Austin Doesn’t Buy a Report Saying It’s Not a Big Tech Center

Austin GraphicAustin’s tech community is skeptical about a Forbes report that ranks it 32nd out of its 51 best cities for technology jobs.

Mark Schill of the Praxis Strategy Group , which conducted the analysis for Forbes, told The Daily Texan:

… layoffs at major manufacturing companies and a shift of labor to foreign markets contributed to the loss of 17,000 jobs in semiconductor, computer, and circuit board manufacturing over the past decade. Praxis Strategy Group used labor statistics gathered from state and federal entities from the past 10 years to rank cities based on job growth and job loss, Schill said.

That doesn’t mean Austin doesn’t have weight: The city has twice as many tech jobs as others of comparable size.

Overall, Austin’s tech community is leery. They note that demand for workers exceeds supply, and cite statistics like this: Licensing revenue at the the University of Texas at Austin rose to $25.6 million in fiscal year 2010-2011 from $14 million in fiscal year 2009-2010.

Comments

  1. BY Mark Schill says:

    Mark,

    Thanks for the comments. This high-tech list is meant to be a conversation starter and should by no means be viewed as an indictment of Austin’s tech sector. Because of the complexity here, there’s always more to the story when we’re looking at any given region. A few points relative to Austin:

    - The analysis uses a fairly broad definition of high-tech based upon that of TechAmerica, including many manufacturing sectors. Austin’s ranking was brought down significantly by job losses earlier in the decade in computer manufacturing and semi-conductors. However, Austin shows very solid growth in sectors such as computer systems design and custom programming, which is probably closer to your constituency here at Dice.com. Austin also fared much better in the 2-year growth rate measure.

    - As you noted, Austin’s concentration of the industries I looked at is still twice the national norm level, which ranks 5th among the top 51 metropolitan areas. However, since the measures are normalized, its value in this metric is somewhat deflated by the huge concentration in San Jose.

    - I took a quick look at the Austin numbers by occupation instead of by industry. Austin shows about 770 new jobs and over 1,600 openings in the group of occupations we could consider “IT” related (SOC code 15-1 if you’re keeping track). The region shows concentrations of 2.5-3 times national average in occupations like DB administrators, systems analysts, and information scientists. These workers could be in any industry. For the same broad grouping of IT workers, the data shows more than 2000 openings (growth and replacement jobs) against only 620 program completions at educational institutions. This seems to confirm what you’re hearing from the local tech community, and could be evidence that the university system should ramp up program offerings if possible.

    So in summary, Austin’s performance in this particular index was anchored a bit by job losses in certain large manufacturing sectors related to the technology industry, but it is still a center for high tech. It has performed better overall more recently, and has shown strong growth throughout in computer and IT related industries, which are probably most important to your readership and clients.

    • BY Mark Feffer says:

      Hi Mark -

      I didn’t take the report as an “indictment,” by any means. Instead, I thought is provided a good illustration of the shift away from manufacturing’s importance (as you point out) toward more development activity. From the Austin newspaper’s article, though, I do think it made people there a tad nervous. But that could be because those in the development community don’t think of themselves as being in the same group as those who are putting devices and components together.

      Thanks for taking the time to add to the story.

      Best,

      Mark

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