Blogs » Politcs Plus » Economic recovery: Austin will lead the way

Subscribe


I just finished reading an interesting Times Magazine article called "How to create a job” by Barbara Kiviat. Austin, Texas was a centerpiece because of its built-in advantages over other cities. It starts off with an educated population ( 43% of all of its residents have a bachelor’s degree or higher), the University of Texas, a supportive community, a robust venture capital scene, a state government that gives it stability and is unafraid to throw money at companies that need help getting off the ground. Despite the grandstanding by Governor Perry, Texas made good use of stimulus money from the federal government; much of it in and around Austin, Texas.

Austin's unemployment rate is about 3% lower than the national average because of its entrepreneur spirit. It's the home of the entrepreneur that will create the next video game, ID-card reader, or a company that created a shipping container size power management system that takes its energy from wind farms, stores it, and slowly releases and an interrupted supply of it out the other end. Work Force Solutions, a government funded not-for-profit, has been partnering with business and local schools like Austin community college to develop a series of training courses to help people upgrade their skills and earn certifications. This systematic approach realizes that a 40-year-old isn't likely to have two or four years to return to school full time. This gives us a program that realizes that we need to set the stage to create more goods and services but we also need to be prepared to support workers in their quest to adapt.

The top three jobs in this century and beyond will be in the professional scientific and technical, health care and social assistance, and in the arts and leisure. Austin, Texas is well suited for all three.

The nonprofit Austin technology incubator is, home to many start-up firms, where they are schooled in finance, business plans, share ideas and solve problems. About one third of all new jobs come from small businesses like these. Young companies add jobs at a faster rate.. A 15 year firm will add jobs about a 1% rate but the typical three-year old firm will add at a 5% rate….. Austin gets it.

Conservatives seem to think that tax cuts for business is the answer for job growth but an American Express survey asked this question of several businesses "What would spur companies to go out and hire.” 42% of respondents said an increase in customer demands, 11% said tax cuts, and only 5% said access to loans. Focusing on demand is pretty tricky these days because for years, American consumers have been the biggest target but we are overloaded with debt and now we are becoming thrifty. That is why the Obama administration now talks about doubling exports in the next five years. It's also the reason job creation bill passed by Congress includes an accelerated tax break for companies buying equipment. Companies that sell equipment need to build it, and companies that buy equipment need people to run and maintain it. It's a different approach; we will have to wait and see.

The article ends by saying that “Austin richly illustrates, in the wake of the worst economic downturn in generations, innovation is starting to happen. And from that, the jobs will follow.