BY IAN PANCHEVRE
Silicon Hills News Reporter
Hey there! I wanted to pick up right where we left off, with Part 2.0.5 of Adventures in Austin.
Before things get too hectic, I felt it’d be interesting to explore the economic impacts of South by Southwest and the festival’s role in driving technology growth throughout the Silicon Hills.
It’s no secret that, relative to the rest of the United States, Texas’ economy is looking pretty good. One study conducted by Forbes in 2012 is particularly telling. Forbes used employment data from the Bureau of Labor Statistics to determine the best metropolitan areas for jobs.
The oil and gas industry was a big driver, adding 200,000 mostly high-paying jobs in 2012. Accordingly, 5 of the top ten small cities were in Texas: Odessa (1), Midland (2), San Angelo (4), Lubbock (9), and Laredo (10). Among mid-size cities, Corpus Christi (2), McAllen (3), and El Paso (4) sat on top of the list.
But Texas’ economy is diverse. It’s not just the energy industry, but also manufacturing and technology industries, that are charging full steam ahead. Among the large cities, the metropolitan areas of Houston (2), Fort-Worth (4), and Dallas (6) have all been performing extraordinarily well.
As for Austin? It seems only fitting that the capitol of such a booming economy claimed the #1 spot among large cities nationwide. The Austin–Round Rock–San Marcos region already hosts over 4,400 technology companies that employee over 109,000 people.
And yet, the regional technology sector continues to grow, providing more and more high-skilled and high-paying jobs. 5,500 new technology jobs were added in the first three quarters of 2012. The technology ecosystem now accounts for 11.7% of all regional firms, 13% of all regional jobs, and 27% of the entire regional payroll.
What does SXSW have to do with all of this? Perhaps more than you think.
For one, there are the tangible benefits of hosting such a vibrant and popular festival. Each year an economic assessment of SXSW is conducted. Not surprisingly, expenditures skyrocket during the two weeks – all those people need to eat, sleep, move around, and party. In 2012 SXSW pumped more than $190 million into the local economy – representing a 12 percent increase from 2011.
And then there are the intangible benefits.
“An unquantifiable benefit comes from the opportunities that South by Southwest affords the local community,” explains Susan Davenport, Senior Vice President of Global Technology Strategies for the Austin Chamber of Commerce. “It presents a huge opportunity for talent and capital formation.”
Businesses coming together – via a convergence of talent and capital – is certainly important for the region. But one can argue that a full list of benefits associated with SXSW is even more abstract.
“The festival has helped position Austin in national and international light as a leader in innovation,” continues Davenport. “Some of the companies and early product announcements that have originated over the past few years at South by Southwest have given it an even better reputation.”
Over the two decades that Interactive festivities have been featured, the list of companies that have taken off at SXSW is impressive. Most recently, Twitter (2007), Foursquare (2009), and Instagram (2011) either launched or gained initial traction at the Interactive Festival.
Certainly, the emergence of popular consumer technologies reinforces the relevance of SXSW – and the contributions of Austin – in the eyes of the general public. But SXSW is more than just a laboratory for early stage startups and their flashy, social apps.
“We’re seeing expansions in clean tech and biosciences… as the festival continues to grow, more of the corporate world is trying to be a part of it,” notes Davenport.
To its credit, the Austin Chamber of Commerce is playing its part in supporting SXSW. Recognizing an opportunity to place Austin tech at center stage of an event with a global audience, the Austin Chamber approached SXSW with a partnership proposal a few years back.
Davenport explains that the Chamber’s goal, as integrated into the festival, “is to showcase relocation opportunities to executives and encourage investment in companies that are starting in Austin.”
SXSW welcomed the partnership.
“We then began to plan very specific events and initiatives that we thought furthered our goals,” Davenport continues. “With the amount of new jobs the industry is creating, we think it’s been very effective.”
For SXSW 2013, those events include : A Celebration of American Startups (Saturday, 7:00 PM – 11:30 PM at The Moody Theater), SXSW Startup Village (Saturday and Sunday, all day at the Austin Chamber offices), and a ‘Welcome to Austin’ Tradeshow Exposition (Sunday through Wednesday, 11:00 AM – 6:00 PM at the Austin Convention Center).
All things considered, SXSW is a big reason why Austin’s technology ecosystem continues to blossom. “Austin’s business reputation, coupled with an attractive quality of life, and a strong Texas economy – all those things come together in a perfect storm at South by Southwest.”
Certainly, Mrs. Davenport was referring to a metaphoric storm. But it may turn out to be rather literal at SXSW 2013, as the weather forecast includes rain and thunderstorms over the weekend.
Stay tuned for the next segment in Adventures in Austin…