourth worst state in which to conduct business because of an increasingly poor regulatory climate. Instead of dealing with government largesse and restrictive red tape that stifles innovation, many business leaders are just leaving in favor of greener pastures, like Texas.
No doubt, California’s physical climate will always make it a hotspot destination. But the state’s “land where dreams come true,” days might be slowly waning as legislators and regulators continue to hamper the breakthrough innovations that come out of the Valley. As more entrepreneurs and business leaders recognize the endearing qualities of Austin, this booming city only stands to win from California’s loss.
Entrepreneurs, dreamers, and all other trailblazers, we welcome you. If you have a vision, then we can help you make it a reality with any of the suites and virtual offices that we have.
