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The Californians Are Coming, the Californians Are Coming

This story was written by Terrence Henry and was published on kut.org on 07/20/15.

Austin’s ‘Most Invasive Species’ Isn’t the One You Might Think

Central Texas is under attack. No, not Jade Helm, or even the summer swarms of mosquitoes. We’re talking about an invasive species. Zebra Mussels? Nope. Fire ants? Try again. We’re talking about an even more supposed “invasive” species: Californians.

They arrive with their telltale license plates, often heading straight to In-N-Out Burger and Trader Joe’s. As Austin continues to grow at a rapid pace, plenty of anecdotal blame has fallen on people moving here from California. Except … they’re not?

Turns out the net total of Californians moving to Travis County each year is only about 1,000 people.

“So, in a county that’s 1.1, 1.2 million people, that is a tiny, tiny, almost unnoticeable portion of the growth here. You know, in overall terms, it’s a very, very insignificant driver of population growth,” says Brian Kelsey, a principal with the economic research and planning firm Civic Analytics.

Kelsey looked at the most recent numbers available (2008-2012) from the Census Bureau and IRS to see where people are moving to Austin from. Of the people that move here from out of state, about one in seven is from California. But more than half of the people moving to Austin aren’t even from out of state — they’re from Texas. (You can read the full analysis at Civic Analytics.)

“Sixty percent of the people moving to Travis County come from other parts of Texas. So yes, the majority of people who move here every year are from another county in Texas,” Kelsey says.

So, if you want to blame someone for moving to Austin, you’ve got to start with Texans first.

Using Interactive 3D Models For Urban Planning

This article was written by Nathan Brigmon and appeared in 3D Visualization World Magazine on 06/22/15.

Using Interactive 3D Models For Urban Planning

The City of Austin, Texas is using 3D models for urban planning. These models provide the city with an effective and interactive visual approach that results in improved research and decision-making for urban planners. Civic Analytics, an economic research, planning, and consulting firm based in Austin applies this technology which has been used to enhance discussions around height restrictions, set backs, density, and also poor development decisions that may have been missed in previous maps.

Online 3D modeling has made great strides in recent years by showing its power to aid in the research and decision-making of urban planners. While it still doesn’t have quite the buy-in many would hope, web technologies have made great improvements thanks in part to demands in both the gaming and architecture industries. Some companies have been combining efforts of the two fields to create useful civic engagement tools. Civic Analytics has been utilizing ESRI’s CityEngine to show how the modeling of future landscapes and cities can play an iterative role in generating better public feedback and improved data analysis.

Background

In the spring of 2014, the City of Austin working with the University of Texas at Austin (UT) and Civic Analytics set out to measure the economic impacts of building urban rail through the heart of Austin, Texas. The purpose of this analysis was to aid in City Council’s decision to place the initiative on the ballot and also to better inform the public during its potential November vote. The idea of urban rail in Austin had failed before, but many felt it was shot down for the wrong reasons and without proper consideration. In addition to being a smart planning approach to rail, many thought by bringing more data and answering better questions, a more informed populace would lead to a more suitable outcome.

Project Connect Answers

The question to answer in the economic impact analysis was simple: In the future Austin corridor, what happens if you build rail and what happens if you don’t? As urban planners, we were interested in the effects of new development, especially on its impact to land value. We were also interested in finding other differences such as changes in property tax revenue, walkability, water use per household, and a range of other indicators between the two scenarios.

The Analytical Process

Fig 1 – The corridor area for our economic impact analysis

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fig 1 – The corridor area for our economic impact analysis

To measure differences, we started both scenarios with the same base year. We then added projected population and employment data based on transportation impacts provided by a transportation research firm.

Next, we looked to the year 2030 as our comparison year. After adding the transportation impact data, we had a gap between our two scenarios we were now calling “2030 Build” and “2030 No Build”.

Our next step was to add building prototypes with unique data for people, jobs, water use, property value, etc. The route where we would place our building prototypes spanned 9 miles with a buffer of a ½ mile.

Our goal was to add buildings until the cumulative impact of those buildings’ attributes for people and jobs met our projected numbers.

In other words, we were filling in the gap with actual development. Each building was vetted for accuracy and local appropriateness including form, taxable value, and height. Our building library consisted of over 80 individual models with a variety of attributes.

Some of the attributes considered things like people her household, water use per household, and site area impervious cover. So, we were constructing a future where we could measure a number of impacts ranging from household level to citywide.

The software used was ArcGIS and Envision Tomorrow. ArcGIS is well known in the geographic information systems field for approaching any task that deals with spatial data and maps.

Envision Tomorrow is a popular open source scenario planning tool that allows planners to measure land use impacts based on building inputs. It runs within ArcGIS and creates a variety of useful outputs. To sum up the technical piece, we added building data to parcels in ArcGIS and Envision Tomorrow showed us the results.

The workflow for the analysis was a back and forth process intended to calibrate the model and improve accuracy. Researchers from Civic Analytics and UT would run the analysis and then pass the results on to UT professors and a Citizen Advisory Group for feedback.

Once feedback was received, the researchers would take this feedback, recalibrate the analysis, and pass the results back for more feedback.

By the deadline of the analysis, our model would have been tried and tested over and over. At least, this was our goal in theory.

Generating Feedback

When looking to the future you are always going to make assumptions. The best way to improve the accuracy of a future model is to come to an agreement over those assumptions.

Our original process for challenging the model was to use maps to show the land use changes and development impacts. This works great in theory, however, we were working with a non-technical citizen committee and an extremely large dataset, so we ran into a few issues.

First, we had the issue of complexity. Each mapped corridor of our analysis involved using over 25-30 building types. This meant we had an extensive legend that became hard to interpret. It also meant we were potentially overwhelming our non-technical audience.

Second, we had the issue of form. Showing building impacts by adding them to parcels mean we lose the opportunity to examine density and height. This is of course a natural limitation to many two dimensional visualizations.

Fig 2 – An early draft map showing the extensive legend, which creates data complexity.

Fig 2 – An early draft map showing the extensive legend, which creates data complexity.

To be fair, this did not mean we had no feedback, but there was much to be gained as we found with the introduction of our 3D modeling tool, CityEngine.

Enter CityEngine

The 3D component of the project didn’t have a lot of buy-in from management at the initial stages of the project. It was actually referred to as “a bell and whistle” as some couldn’t visualize a 3D model benefiting an economic development process. However, after the first round of modeling, it quickly proved to be a very useful tool.

CityEngine is a 3D modeling software originally built for creating city landscapes very quickly and with mass randomization. ESRI bought the software in 2011 has worked to better integrate it into the GIS world, which means getting it to focus less on randomization and more on real world infrastructure. Since CityEngine has yet to cross that threshold into seamless integration, I had to take some interesting paths to create the model, but it was well worth it.

First, since we were adding building data to parcels, I needed a method to create building structures from those same parcels. So, I wrote a python script to read the land use data of the parcel and then split it based on the attributes of the building site’s area. Next, I wrote a CityEngine script to add setbacks and height according to the building’s attributes. The next step was to apply this to every single building throughout the 9-mile corridor. Using the iteration power of CityEngine, I was able to apply my code in seconds!

The result was two models that represent the visual impacts of a build and no build scenario. However, this only got us part way to our model since in this current form it only existed on my computer. The next step was to use ESRI’s cloud service to share this model online with the public. So, I uploaded the model and now could share not by file but by link.

Fig 3 – ESRI’s ArcGIS Online provides cloud storage for 3D CityEngine models

Fig 3 – ESRI’s ArcGIS Online provides cloud storage for 3D CityEngine models

At our next meeting, we had discussions around height restrictions, set backs, density, and also poor development decisions that may have been missed in previous maps. We were also able to remove the color scheme thanks in part to the interactivity of the model. If someone had a question about a particular building use or purpose, we could select the building and learn more information.

Fig 4 – Having the option to interact with buildings aided feedback discussions

Fig 4 – Having the option to interact with buildings aided feedback discussions

The data became less complex, and therefore easier to ingest and interpret for errors. For example, as a researcher I had little knowledge about local neighborhood master plans that had height restrictions.

Another great feature from CityEngine, is the ability to compare both Build and No Build datasets side by side and use the “swipe” tool. Instead of putting two maps side by side, the swipe tool allowed us to spot differences in a much more intuitive fashion.

Fig 5 – The swipe tool empowers users to visualize data side by side

Fig 5 – The swipe tool empowers users to visualize data side by side

Finally, since the model exists in the cloud, it can be visited by anyone during his or her own free time and not during scheduled meetings or within short time frames. This gives people time to digest and revisit things they feel might have been overlooked. After our first meeting with the model, it was clear that it had been a success, but it’s important to understand that it was not being used as a finished product but as a tool to generate feedback and improve the analysis. As we moved on to our next iteration, we had better feedback and also a new understanding of our new 3D modeled dataset.

Next iteration

For the next iteration, we decided to add some texture and life to the model. In addition to some of the changes made from our last round of feedback, we added rail cars, terrain, and building form.

Fig 6 – A view of the finished transit stop

Fig 6 – A view of the finished transit stop

This allowed us to put ourselves in the potential transit corridor and question assumptions about how we got there. Again, the model is not a finished product but a means to interact and inform. It became clear to the research team that this tool had a lot of potential and its future was bright. For a full look at the model, visit it in ESRI’s cloud.

Future uses

As CityEngine and other interactive 3D modeling software gain acceptance, we will begin to see them used more and more. At conferences, ESRI is famous for incorporating Oculus rift into their 3d web models and allowing users to run around and even fly through new developments. Is there a better way to get feedback than placing an individual inside a model and enveloping their senses?

Also, as mobile technologies improve, some companies are taking this idea to our cell phones. Both Google and InsiteVR have created 3D technologies that enable you to iterate through cities and other worlds to explore and also play via a mobile device.

From an urban planning standpoint, this technology is a game changer. Imagine local governments voting on new development corridors with the power to model impacts at the click of a mouse or swipe of a screen. It simplifies discussion and empowers anyone to be able to view future changes and how it could potentially affect them.

In my opinion, as 3D technologies gain momentum, it will become as expected to have a 3D model during master planning projects in the same way 2D maps are considered a requirement today.
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Nathan Brigmon is an analyst at Civic Analytics, an economic research, planning, and consulting firm based in Austin, TX. He specializes in 3d modeling, GIS, and data analysis.

Migration Matters: Is California Ruining Austin?

A recent article over at Do512 reminded me to check for new migration data from the IRS, and, unfortunately, we’re still waiting on 2012. While we wait, here’s a refresher course on the extent to which we can blame California for worsening traffic, rising home prices and rents, or any of the other consequences of Austin’s growth and economic success.

Data Challenges

There are many. The two most commonly used sources of data on migration are the U.S. Census Bureau’s American Community Survey (ACS) and tax records from the IRS. ACS estimates are derived from samples and therefore have margins of error to deal with, and IRS data excludes people who don’t file taxes. Both have considerable time lags, and are subject to regular attacks by free-dum loving politicians, jeopardizing future availability. ACS provides summary statistics for how many people move in and out of cities, but not much on specific origins or destinations. IRS provides county-to-county looks, but nothing for cities.

So, the best we can do to get a handle on the impact of migration from California to Austin (city) is to use ACS and IRS data and look at Travis County. Hopefully one day we will find a client to foot the bill for exploring the reliability of migration data from private vendors, or perhaps even collect our own primary data for Austin, but for now we are limited to what’s available from public sources.

Interpretation Challenges

This is different from challenged interpreters, who are usually politicians and boosters emphasizing move-ins and neglecting move-outs. Believe it or not, people do actually decide to move away from Texas, and, yes, even Austin. Interpretation challenges include things like boomerang migration–e.g., somebody moves from San Francisco to Austin, toughs out two summers here while developing a newfound appreciation for BART, and then moves back to San Francisco. That person shows up in the data as one “Californian” moving to Travis County and then one “Austinite” moving to California. Or, to complicate even further, make that person an Austin native who moves to San Francisco, can’t find acceptable brisket or $2 Lone Star anywhere, and then moves back to Austin. He shows up in the data as a “Californian” moving to Travis County, when, really, the two moves should cancel each other out, at least in how we commonly perceive and talk about migration’s impact on Austin.

Same goes for what Ryan Robinson, City of Austin’s demographer, calls “two-step” migration. Suppose somebody moves from San Francisco to Dallas and then the following year to Austin. She shows up in the data as a California transplant to Dallas County in year one, but then as a Texas transplant to Travis County in year two. She may even still have California plates, but, according to the data, she’s a Texan.

And there are other limitations to be aware of. For example, IRS migration statistics are reported in tax terms–i.e. number of returns and exemptions as reported on tax filings, not households and people. Most researchers use returns as proxies for households and exemptions as proxies for people, but they are not one-to-one comparisons (e.g., a married couple filing separately can be two returns but one household). Further, the IRS goes to great lengths with statistical procedures employed to maintain confidentiality. Consequently, there are missing values, especially for small and rural counties.

While you may feel perfectly comfortable drawing conclusions about how wealthy your new neighbor from California is by looking at home prices on Zillow or TCAD, being able to derive her household income from IRS migration data would be bad. We can’t track movements of unique households or individuals over time, either, just in aggregate snapshots, which makes migration analysis difficult but keeps the purveyors of freedom in Congress at bay.

The Californicators (I miss John Kelso’s regular column)

How many Californians are invading Austin? Somewhere between approximately 58,000 (IRS) and 81,000 (ACS) people moved to Travis County from another county in the U.S., on average, per year during 2008-2012. Roughly 60% of those new residents in Travis County came from some other county in Texas. The estimated number of people moving from California to Travis County annually between 2008 and 2012 ranged from approximately 3,800 (IRS, 2011 reporting year) to 4,400 (ACS). So that means California was responsible for about 15% of the 24,000 (IRS) to 29,700 (ACS) moving to Travis County from outside Texas on average per year during 2008-12.

California is, by far, the most significant “donor” state of residents to Travis County, but still pales in comparison to the number of people moving here from other parts of Texas. Further, California doesn’t make up anything close to a majority of people moving to Travis County from other states–for every seven people you meet who have moved here from another state, only one of them is likely to be from California.

Now, what happens when we account for people moving out of Travis County? Estimates for people moving out of Travis County to another county in the U.S. ranged from approximately 50,900 (IRS) to 69,000 (ACS), on average, per year during 2008-2012. Travis County usually breaks even, more or less, with the rest of Texas–i.e. the number of people moving in to Travis County from another county in Texas is roughly equivalent to the number of people moving out of Travis County to another county in Texas. That can change in some years depending on local economic conditions, but over the long term and looking at both IRS and ACS data it’s roughly a stalemate, with Travis County gaining at most 1,000-1,500 people per year.

Net migration (move-ins – move-outs) from other states is more of a factor in Travis County’s overall population growth. Travis County gained, on average, somewhere in the range of 8,505 (IRS) to 9,200 (ACS) people per year from other states during 2008-2012, including approximately 1,000 (ACS) to 1,400 (IRS) from California. To put that into perspective, average attendance at an Austin Aztex home game is 2,687. So, using the high end of the range, the number of people Travis County is gaining (net) from California every year is equivalent to about one-half the number of people you will find at an Aztex game. Not exactly what I’d call a population “driver.”

Well can we at least blame them for rising home prices?

Sadly, this, too, is problematic, or at least unclear. Using the IRS migration data (2011), adjusted gross income per return (household) for people moving from California to Travis County was $78,384, well above the $67,118 for existing Travis County residents (non-movers), but well below some other states.

Illinois, for example, sends one-third as many people to Travis County as California, but adjusted gross income per return for Illinois transplants was nearly twice that of California ($148,173), according to IRS data (2011). In fact, people moving to Travis County from seven other states had higher adjusted gross incomes per return than people moving to Travis County from California that year. While the aggregate impact of more Californians with higher than average incomes moving to Travis County may outweigh the impact of other, even higher income states with fewer transplants, Californians are not the wealthiest people moving here, at least on average.

Visit Census Flows Mapper for breakdowns of migration by income, race/ethnicity, educational attainment, employment status, and more. Perhaps you can even shed some light on the reported “mass exodus” of Austin residents.

Governor, business groups at odds on Texas Enterprise Fund

This story was written by Marty Toohey at the Austin American-Statesman.

Governor, business groups at odds on Texas Enterprise Fund

At a recent round table session with reporters, Gov. Greg Abbott talked of his plans to travel abroad and lure businesses to Texas. He mentioned a cut in the state’s franchise tax, emphasized a new program to lure academics whose research could spur economic activity and concluded that “Texas is an easier sell today … than it has ever been.”

He talked relatively little about the Texas Enterprise Fund, the largest tax-incentive program of its type in the nation, which former Gov. Rick Perry persuaded the Texas Legislature to create as the state’s deal-closing program. When asked about the enterprise fund at the round table, Abbott said, “I don’t like this specter of picking winners and losers,” and he went on to emphasize that it will only “be used for purposes of closing a deal.”

It’s not as if the Texas Enterprise Fund is about to disappear. It didn’t suffer the fate of the state’s Emerging Technology Fund, which was abolished this year as part of a plan to emphasize attracting high-powered academic research to Texas. And Abbott did get the $90 million over two years he requested for the enterprise fund – from a Legislature that had floated proposals of as little as $30 million.

Still, the final amounts were far less than much of the state’s business lobby had sought.

“We’re going to lose out to other states and countries” in attracting business, said Tony Bennett, president of the Texas Association of Manufacturers. “What we’re seeing is an assault on economic development tools.”

The enterprise fund was established in 2003 at the behest of Perry, who said that Texas, despite a low tax burden overall, was up against states that would offer rich packages to lure big businesses and jobs. The Legislature put $285 million into the program for its first two years, in 2004 and 2005. Since then, appropriations have risen and fallen, depending on how much had gone unspent and various political considerations. In the first two years, Perry struck nearly $280 million in deals; in 2008-09, the program resulted in $33 million in new deals; and in the 2014-15 biennium there have been $82 million in deals,according to the state.

Since its inception, the program has resulted in a total of $575 million in deals. That averages to roughly $52 million spent per year, compared with the $45 million the Legislature just agreed to award the fund annually over the next two years. Criticism of the program led to a new oversight board, but one that only analyzes deals after the fact, as many business-promotion groups wanted, and isn’t involved with the negotiations, which remain with the governor’s office.

But the funding in this year’s session fell well short of the $200 million that business lobbyists say the state should be putting into the program.

“Despite tremendous job creation in the last six years, we are mindful that Texas lost 25,000 net jobs in March 2015,” according to a letter from 77 chambers of commerce, think tanks and other business groups. “As Texas’ economic growth moderates, the importance of recruiting blue chip company relocations and expansions grows.”

The letter goes on to note that a single deal can cost $40 million, as one agreement Texas reached with the Sematech semiconductor consortium in 2004 did, and as the one the state struck to lure Toyota’s corporate headquarters to Plano did. The Enterprise Fund also promised about $30 million to Apple Inc. in 2012 to help lure the technology giant to build its Americas Operations Center in Austin. Apple promised to create 3,600 new jobs in Austin over 10 years as part of that deal.

Even the perception that the fund is flagging could hurt the state, said Drew Scheberle, a Greater Austin Chamber of Commerce senior vice president.

“How many deals do you lose out on, if people don’t even think to pick up the phone and call you?” Scheberle said.

Some other states, including North Carolina, have also grown increasingly skeptical of incentive packages, said Brian Kelsey, an economist who runs the Austin-based firm Civic Analytics.

“We’ve outgunned every other state in the incentive war, and there’s no question that the enterprise fund has made a difference in some location decisions,” Kelsey said. “The enterprise fund can swing a deal, but it can’t make it. Any deal contingent on the enterprise fund to ‘make the numbers work’ for the company is not one you want to be on the other side of a contract with.”

Though the highest-profile of the state’s incentive programs, the enterprise fund wasn’t the only program that was funded below where business groups wanted. The Moving Image Industry Incentive Fund was cut by two-thirds, to $32 million, according to the Austin chamber. That level of funding led Bill Hammond, CEO of the Texas Association of Business, to say: “We’ve diminished our ability to compete … you have other states that give away the house.”

Most DWI Arrests Occur in Central, East Austin

This story was written by KUT Staff and appeared on the KUT website on 06/01/15.

Most DWI Arrests Occur in Central, East Austin

There have been at least 41 traffic fatalities so far this year in Austin, which is nearly double the number during the same period last year. And, in many of these crashes, alcohol and impaired driving are factors. A new analysis of DWI data is providing a better picture of where the problem spots are.

Over the last decade, there have been nearly 200 deaths in Austin due to drunk driving. A new analysis by Civic Analytics shows suspects in 724 of the 6,033 DWI arrests live in District 3, which includes East Austin and parts of South Austin.

“So the majority of the arrests, for the home addresses, happened on the East Side,” says Nathan Brigmon of the research firm Civic Analytics, which conducted the analysis.  “And the district that has the most is District 3. District 3, for example, is 17 percent of all DWIs. District 2 is 14 percent. District 4 is 13 percent.”

This map shows the number of DWI arrests per district.

This map shows the number of DWI arrests per district.
Credit MobilityATX

So, nearly half of the people arrested for driving under the influence in Austin live in the districts with the lowest incomes and highest levels of poverty and unemployment.

The arrests themselves are mostly happening downtown, on East Riverside and in North Austin. The analysis was conducted as part of Mobility ATX, a new initiative aimed at making transportation in Austin more efficient and safe.

A heat map showing the areas with the highest number of arrests for drunken driving.

A heat map showing the areas with the highest number of arrests for drunken driving.
Credit Mobility ATX

The analysis suggests the DWI-prone corridors shown on the heat map above could be a product of frequent drunken driving, or that police officers frequent “corridors where drunk driving has been an issue.”

With the new analysis, authorities could now choose to focus on those problem areas, with a greater focus on outreach, education and enforcement.

Quantifying a Tech Talent Gap

The Austin Technology Council released preliminary findings from our tech talent study yesterday at the annual CEO Summit. With a data assist from EMSI, we estimated total demand for core tech occupations to be somewhere in the range of 2,500 to 3,500 job openings expected per year in Austin. The study included the usual secondary data–job postings, payroll records, etc.–and an employer survey conducted in April 2015 to provide a primary data check for what we observed in the EMSI estimates. The employer survey also captured some interesting perspective on the so-called skills gap or talent shortage facing leading regional tech markets like Austin. Summary findings are posted on the ATC website at the link above or you can download the presentation directly here (PDF).

The first time I worked on a “workforce gap” study was in 2000, in my first economic development job at the Sonoma County Economic Development Board. We wanted to know annual labor demand for high-tech workers, as they were called at the time, especially in the North Bay’s telecom cluster. While the data and tools for measuring supply and demand in the labor market have improved considerably, some of the methodological challenges are the same today as they were fifteen years ago.

For example, labor markets don’t operate like commodity markets. Price of labor (wage) is not as responsive to relative movements in supply and demand, for a variety of very complicated reasons, especially when you try to measure market conditions for one particular industry sector. Firm-level versus industry-level issues are also extremely difficult to sort out. If larger, established corporations report less difficulty finding qualified workers compared to smaller, growth-stage companies, is there a talent shortage? A researcher’s gut reaction may be to look for differences in wages, benefits, working environment, etc. at large companies versus small companies, but what if all of those factors were comparable?

And then there are regional effects. Austin wages are assumed to be low relative to high-cost markets like San Francisco, Silicon Valley, or Washington DC, given cost of living differences. But to what extent are lower home prices, rents, and breakfast tacos able to make up for $20K or $30K in wages? Is the Austin premium still what we think it is, or have home prices, rents, and traffic increased enough here to reset the scale with California?

Much more work to do here with ATC and others. Stay tuned.

Report: Talent gaps put pinch on key parts of Austin’s tech sector

This story was written by Lori Hawkins & Dan Zehr, Austin American-Statesman, 05/28/15.

Report: Talent gaps put pinch on key parts of Austin’s tech sector

Some of the companies most vital to Austin’s economic growth might have the hardest time filling key high-tech positions, according to a study released this morning.

The Austin Technology Council report found that local employers will have as many as 3,500 unique open jobs each year in the region’s 19 core high-tech occupations — and that local colleges and universities awarded just 1,539 of the degrees needed for those jobs, fewer than any other major tech hub in the country.

Furthermore, Austin-area tech companies rarely hire those recent graduates and, even when recruiting outside talent, might face an increasingly difficult time paying high enough wages to attract qualified candidates.

The region’s median wage across the 19 core occupations was $80,454 per year, slightly less than the national median and significantly lower than in other tech hubs, particularly the leading $116,314 median tech wage in San Jose, the study found

“For two or three decades, we’ve been leaning so heavily … on our culture, our lifestyle piece,” said Julie Huls, the technology council’s executive director. “We’re going to begin to see more and more mature tech-market challenges, like salary, begin to be of greater importance.”

Huls stressed that the report included preliminary findings, and said some underlying questions remain about the state of the tech labor market in Austin. But she said the report underscored two key challenges – the disconnect between the local education pipeline and industry needs; and the disparity between salaries between Austin and other tech hubs.

“Local companies haven’t been forced to compete en masse with outside influences, and I think that will change,” Huls said. “Do I think we’re at a critical point today? No. Do I think some of our companies are starting to feel the pinch? Yes, I do.”

While part of the study looked across the tech industry and the 108,000 jobs it provides in the region — from giants such as Samsung and Dell to midsize software firms and a host of smaller startups — the report focused primarily on the region’s key technology occupations.

The analysis found 67,546 jobs in those 19 core occupations, including anything from software developers to network administrators. About one third of those workers were employed by companies outside the high-tech industry.

Overall, the data and responses compiled in the council’s report suggested the companies within Austin’s tech sector have managed to expand their business without filling most open positions.

However, 70 percent of respondents said they find it “difficult” to “extremely difficult” to fill job openings. And the hardest hit appeared to be firms in the “second stage” of growth – established companies that are still going through a key growth spurt.

Not only did these second-stage companies report a higher level of difficulty when filling new jobs, they expressed less confidence that the Austin market would be able to meet their workforce demands in the future.

“To the extent that Austin’s economic development is built on a foundation of those growth-stage companies, we need to ensure that those companies can find the skilled technical workers they need to say here and grow,” said Brian Kelsey, principal of Civic Analytics, which conducted the analysis.

Companies in that established but rapid-growth stage tend to create the majority of jobs in the tech industry, Kelsey said. And as technology companies provide 11.1 percent of Austin-area jobs, those expanding companies are a key driver of regional economic and payroll growth.

“That’s really Austin’s sweet spot,” Kelsey said. “We’re not a market here that’s driven, especially in tech, by large companies. … Our market depends on entrepreneurship and the ability of these second-stage companies to grow locally.”

Other regional workforce experts agreed that a talent shortage exists in certain occupations and industries. A recent report by Indeed, a global online job-search firm, found notable shortages of some high-tech and health care skills in Central Texas.

Austin enjoys a “diversity of the types of opportunities and talent,” including people whose skills can translate across a variety of occupations, said Tara Sinclair, the firm’s chief economist. But an analysis of their broad search activity indicated far fewer applicants than jobs that require specific technical skills.

“Employers are going to have to chase talent,” Sinclair said.

While Austin has had little trouble attracting workers with technical skills, it has struggled to create enough of its own. The pipeline of home-grown talent would only fill half the open high-tech jobs, even if all those graduates were to stay in Austin and land jobs.

Of all the top tech hubs in the country, Austin-area colleges and universities awarded the fewest core tech degrees in 2013, according to the council’s report.

While many local companies said they hire local workers, provide student internships or employ workers with associate degrees, the survey found that only 12 percent of respondents hire recent college graduates or do not require previous work experience. Forty-two percent of respondents said they require applicants have at least five years of work experience to even get consideration.

“This is a significant barrier to getting more entry level technology workers into the pipeline,” Kelsey said.

When tech companies pass up less experienced engineers, they end up competing over the same limited pool of experienced workers, said Larry Warnock, a veteran Austin software executive.

“Everyone wants the five to seven years of experience, but the Austin tech community needs to embrace new talent,” said Warnock, who is president of software startup Boundary. “If you ask me to name 20 software companies in Austin that have been around for more than seven years, I can’t. We’re still in adolescence in development as a tech hub, so we don’t have that base of employees yet.”

That often leaves companies either poaching from one another or looking to draw workers from outside the area. To that end, Austin’s booming growth and existing talent pool might actually make it easier to hire here than elsewhere, said Drew Scheberle, senior vice president at the Greater Austin Chamber of Commerce.

“It’s not just Central Texas that needs these workers,” he said. “Everyone is after those (computer science) graduates.”

Like the council report, the chamber’s monthly analysis of job openings and talent gaps indicates that Austin does suffer from a shortage of qualified applicants for key computer science and other technical jobs.

However, its analysis also finds that local employers don’t have as hard a time hiring as in other major markets for information technology and software, Scheberle said, noting the influx of large outside employers opening or expanding operations here, such as Apple, Visa and Athenahealth.

“You can still hire here and people still want to move here,” he said.

In fact, Austin’s economic boom emerged in part from a virtuous cycle, in which a deep pool of skilled workers helped attract new companies — which in turn created jobs that drew more skilled workers.

According to data compiled by Hired, a tech-focused job site that officially launched in Austin this week, Austin companies tend to import a larger percentage of talent compared with other markets.

Roughly a third of the hires through the site were relocations to Austin, said Chelsea Cooper, general manager of the Austin office. Relocations accounted for roughly one in five hires in San Francisco, according to the company’s data.

Austin ranked in the top three locations Hired users noted in their search profiles, Cooper said, behind only San Francisco and New York.

For Austin startups, California often seems like a natural place to target for tech talent, but Warnock said companies would get better results by looking elsewhere.

“We tend to zero in on the West Coast, but people are anchored to Silicon Valley and the Bay Area by the massive number of opportunities there,” he said. “We need to focus on other regions and universities that are producing great engineering talent. That means looking to Illinois, Michigan, Houston and Georgia. To those places, we look like Silicon Valley.”


 

Study: Clean tech adds $2.5 billion, 20,000 jobs to Austin economy

This story was written by Brian Gaar, Austin American-Statesman, 05/27/15.

Study: Clean tech adds $2.5 billion, 20,000 jobs to Austin economy

The clean technology sector contributes $2.5 billion annually to the Austin area’s economy and employs 20,000 people in Central Texas, according to a new study released by city leaders and industry advocates Wednesday.

What’s more, employment in the field is expected to grow 11 percent in the Austin area by 2020, according to the study conducted by Austin-based Civic Analytics, a development consulting firm, and the Austin Technology Incubator.

The study is the first attempt to quantify the clean energy sector in Central Texas, said Mitch Jacobson, co-director of the Austin Technology Incubator’s clean energy incubator.

“We’ve all known for many years that there’s something special happening here in the Austin area with regard to clean technology, and now … we have proof and facts — really compelling ones,” Jacobson said.

He credited partnerships with local utility Austin Energy, Austin Technology Incubator and University of Texas researchers, among others, in helping to grow the sector.

The study defines the clean tech sector as “a set of technologies and services developed across a number of industries in response to concerns about climate change, energy security and resource depletion.” That can include industries ranging from smart grids, vehicles, water, recycling and manufacturing.

The sector employs nearly 20,000 people in the Austin metro area, which also includes Georgetown, Round Rock and San Marcos). Employment is projected to grow in the region at 11.24 percent by 2020, almost twice the national growth rate. Previous research from a 2011 Brookings Institute report rated Austin’s clean tech economy 36th out of 100 metro areas, with 14,554 jobs attributed to Austin’s clean economy growing at a rate of 5.3 percent per year.

For context, about 1 million people in the Austin metro area were employed as of April, and the metro area has an annual GDP of about $100 billion, according to the Texas Workforce Commission.

Austin Mayor Steve Adler said it’s “no surprise that Austin is a clean technology hub.”

“Our city’s roots, as we all know, are deeply embedded in technology,” he said. “That’s long been a real dominant and growing industry in our city. And we are so close to the world energy hub, that is Houston, Texas. Now you bring together both the tech and the energy industries, and in that nexus something grand and big happens.”

The growth of the sector, Adler said, doesn’t happen by luck.

“An interconnected web of businesses and organizations, both public and private, have contributed and (have been) deliberately orchestrating this industry, designing this ecosystem for years now,” he said.

Brian Kelsey, principal of Civic Analytics, said the study shows that “clean tech is now part of Austin’s economic development story and a fairly significant piece of it.”

“I think there’s a lot of that story left to tell,” he said. “I think there’s some work to do, in terms of defining Austin’s competitive advantage versus some other regions around the country, but I’m excited about the prospects for continued research in this field.”

Austin Innovation District

Thanks to Mike Kanin and the Austin Monitor for hosting last night’s panel on Austin’s planned innovation district anchored by the new UT medical school. During my comments I mentioned the DC innovation district plan for the Saint Elizabeths campus as a potential model for framing our thinking about what an innovation district should look like here in Austin. Here’s some follow-up reading to the panel discussion that expands on the points I made:

Regional Innovation Clusters and Urban Economic Revitalization

DC Innovation Strategy for Saint Elizabeths

I was fortunate to serve as one of the project managers for the Saint Elizabeths planning work during my time at the U.S. Economic Development Administration and got to know Chris Gabriel and Bomani Howze a bit. They’ve both been kind enough to visit Austin recently to talk about what we should want out of our innovation district effort. It would be wise to keep a line of communication open with Chris and Bomani as Austin’s effort takes shape. Sherri Greenberg at the LBJ School of Public Affairs has a forthcoming report on innovation districts, too, which I’m sure will provide additional examples worth considering.

The message I was trying to get across last night is simple: this is a unique point in Austin’s history where we have an opportunity to showcase to the world how economic development can be made more sustainable and inclusive. The data is pretty clear about the challenges facing a very large share of Austin residents in terms of earning a living wage that can keep up with steadily rising home prices and rents–and what that means for economic segregation.

Pay particular attention to the strategies discussed in the Saint Elizabeths report about workforce development and targeted support for minority-owned businesses. We are well-positioned in Austin to capitalize on those types of opportunities with a strong network of workforce training providers, city and county governments that understand (and fund) the connection between workforce development and economic development, and one of the best city-operated small business development programs that I’m aware of.

Our public dialogue about Austin’s proposed innovation district should not focus on real estate plays, design standards, and where we draw lines on a map. Don’t get me wrong, those are important topics–I teach in the planning department after all and would like to continue doing so–but they are secondary priorities. Nor is this simply about creating more publicly subsidized office space for technology companies or lab space for Austin’s growing life sciences industry. The UT medical school will do plenty to contribute to Austin’s entrepreneurship ecosystem and innovation-based economic development without an innovation district.

Travis County voters decided in November 2012 that the UT medical school and teaching hospital were worth investing in through a property tax increase. While I may have disagreed with how we got here, we now have an obligation to ensure that we make the most of this opportunity. We’ve been consumed lately with questions of affordability, equity, and, ultimately, what we value as a community. The innovation district is an opportunity to make good on our promise of inclusive prosperity, but only if we go about it in an intentional, deliberate way–as Chris and Bomani like to put it, by building “direct and deliberate bridges.”

Get it right, and we have a uniquely Austin model that can help redefine economic development and showcase to the world what’s possible through public-private partnerships. Let this opportunity pass by and we’ve done little more than added to the cynicism that already pervades discussions about economic development.

The UT medical school and teaching hospital are going to redefine how we think about healthy communities and the way in which we deliver health care services. We should strive for no less when it comes to economic development.