Home ยป Austin tech sector can expect a jobs boom over the next five years – Austin American-Statesman

Austin tech sector can expect a jobs boom over the next five years – Austin American-Statesman

by Arifa Rana

If you think there are a lot of software engineers, computer scientists and other high-tech workers in the Austin metro area now, wait until nearly 22,000 more flood into the region over the next five years.
That’s the forecast from CompTIA, a tech industry trade association that — for the third straight year — has put Austin at the top of its annual list of U.S. cities where the tech sector is booming and expected to keep growing.
CompTIA’s “Tech Town Index” ranks U.S. metro areas according to their existing tech communities and the rate at which ongoing opportunities for companies and workers “intersect with affordability and quality of life” to keep them attractive.
The tech-related workforce in the Austin metro area — which includes Travis, Williamson, Hays, Bastrop and Caldwell counties — totaled about 155,000 people at the end of 2021, and is expect to grow by 3.6% this year and by 14% through 2026, according to CompTIA.
The forecast equates to the addition of about 5,600 tech workers this year and just over 21,500 by the beginning of 2027.
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Such projections come as no surprise to local tech industry experts or to observers of the region’s red-hot housing market.
Growth and job creation in Austin’s tech sector “is running across the board — anything from real estate tech to (financial tech) to cybersecurity to social media platforms,” said Amber Gunst, CEO of the Austin Technology Council. “It’s just a wide variety of opportunities to build technology companies and offer opportunities to Central Texas.”
The Austin area has notched a number of big tech-related economic development wins over the past few years, such as ongoing or announced expansions and relocations by globally prominent companies that include Tesla, Samsung, Apple and Oracle. In addition, the overall tech ecosystem here has been thriving, with medium-sized and small firms also boosting operations and hiring more workers.
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CompTIA said the strong job growth and the region’s relatively low cost of living — at least compared to other U.S. technology hubs — continue to give it an edge over competitors.
San Jose, a traditional Silicon Valley tech-sector powerhouse, came in second to Austin in the group’s 2021 rankings, moving up from fourth place the previous year. Other notable cities that Austin beat out include Dallas, at No. 3 in the most-recent rankings, and San Francisco, at No. 8.
The cost of living in Austin has been rising, with rents and housing prices going up in particular amid what has been an influx of new residents in recent years that’s directly related to the tech boom. But the region still remains more affordable than many other tech hubs.
CompTIA pegged Austin’s cost of living as the fourth-lowest among the Top 20 metro areas in its latest tech-hub rankings, with only Lansing, Mich., Atlanta and Huntsville, Ala., lower.
Maintaining that advantage could be challenging, however.
The median home price in the Austin metro area came in at $521,100 in March, up 22.6% from the same month last year and an all-time high, according to the Austin Board of Realtors. Within Austin’s city limits, the median price was $624,000 in March, up 22.4% from the prior March and also an all-time high.
Local apartment rents have climbed significantly as well, rising about 15% on average last year — or an increase of about $200 a month for the typical metro-area renter, according to a survey by Austin-based Capitol Market Research.
Still, Kory Kantenga, senior economist with professional networking site LinkedIn, said Austin is in no danger of losing its national reputation as a relatively inexpensive place to work and do business among people and companies looking to relocate for better opportunities.
Recent data from LinkedIn indicate the Austin area has attracted the highest rate of in-migration of new workers over the past 12 months among the 20 top U.S. metro areas that it closely tracks. According to the data, Austin gained the most new workers over that time from the San Francisco area, Los Angeles and New York.
“Even though the Austin median housing price has risen substantially recently, it still remains about a third of the median housing price in San Francisco,” Kantenga said.
“It will take dramatic shifts for such gaps to disappear in the next few years,” he said. “So while Austin’s cost-advantage will continue to steadily erode as it grows, there is no reason to expect that Austin’s competitive advantage will disappear any time soon.”
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There’s no doubt many people in the Austin area are finding the region increasingly unaffordable, however, even if those working in the local tech sector — where CompTIA estimates the median salary at about $90,500 annually — might view it as a relative bargain.
“Affordability is a problem,” said Charles Heimsath, an Austin real estate consultant and president of Capitol Market Research. “Certainly, I think there is more opportunity for people to take a job in tech and be able to afford living in Austin than if you were taking an entry-level service job and struggling to make ends meet.”
But Heimsath said some of the affordability issues could be alleviated as more housing and related infrastructure are built to accommodate local employers and workers migrating to outlying areas. Efforts to make the region more accommodating for commuters — such the Project Connect mass transit initiative — also will help, he said.
Samsung and Applied Materials are among the major employers that have been looking to expand outside of Austin’s city limits while remaining within the metro area. Samsung announced in November that it plans to build a $17 billion semiconductor factory in Taylor, while Applied Materials recently said it’s considering building a $2.4 billion research and development facility in Hutto.
“As long as we continue to recognize (affordability) as a problem and work diligently to solve it on multiple fronts, I think we will be fine,” Heimsath said. “It’s when we ignore the problems or don’t address them in thoughtful ways that we could end up in trouble.”
Gunst, of the Austin Technology Council, said the Austin area can’t sit still when it comes to issues such as quality of life and affordability or it risks losing some of its main calling cards.
“One of the things that we can do to get ahead of this — that our competitor cities have not done — is we need to start putting a focus on affordable housing and also on density” in terms of where and how much development takes place, Gunst said.
“If we don’t do that, then we are going to lose out on a lot of the culture and a lot of the spaces that we’ve come to love in Austin,” she said.
As things stand, the region’s booming tech sector shows little signs of slowing down.
Tim Herbert, chief research officer for CompTIA, said a confluence of factors continues to set Austin apart nationally and help grow its tech scene — including the wide variety of tech companies and entrepreneurs that have set up shop here.
The region “benefits from a broad-based tech workforce,” Hebert said. “On a percent change basis, Austin is among the leading metro areas in growing its base of tech employment across a range of positions,” such as cloud infrastructure, applications, data and cybersecurity.


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