The Impact of Austins Start-Ups - Essay Sample

Published: 2021-08-11
732 words
3 pages
7 min to read
Boston College
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Research paper
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Miniature is growing huge in Austin. Recently, the capital of Texas was named the number one place to start a business in America; the top city for small business vitality; the top city for launching technology start-ups (Long, 2013). But how did Austin city emerge? The economic expansion in Austin is due to high small business start-ups and high tech businesses grounded in a supportive community business model.

The innovation at Austin is stimulated by "innovate Austin" which is an economic development initiative sponsored by the Austin Chamber of Commerce. The main focus of this initiative is to initiate and grow a technology and innovation-based businesses in the region. The initiative provides thought-leadership and strategy to support an innovation community. The focus is increasing capital, attracting and retaining talent, budding and diversifying the novelty ecosystem and leveraging local learning institutions to spur commercialization.

The impacts of the start-ups in Austin are clear. As the corporate America has been on record cutting jobs, the small business start-ups in Austin have increasingly employed more people. According to Hathaway (2014), small businesses in Austin grew by 7% between 2010 and 2013, and it was the leading city in small business start-ups in the entire nation. Also, Austin had the highest number of small business start-ups in 2013 than the other 106 metro areas studied, amounting to 44, 163. It was further reported that gross metropolitan product for Austin between 2011 and 2014 grew by 18.2%, consequently landing it at the second most growing city after Dallas (Hathaway, 2014).

The successful expansion of small business start-ups in Austin is because of the simple model of "creating an environment with the right pieces, involving investors, corporation with the best business schools in the town, incubators, least red tapes, and a vital mass of folks with business ideas and huge aspirations" (Kevin, 2014). The small businesses in the city have a habit of coming together to share ideas and mutually support each other. This allows small companies and local entrepreneurs to share wisdom and resources.

On the other hand, the high tech businesses have also immensely contributed to the growth of the city both in jobs and capital growth. In 2010, $4.35 billion worth of economic activity of the city was from the creative sector, $ 2.0 billion in value-added, over $ 71 million in City tax revenues and about forty-nine thousand permanent jobs (Grodach, 2012). The creative sector has grown at about 25% in the past five years and has resulted in an economic impact on the increasing tourism, expanding high profile events and growing infrastructure of attraction and amenities. Music is the leading output contributor giving $ 582 billion and 5414 thousand jobs. Tourism is leading in creating jobs with about 9, 199 jobs.

Austin's ability to attract high tech entrepreneurs is due to its low operational costs for start-ups as well as accompanying incentives. For example, while entrepreneurs in other cities such as Silicon valley pay up to 271% for basic needs, in Austin entrepreneurs pays only 7% (Seman & Carroll, 2017). Also, the city provides several benefits and incentives for entrepreneurs including no state taxes, lower house costs, a rich local talent for entrepreneurs to high and strong local support (Seman & Carroll, 2017). Consequently, the number of high tech companies that have been attracted amount to 4,700 in 2015 and a $ 1 billion worth of investment in2014 (Innovation in the City of Austin, n.d.).

In conclusion, the supportive community model in Austin is encouraging sharing of resources and wisdom which stimulates small business start-ups and attracts high tech entrepreneurs. Besides, the city offers incentives such as no state taxes to the entrepreneurs to attract them to invest in the city. The innovation in the city is supported by collaboration with business schools and attracting and retaining talent. All these have seen the economy of Austin growing at around 18% measured by the gross metropolitan product.


Grodach, C. (2012). Before and after the creative city: The politics of urban cultural policy in Austin, Texas. Journal of Urban Affairs, 34(1), 81-97.

Hathaway, I. (2014). Tech starts: High-technology business formation and job creation in the United States.

Innovation in the City of Austin. (n.d.). Retrieved November 20, 2017, from

Kevin, j. (2014). Why Austin is the Rocksctar of small-business Cities(n.d.). Retrieved November 20, 2017, from

Long, Joshua. Weird city: Sense of place and creative resistance in Austin, Texas. University of Texas Press, 2013.

Seman, M., & Carroll, M. C. (2017). The Creative Economies of Texas Metropolitan Regions: A Comparative Analysis Before, During, and After the Recession. Growth and Change.

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