Austin = Hollywood
For a city as self-consciously hip as Austin, it's a little ironic that the mainstays of the local economy have been the state government and the high-tech industries. Government, even if our governor becomes the next president, can never be glamorous for the main reasons that government employees make modest salaries and governing necessarily means saying no to people. Santa Claus is more glamorous than Scrooge.
The high-tech industries, at least while the stock market is strong, are much more like Santa Claus. People make good salaries and those with stock options have done quite well. But how glamorous is high-tech? Money can go only so far as an antidote to Dilbert-ness.
For starters, many people in the industry are nerds. They have to be to understand the business. High-tech means a heavy engineering component and an emphasis on efficiency and productivity.
And ten years ago high-tech in Austin meant mostly semiconductor manufacturers and companies that supplied the semiconductor industry. Semiconductors are the engines that drive the Information Revolution, but to make them you basically have to run a factory. Factories are never hip.
And how does this square with Austin's image as a hub for music that's out of the mainstream? Somehow it's hard to imagine Willie Nelson or Stevie Ray Vaughn working for a semiconductor company.
Even our biggest local success, Dell Computer, is hardly in a glamorous industry. Dell is an admirable company and its stock performance has been phenomenal over the past few years, but all it really does is assemble computers that are largely indistinguishable from those made by other companies.
Fortunately, the evolving nature of what constitutes "high-tech" promises some resolution of this glamour dilemma.
Most of the recent job growth in Austin can be traced to the content side of high-tech: software, multimedia, Internet, even film production. This is the more fashionable segment of the industry because it explicitly employs creativity and values uniqueness more than efficiency.
Hollywood learned a long time ago that software (or content or programming) is more hip than hardware. Think about it. What's more glamorous: owning a television factory or owning a television program production company that makes a profit of $2 million per year? What's a better job: making $50,000 per year working in a television factory or making $30,000 per year building sets for the production company?
Entertainment and content are always more glamorous than hardware. Plus, perhaps more importantly, these businesses lend themselves to small operations that lack the depressing bureaucracy of large corporations. The content/software business is tailor-made for start-up firms. And entrepreneurship is cool.
We're forever hearing about people leaving large corporations to start their own companies. At the graduate business school at UT-Austin, entrepreneurship classes are among the most popular, and not just because of the booming Internet. Being an entrepreneur is like being a pirate; it's operating outside the mainstream and trying to succeed on your own terms. What could be more glamorous than being both rich and a pirate? Isn't this a fantasy shared by aspiring musicians?
Starting a software or Internet company combines the outlaw sensibility with high-tech. You don't need a lot of capital to start, and the risk/reward profile is great. It costs something like a billion dollars to build a semiconductor factory. Only big corporations can do it. But almost anybody can start an Internet business or software company if they know what they are doing, just like anybody can start a rock band. You might not succeed, but you'll look cool going broke.