AUSTIN, TX: Investment is pouring into Austin, the state capital and city of two million in the middle of the state.
Texas is attractive to investment, say experts, because it has tax breaks for business, an ample, growing supply of educated workers, and no personal income tax.
More than $1 billion of new investment flowed into Austin last year, creating over 27 000 jobs. Austin leads the United States in job creation and its housing market is among the hottest in the country.
Most of the growth is technology related.
Austin is the home of Dell Computers. And electric car maker Tesla last year joined database company Oracle in moving its headquarters from the Silicon Valley to Austin. Apple Computer is the city’s largest employer but will soon be overtaken by Tesla, whose second US assembly plant is beginning production. Tesla CEO Elon Musk says the enormous facility near the airport could provide jobs for 10 000 people.
Texas is a long way from California, and Austin’s cost of living is well below that of the San Francisco Bay Area.
So, while locals complain about rapidly rising home prices, for transplants from California Austin real estate is a bargain, with a median home price of $550 000.
Like the Bay Area, Austin draws skilled labour from a major university. The University of Texas in Austin has 50 000 students, including several thousand at a new engineering and science complex donated by the Gates Foundation and Dell Computers. The university, combined with a vibrant live-music scene, makes Austin attractive to young people.
Getting Tesla has been a game-changer. Several competing cities offered tax breaks and incentives but Austin emerged victorious, in part because of its proximity to the Texas gulf coast where Elon Musk’s Space X has its launch facility.
The expansive four-story Tesla plant is one kilometre in length and will handle all phases of production, including making a new larger battery that extends vehicle driving range. The Austin plant more than doubles Tesla’s US production capacity.
Watch my one-minute video on Tesla’s Austin Gigafactory:
The latest coup for Austin and the state’s Republican governor Greg Abbott involves South Korean electronics giant Samsung. In what is the largest foreign investment ever in Texas, Samsung will spend $17 billion to build a semi-conductor fabrication plant in Taylor, a small town just east of Austin.
Situated next to an existing smaller Samsung plant, the new facility will produce chips for 5G mobile phones and other artificial intelligence applications. More than 2 000 additional jobs will be created.
There are those who say manufacturing is dying in the United States. To them I would say, come to Austin or to Phoenix or to Charleston, South Carolina. Indeed the case can be made that high-tech manufacturing is on the rise in the US.
(click the youtube link for Barry’s one-minute video on Tesla’s Austin Gigafactory)
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