Silicon Valley’s monopoly on the tech industry had to erode eventually. While the Californian juggernaut is still a force to be reckoned with (pulling in vastly more venture capital than its rivals), the playing fields are beginning to level. In the same way Hollywood ceded its monopoly on the film industry when favorable states and Canadian provinces entered the conversation, Silicon Valley is losing some of its key players to other locations.
And where are they going? They’re packing their saddles and riding toward Texas. “Is the future (of the tech industry) in Austin, Texas?” asked the LA Times this year. Judging by the influx of talent, innovative companies and big corporations, it appears that the answer is “yes.”
In this article, let’s explore reasons for the current tech boom and predict what the future of tech looks like in the Lone Star State. There’s no single reason for the surge in interest; instead, Texas’ tech boom results from a confluence of pull factors, favorable qualities and snowballing interest. Let’s take a closer look.
Speaking with Click2Houston, real estate tech thought leader Regan McGee pointed out that “Texas is the second most popular state in the United States for relocation, with more than 500,000 people moving to the Lone Star State every year.” McGee recently introduced his disruptive company Nobul to Texas, citing the high population and “burgeoning technology industry growing in the state.”
Texas pulls in a sizeable number of new citizens each year, widening and diversifying its talent pool. This is great news for tech companies looking to set up offices.
One of the main reasons for the Texas tech boom is affordability. “Why buy 1 house in California when you can buy 6 in Texas,” reads one Forbes headline. Major companies are taking note, looking for ways to reduce overhead. And startups are certainly noticing, having been priced out of the Bay Area’s ever-rising market.
Major Urban Centers
Unlike other states nearby, Texas has several metropolitan areas to choose from, mirroring California’s layout. Tech companies can establish their products/services in several populous markets.
Favorable Tax Laws
According to statewide surveys, Texas ranked first among “business-friendliness,” thanks to its low tax burden and generous asset protection. “Texas is consistently lauded for its business-friendly tax framework, particularly for new and small businesses,” reads the comptroller report. One has to assume that so many large tech companies are laying down roots in Texas because of its favorable tax laws.
Big companies like Tesla, Oracle and HP have relocated (or were initially located) in Texas, paving the way for future companies. A significant part of Silicon Valley’s early growth was spurred by innovating employees at big tech companies breaking away to form their own startups. Now, Texas will be the recipient of those breakaway innovators.
Technology’s Bright Future in Texas
With Nobul bursting onto the Texas tech scene, expect to see further evolution in Texas proptech (short for property technology). Don’t be surprised if an enterprising engineer at Texas’ Tesla HQ breaks away to form their own alternative energy tech company. And watch Texas in the next few years to (likely) see its number of startups soar, as young innovators, priced out of the Bay Area, move East to the Lone Star State. Absent a crystal ball, those are the safest predictions one can make about where the Texas tech scene is heading.