Anyone who’s visited or lived in Austin for even a nanosecond would probably agree it’s a dynamic place. Now, a nonprofit research organization has given its “dynamic” stamp of approval.
A new report from Heartland Forward puts Austin in seventh place among the country’s most dynamic metro areas for 2021, down from No. 6 in 2020. The nonprofit based its assessment on these factors: recent employment growth, wage growth, and GDP growth, as well as two entrepreneurship metrics (density of startup activity and density of well-educated workers at startups) and the average income.
The San Jose, California, metro area — home to Silicon Valley — lands at No. 1, up from No. 2 in 2020. No other Texas metro appears in the top 25.
“While it doesn’t have as high a share of its startups in the tech sector as the West Coast hubs,” the report says of Austin, “it has a vibrant entrepreneurial ecosystem with lower costs.”
Austin has some catching up to do when it comes to those West Coast hub, according to the report.
“Because Austin is still transforming from a college town and state capital into a major tech hub, its economic performance continues to differ from other tech hubs,” the report says. “In particular, its wage growth is not on par with the coastal tech hubs, but its job growth remained strong during the pandemic. … The Austin economy is dynamic, but its innovations are not as consistently technologically advanced as those in Silicon Valley and Seattle. Because of that, Austin is not yet generating nation-leading wage growth.”
Nonetheless, Austin’s maturation as a tech hub is well underway, the report notes, and the metro area “is trending toward matching its coastal counterparts soon enough.”
Some of the statistics favoring Austin include:
- 11.7 percent job growth from 2015 to 2020.
- 10.1 percent job growth from June 2020 to June 2021.
- 28.4 percent average annual pay growth from 2015 to 2020.
- 24.1 percent growth in gross domestic product (GDP), a key measure of economic activity, from 2015 to 2020.
Only one other Texas metro, Midland, shows up in the report’s top 50. Midland fell from No. 1 in 2020 to No. 38 in 2021, in large part due to disruption in the oil and gas industry. Odessa, Midland’s neighbor in West Texas, ranked at the very bottom (No. 382, down from No. 123 in 2020).
Here’s how Texas’ three largest metros fared in the ranking:
- Dallas-Fort Worth, No. 110, down from No. 37 in 2020.
- San Antonio, No. 187, down from No. 62 in 2020.
- Houston, No. 245, down from No. 175 in 2020.
Heartland Forward says the list of top-ranked metros features “a mix of top tech hubs, low-cost emerging tech hubs with outdoor and lifestyle recreational amenities that have been attracting remote workers, [and a] university and state capital presence, along with a lack of dependence on energy or international tourism and business travel as propelling factors.”