Austin’s Future As a Hardware Hub

The Forrest Four-Cast: June 21, 2017

A recent interview with Harlan Beverly (pictured above), the Assistant Director of the Texas Venture Labs, highlights some of the challenges that Austin is currently facing in terms of technology growth — and specifically technology growth in the elusive hardware sector. As Beverly tells Mike Cronin of the Austin Business Journal:

“Austin has started to lose its competitive advantages for high-tech manufacturing and hardware. . . .Where we might have once been a cheap place to get talent, real estate and low-cost labor, we now suffer the cost-of-living increase problems that Silicon Valley and other major tech hubs see.”

Beverly points out that while software has traditionally been one of our strengths, our ecosystem need to also work for more hardware investment:

“We need to get investors excited in these types of deals again. What Austin needs is some big hardware and manufacturing success stories to get Central Texas investors to make bets in those industries again.”

This interview is particularly intriguing in the context of SXSW, where we have seen a strong uptick in the participation of hardware-related startups and more established hardware companies over the last few years. Yes, software (and particularly social media) sparked the significant growth that the event enjoyed over the last decade. But more recently, big hardware activations (for example, next-generation cars) have become a much larger part of the March Magic equation.

Given that the path of SXSW generally follows the path of Austin (and vice versa), it is likely that we will see more hardware opportunities arise in Central Texas in the next few years. More manufacturing won’t be easy (because hardware startups are really hard) — but a gradual expansion into this space is absolutely necessary for our future.

Hugh Forrest tries to write at least four paragraphs per day on Medium. These posts often (but not always) cover technology-related trends. When not attempting to wordsmith or meditating, he serves as Chief Programming Officer at SXSW in Austin.

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