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Austin boom serves as lesson for Waco with planned research center [Waco Tribune-Herald, Texas](Waco Tribune-Herald (TX) Via Acquire Media NewsEdge) Oct. 25--AUSTIN -- In 1983, Texas' state capital beat out 57 rivals in a nationwide derby for a research consortium that was intended to stave off the Japanese threat to America's leadership in high-tech industry. The response of the rivals from Boston, Silicon Valley and other technology powerhouses was: Huh? Austin was a mere outpost of the high-tech world then, better known for government offices, the University of Texas and aging hippies. "It changed people's perception of a sleepy college town to a high-tech hub," said Pike Powers, an Austin power broker who led the campaign to recruit Microelectronics and Computing Technology Corp. as well as later technology ventures. "Once you get on the front page of The New York Times, the L.A. Times, the Chicago Tribune and The Wall Street Journal, you look at yourself differently. We became a hot property overnight... From that time on, we never doubted we could win the big ones." Austin's example is instructive to Waco as community leaders attempt a similar feat of economic reinvention based on research and development. Austin is a case study in how R&D consortiums can pour the foundation for a tech industry boom -- and how cities have to keep reinventing themselves after the boom ends. Baylor University this week announced plans for a $30 million renovation of the General Tire building to house the Baylor Research and Innovation Collaborative. The effort, aided by Texas State Technical College and support from local government, will attempt to develop new materials and processes for a variety of industries. A study by Waco-based economist Ray Perryman projected that the research park could generate 8,618 to 22,656 jobs in the next 15 years. Those who have led and studied Austin's technological development say Waco could become a contender in R&D, but the field is crowded and success is unpredictable. "Now Waco has a catalyst, but it's a big bet," said David Gibson, associate director of IC2, an economic development think tank at the University of Texas at Austin. "Just because they have this asset doesn't mean it will be successful." Gibson has studied Austin's technological development in depth since the 1980s and co-authored a 1994 book on the subject, called R&D Collaboration on Trial. In a 2002 study of Waco commissioned by the Greater Waco Chamber of Commerce, he recommended that Waco capitalize on Baylor and TSTC to turn research into business start-ups. "There's no reason Waco can't compete in the global economy," he said. "The university is the keystone. Without the university attracting talent, it's not going to work." Both Gibson and Powers know Truell Hyde, head of the Baylor research effort. They say Hyde's vision and experience will make him a strong leader of the effort. Powers said the keys to research and development parks are adequate funding, a focused plan and a committed and capable university. "If it's deeply embedded in university research, the chances of success are significantly better," Powers said. "The building doesn't have much to do with it. The people who do the science and research will be the answer. It will be blood, sweat and tears to make it work." Austin's rise A university is where Austin's high-tech success began half a century ago, and it was crucial to the boom of the late 20th century. In the late 1940s, UT created what is now called the J.J. Pickle Research Campus in northwest Austin. In the 1950s it received defense contracts involving sonar and acoustics, work that continues today. The defense work led to the creation of Tracor in the 1960s, a company that eventually spun off 20 companies that provided some 5,500 jobs. In the late 1960s, IBM began making Selectric typewriters in Austin, and in the 1970s, electronic assembly plants sprung up. By the early 1980s, Austin was home to factories owned by Motorola, AMD, Texas Instruments and 3M. But Gibson said the real transformation happened in the 1980s as research and development consortiums were created that allowed companies to jointly develop technologies. MCC, an industry consortium headed by Adm. Bobby Ray Inman, was a high-profile effort to protect America's technological dominance in an era when Japan was boasting it was developing artificial intelligence. In 1983, with strong leadership from state and city leaders, Austin snatched it from the jaws from more established competitors. "People were stunned," Gibson said. "People wanted to know how Austin did it. We have a nice quality of life, but we're not La Jolla, California. We had some transportation issues with our airport. UT was a good university, but it wasn't Berkeley or MIT. But they did have a vision of being world-class, and the state was behind it. It was affordable here, and we had talented people... It's how Austin pulled those pieces together that made the difference." Then-Gov. Mark White made snaring MCC a top priority, worried that Texas' economy relied too heavily on oil and gas, Powers recalls. Powers, a former state representative, was chief of staff to White, and the governor put him on the job full-time. "Governor White told me, 'I don't want Austin to come in second, and I don't want to win by an inch,' " said Powers, now an attorney at Fulbright & Jaworski. With $20 million in state and local incentives, MCC's campus was established in north Austin, employing 400 and causing an epidemic of land-flipping among speculators. But its promise never fully materialized. As the industry shifted toward personal computing, MCC continued to focus on supercomputing. By the early 2000s, it had shut down and become a business incubator run by IC2. But Powers and Gibson said MCC established Austin's reputation and brought top talent to town. That helped attract an even bigger plum: the semiconductor consortium known as Sematech. In 1988, a site donated by UT was chosen for the research facility out of 137 sites nationwide. A partnership between the Department of Defense and American semiconductor companies, Sematech was created to accelerate advances in microchips and preserve American dominance in the industry. "The industry was concerned that we were losing market share to Japan," Sematech spokeswoman Anne Englander said. It was the first time American semiconductor companies had worked together to develop common technologies. Sematech could manufacture prototypes for industries, and many of the major microchip makers flocked to Austin to be near it. By the end of the 1990s, the semiconductor industry was a leading part of the Austin economy and helped the metropolitan area grow 48 percent during the decade. But since 2000, the Austin technology industry has stumbled as microchip and computer companies have looked to cheaper production overseas. High-tech employment has fallen 24 percent, and high-tech manufacturing employment by half, to about 22,000. Now the hunt is on for the next big thing. Sematech, which now works with international companies and has other facilities in New York, has scaled back its Austin employment. But officials there say the semiconductor research of the past has laid a foundation for promising new technologies that Sematech is now developing. Applications include solar panels, biomedicine and nanotechnology. "We're expanding into more and more fields with semiconductors as a foundation," said Englander, the Sematech spokeswoman. Powers, who was also a leader in recruiting Sematech, said he has no regrets about focusing on semiconductors in the past because that technology is being repurposed for new goals. "Its future lies in clean alternative energy, whether through solar panels, energy storage or lighting," he said. Gibson said the seeds of Austin's future economy are being sown through research that is being done now, but he acknowledged it's hard to make up the old computer jobs. "Sooner or later, all industries die, and dying is painful," Gibson said. "Austin built its wealth on computers, and that was a good horse to ride for a while. Now we have to ask, how do we get talent from the semiconductor industry involved in clean energy, fuel cells, digital media, bioengineering, wireless and nanotechnology? This is still a place people want to be. We have creative talent here who can do things." He said Austin quality of life, including its food, education, music and film scenes, is part of the recipe for luring and retaining talented knowledge workers. Likewise, Gibson said Waco can attract people by capitalizing on its strengths, such as Cameron Park and Baylor's cultural offerings. "Waco shouldn't try to be Austin," he said. "Waco has a different vibe, but that's also important to develop. Waco has this chance to reinvent itself." To see more of the Waco Tribune-Herald, or to subscribe to the newspaper, go to http://www.wacotrib.com. Copyright (c) 2009, Waco Tribune-Herald, Texas Distributed by McClatchy-Tribune Information Services. For reprints, email [email protected], call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. |