Austin is set to become America’s next tech capital
Investment3 Minutes Read

Austin is set to become America’s next tech capital

February 23, 2022 Share

Austin, Texas is known for its vibrant live music scene, authentic BBQ and all-around quirky vibe. “Keep Austin Weird” is a common mantra adopted by the Austin small business community.

The city, which is in the middle of a several-year tech boom, is poised to become America’s next big tech town with companies and workers from the industry shifting to the city.

Elon Musk stands in front of a white Tesla. He is reportedly living in Austin.
Tech billionaire Elon Musk has reportedly moved to Austin.
Credit: Maurizio Pesce

Tech-guru Elon Musk has reportedly taken up residence in the city, where Tesla is building a new giga-factory. He told The Economist that Austin will be “the biggest boomtown that America has seen in 50 years.”

A partially constructed building, Tesla is building its new giga-factory in Austin.
Tesla is constructing its new giga-factory in the City.
Credit: Larry D. Moore

Tech giants Oracle and Hewlett-Packard have also announced they will be moving their headquarters to the capital of the Lone Star State.

The companies are likely drawn in by Texas’ taxes, which are considerably lower than their counterparts in California. California has an 8.84 per cent corporate income tax while Texas has none.

For tech workers, the move to Austin also makes sense. The cost of living is significantly lower in Texas than in California and Austin can provide the children of tech-workers with a quality education. Residents will also benefit from Texas’ low taxes — Californians pay up to 13.3 per cent state income tax while Texans pay nothing.

According to LinkedIn data, Austin has the highest influx of tech workers of any American city in the 2020/21 financial year. On the other hand, San Francisco, home of Silicon Valley, had the most tech workers leaving the city.

The San Francisco skyline at sunset.
America’s traditional tech town, San Francisco, is seeing workers leave due to the high cost of living and rent. Credit: Unsplash

One of the city’s main perks is Austin’s booming music and cultural scene, which makes the city an extremely attractive place for millennial entrepreneurs and tech workers alike.

The city also holds the annual South by Southwest conference and music festival which brings together entrepreneurs and artists alike. The festival has been cancelled for the last two years due to the COVID-19 pandemic but is scheduled to take place this year in March.

South by Southwest music festival, with the Austin skyline in the background.
South by Southwest holds several festivals, including a music festival, in Austin every year. Credit: South by Southwest PR.

Austin also is home to the music festival, Austin City Limits. The city has been called the Live Music Capital of the World since the early 1990s when people realized the city had more venues per capita than anywhere else in America.

The boom has had some drawbacks, however, and the cost of living in Austin has begun to rise.

A sign which says "Cheap BBQ ain't good and good BBQ ain't cheap!"
Austin, Texas, which is known for its BBQ, is facing rising living costs.
Credit: Unsplash

Premier tech city San Francisco has a notoriously high cost of living with rent prices higher on average than New York City. Austin, however, is beginning to catch up and, according to Zillow, housing prices have gone up approximately 41 per cent in the last year.

Still, from the numbers, it is clear that people in the industry are still willing to make Austin their new home.

Author: DDW Insider