Nobody can argue that Austin isn’t a growing, thriving city. Over a hundred people move to Austin every day from all around the country for it’s thriving arts and music scene and job opportunities. Austin currently has full employment and is known colloquially as the Live Music Capital of the World. Every year, the city hosts Austin City Limits Music Festival, South by Southwest, and dozens of other smaller film, music, and art festivals.
Despite its relatively small size, Austin leads in population growth, speed of population growth, and net company creation rate. CNBC ranks Austin as one of the top cities to start a business, looking at how cities compare in categories “such as environment for small-business success, the cost of doing business, quality of life, labor force and diversity.”
Not only that, according to Kauffman Indicators of Business Success, a far-reaching entrepreneurship research organization, Texas ranks well above average on several indicators of business growth and opportunity. For example, the rate of new entrepreneurs (or percentage of population who start their own business) is up from 0.37% in 2013 to 0.42% in 2017 (compared to just 0.33% for the US as a whole), a whopping 83.79% of those who started their business by choice instead of necessity. This is determined by whether someone went from unemployment to entrepreneurship or from a full-time job.
Not only that, businesses in Texas last. In 2017, the average number of jobs created by startups in their first year (normalized by population) was 5.69 compared to the US average of 5.27, and an overwhelming majority of nearly 80% of businesses survive their first year.
The Kauffman Report from 2017, the most recent year where information is available, indicates that Austin is number two for startups for new businesses, trailing behind only Washington, D.C. Metro Area. In fact, in start-up activity Austin sits behind only Miami and is one of the largest-growing cities in the nation.
Why Austin – and Texas – are Business-Friendly
But why do so many businesses and entrepreneurs thrive in Texas? Texas is known as being a business-friendly state for many reasons. There is no individual state income tax, no state corporate tax, and no state level property tax. Individual cities and counties have their own requirements, but they are not doubled on top of state taxes. Its large size and open spaces also means there’s plenty of inexpensive land for cities and companies to grow into.
Not only that, but Austin hosts campuses for Apple, Progressive Insurance, Dell, and Whole Foods. The success of these larger corporations may indicate possible future success to smaller business who would like to make their home here. Austin also has the prestige of being the capital of the state and has established modern infrastructure. Austin is located in the center of the state with easy access to other parts of Texas and leads in both oil and gas and sustainable energy generation.
Texas also has a very highly educated workforce from which these companies can pull prospective talent. Austin alone hosts the University of Texas at Austin, St. Edwards University, and Huston-Tillotson University, and is a short drive to Baylor, the University of Texas at San Antonio, Texas State University, the University of Houston, and other prestigious universities. Texas is home to 36 public universities and 50 community college districts, creating millions of capable workers.
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