Austin’s status as an entrepreneurial powerhouse is known across the nation and the world. Though always on the “nation’s top” lists (Hottest Labor Market in the US – Wall Street Journal 2019; One of the top 10 Global Technology Innovation Hubs – KPMG; No.1 for growth over the last decade – Brookings Institution 2019), Austin was not always the “Silicon Hills” it is today. When I moved here 30 years ago to work for Dell Technologies we were kind of a sleepy town of less than 500,000 people with some tech companies, a large tier-one research university, and a lot of legislators, lawyers, and lobbyists to fill our capital building. We are now a metro of over 2 million people with 150 people moving here every day with an incredible culture and music scene that keeps people staying here and a desirable place to move due to the incredible job market. The history of how Austin became such a stimulating and cool place to live and work is in itself an inspiring story.
Igniting Austin’s Tech Renaissance
The “Grandfather of Entrepreneurship” in Austin, Texas, Dr. George Kozmetsky moved to Austin in 1966 to become the Dean of the University of Texas Business School. He was already recognized nationally as the co-founder of Teledyne, a computer electronics company in Silicon Valley. Dr. Kozmetsky strongly believed in collaboration among government agencies, educational institutions, industry, and entrepreneurs. Acting on his philosophy of collaboration, he launched the IC2 Institute (A Think and Do Tank) in 1977 and the Austin Technology Incubator (ATI) in 1989 and worked tirelessly to promote Austin’s technology and entrepreneurial industry to build what he called the “technopolis”. ATI is now the longest-serving technology incubator in the country and is still as relevant today in this fast-moving economy as the startup scene has changed and grown so dramatically, especially over the past 10 years. To this day through Dr.Kozmetsky’s legacy, his vision stays with us through his founding institutions which continue to advocate for Austin’s tech ecosystem.
Setting the Stage for Innovation
Tracor, IBM and Texas Instruments were Austin’s first powerhouse corporations that set the foundation and path for the city’s future high-tech reputation. Tracor came from a UT research project, specifically out of Balcones Research Park. It was also Austin’s first Fortune 500 company. Following suit, corporations like Lockheed and National Instruments soon also called Austin their home, drawn in by the vast expanses of land, fellow industry leaders and business and engineering talent that came out of The University of Texas at Austin and other world-class universities. Additionally, IBM made it a point to reach out to Austin locals and uplift the women and minority sections of the workforce, working in tandem with community organizations like the East Austin Economic Development Corporation. This initiative brought in more people that went on to create more opportunities for Austin. The positioning, corporate initiatives, and mix of these large, national corporations and homegrown giants like Tracor, Dell, National Instruments, Tivoli, Trilogy, Whole Foods, and many others provided the strong foundation where Austin’s entrepreneurial roots would later take hold.
During the 1980s, Austin’s innovation history got a surge of high-scale science and technology efforts, resulting in a tech boom for the city. Austin would go from a 4 billion dollar economy to a 140 billion dollar economy. In the early 80s when manufacturing companies started locating to Austin there was a general sense in the city of the winds of change that were upon them, and when Governor White was elected, he made it his goal to diversify Austin with investing into research at the universities and contributing to the newly emerging tech economy.
The most pivotal event that put Austin on center stage was the US government’s decision to build a high tech consortium, the first of its kind in America, named the Microelectronics and Computer Technology Corporation (MCC). MCC’s most pivotal event that put Austin on center stage was the US government’s decision to build a high tech consortium, the first of its kind in America, named the Microelectronics and Computer Technology Corporation (MCC). MCC was the nation’s first for-profit computer industry cooperative research and development consortium. Pike Powers, who at the time served under Texas Governor Mark White as his Chief of Staff, helped lead the charge for Austin’s bid. Powers rallied with fellow visionaries like Admiral Bobby Ray Inman and others to pull together 15+ national corporations, a combination of computer and software companies and won the bid for the consortium in 1983. MCC went on to put Austin on the national map as a place to create high technology.
In 1988-89, Austin won its second public-private partnership called Semitech that helped build the large semiconductor sector that we now enjoy including companies like Samsung, Intel, AMD, Applied Materials, Freescale, and many more. Alongside these competitive battles was the emergence of PC’s Limited (now known as Dell Technologies) and the relocation of 3M’s R&D Division to Austin. The confluence of these events along with the emergence of Austin Ventures and a thriving angel investment community set the stage for building a thriving startup community. Today, many of the well known and large technology companies around the world have a very large presence in Austin including Google, Apple, Microsoft, Oracle, Amazon and many more who have opened up large campuses to take advantage of the talent that exists along with the thriving technology community that has become Dr. Kozmetkey’s “Technopolis”. In addition, a third smaller but very significant public-private partnership was created in Austin called “The Pecan Street Project”, a smart grid demonstration project supported by the Department of Energy that has helped Austin become one of the largest “clean tech” hubs in the US on the shoulders of launching the first cleantech incubator in the country in 2001 by the Austin Technology Incubator. Looking forward towards the next ten years, Austin will become a thriving biotech hub on the shoulders of the new Dell Teaching Hospital at UT Austin and the ATI Life Sciences Incubator, utilizing both to build out and improve on the existing ecosystem.
What Starts Here Changes Us and the World
Dr. Kozmetsky’s vision of keeping Austin’s promising talent interested in staying in and growing with the city is realized by the work we have accomplished here at ATI. As a deep tech incubator affiliated with The University of Texas at Austin, ATI serves student and faculty entrepreneurs and community founding teams to explore deep technology solutions that address the world’s challenges. We help our client companies deliver impactful solutions – contributing to The University of Texas at Austin’s promise of “what starts here changes the world.” We are driven by developing new technologies and enabling entrepreneurs to have deep impact on the marketplace for the benefit of our society is a proven ATI heritage. Looking into the future, ATI is committed to being a global leader in deep tech commercialization addressing the world’s most pressing problems. We will continue our foundational commitment to further build and expand the startup ecosystem that Austin is so proudly known for – as a city of innovation and entrepreneurship that fosters the best environment for its economy and citizens.
Austin Technology Incubator (ATI)