The project exemplifies the many research and development projects that have transformed Austin from strictly a government and university town into a high-tech mecca.
Finding Its Way
John Crowe, spokesman for IBM, said the new center is open but is still in the extremely early stages.
"This is the first step of many," Crowe said. "It's here, [but] it's not like we had somebody create a new building and throw a bunch of people in there. [The center's lead engineer] is tapping into the resources across the IBM network, as well as with partners and customers who either are using our UNIX servers and AIX operating systems or have expressed interest."
The AIX Collaboration Center is largely a virtual center that connects experts from IBM's seven other research centers. The investment represents mostly equipment, according to IBM.
Crowe said the center is a new section of IBM's massive Austin Research Laboratory (ARL), which arrived in 1995 to explore microprocessors, emphasizing fast circuit families and computer-aided design tools to support complex and high-performance microarchitectures. Now the ARL employs 6,200 Texans and produces more patents than any other of the company's research laboratories worldwide. Crowe said the new addition to the laboratory represented a long-term investment for the company.
"We're building a plan that's not two years out, but it's five and 10 years out. We'll continue to tune and assess it as we move forward," Crowe said.
IBM emerged as a major employer in Austin during the late 1970s and is now tightly woven into the cultural fabric of the city.
"I am the son of an IBM employee," said Matt Curtis, aide to Austin Mayor Will Wynn, noting that Austin residents frequently bump into other IBM families.
The Road to Mecca
David Porter, senior vice president of economic development for the Greater Austin Chamber of Commerce, said the city currently entices other technology companies to locate in Austin with property tax incentives, but mostly with its native technology work force.
The University of Texas and neighboring Texas A&M University supply a dazzling crop of professionals, which inspired the Greater Austin Chamber of Commerce's marketing slogan, "Austin - the human capital." Porter said one-third of Austin-area alumni, roughly 600,000 people, live and work in Austin.
But the city's technology boom during the 1990s had little to do with government policies, which were chronically unfriendly to businesses at the time, according to Porter.
He said the city was simply a naturally good fit for technology. Austin-area universities boasted impressive research projects and convenient partnering opportunities for technology companies. Inexpensive land prices also enticed them to Middle America from exorbitantly priced locations like San Jose, according to Porter.
"As technology became more and more of a driving force, companies began to look at locations around the country where they could attract and retain talent. Austin became known for that," Porter said.
Things Fall Apart
The technology decline of 2000 put the Austin economy in dire straits, even forcing the city to close down public pools and limit operation hours for libraries and other government facilities.
"We lost 34,000 great-paying jobs within a few years, beginning in late 2000," Porter said.
In May 2003, voters elected Will Wynn mayor, and he enacted conditional property tax incentives for existing and prospective companies.
Chicago tried to entice Freescale Semiconductor Inc., a massive employer in Austin, into relocating to the Windy City. Wynn persuaded the company into staying
with new tax breaks, but he attached benchmarks to his tax incentives.
"We aren't just giving away money anymore like [previous administrations] had in years past," Curtis said. "Now we're working really hard to set benchmark goals, where if we do offer property tax breaks for companies, they have to meet a very rigid series of requirements - hiring locally and working with us on other benchmark goals that really benefit the community. Smart investment like that has helped these companies want to come here or the companies that were here want to stay and expand."
Curtis said the mayor faced angry community organizations who opposed tax breaks for big companies. But the mayor's office hammered home the simple message that Austin's rapidly growing population needed good-paying jobs. The prospect for economic development from those tax breaks eventually won the public debate, because citizens foresaw their jobs vacating Austin for more business-friendly destinations, said Curtis.
Porter credited Wynn's policies with making Austin dramatically friendlier to business.
"[City Hall now has] a policy for granting incentives," Porter said. "They did not have an economic development professional at City Hall before. Today they do. They are very engaged with our recruitment efforts."
Porter said 2004 was the first year in three years that Austin gained jobs.
"We ended [2004] with more than 16,000 new jobs, and for 2005, the preliminary numbers are more than 14,000 new jobs," Porter said. "Our goal is 72,000 new jobs by Dec. 31, 2008."
Technological Tunnel Vision
Austin is looking beyond semiconductors and software to end its dependence on those industries. The automotive industry is appearing near the city, with Toyota building a truck manufacturing facility in San Antonio, 84 miles away. "Within that magical 100-mile radius, automotive suppliers are locating," Porter said. "Those are good-paying, high-tech manufacturing jobs." Porter said the Greater Austin Chamber of Commerce also targets medical device and wireless broadband industries.
Austin actively seeks the alternative energy industry - this from a state legendary for a somewhat less-than-alternative fuel. "[Earlier this year] in Washington, D.C., we launched a major national push for plug-in hybrids - that whole initiative started here with us," Curtis said. Mayor Wynn helped to launch a national campaign in January encouraging car manufacturers to mass-produce plug-in hybrid cars. The campaign was based on a 2005 grass-roots movement in Austin that collected more than 11,000 signatures from local citizens and more than 600 soft orders from local governments and businesses for plug-in hybrids. "We try to reward and expand on our opportunities for wind and solar and other clean or renewable energy. One of the mayor's favorite quotes is, â??I would rather see our Texas cars running on west Texas wind than Middle East oil.'" Curtis said Wynn even met with country singer Willie Nelson to discuss Nelson's bio-diesel initiatives. Nelson is co-founder of the Willie Nelson Biodiesel Co., an organization marketing a brand of bio-diesel fuel called "BioWillie" to truck stops nationwide.
Quality of Life
"Austin really is one of the most spectacular places in the country. We have been in the top five or No. 1 in almost every list that comes out, whether it be â??best place to live and work as a single,' or â??best place for Hispanics' or [any of] the other hundreds of different lists that come out," Curtis said. "We have a great school system, and even though we double in size, like clockwork, every 20 years, we're at 703,000 people - still not that big of a city."
John Crowe said technology professionals often work in Austin because they don't want to live in New York or on the West Coast. Mild weather, a casual business environment and a widely heralded entertainment scene attract young technology employees.
Porter also said the digital media industry thrives in Austin.
"Those are young talented people who want to work all sorts of odd hours," Porter said. "They go running and hiking, for lunch and dinner, and then work till three in the morning."
Curtis said IBM has been an active neighbor in Austin, frequently contributing to community events and informing City Hall of its workings. It also offers telecommuting opportunities and off-peak work hours with various shifts, pulling cars off highways at peak hours.
"We want to make sure that employers are a good fit for Austin," Curtis said, later adding, "It's easy to woo somebody with a little bit of a tax break, but the minute they come to Austin, they definitely will fall in love. It's a great place to live, work and play."
