Building a Wireless Economy
By Carlo Longino, Tue Jan 20 11:00:00 GMT 2004

Austin, Texas, was hit hard when the dot-com bubble burst, and the tech downturn has hit the PC and semiconductor industries, long the pillars of the local economy. But a group of people here are hoping to foster growth and prosperity in the city's high-tech sector by encouraging wireless business.

Tens of thousands of jobs have been lost in Austin in the last few years, both from local behemoths like Dell, Motorola, IBM and AMD, and the hundreds or thousands of Internet start-ups whose only accomplishment was shutting down. The steady movement of people from places like New York City, Los Angeles and San Francisco has slowed, and many of the tech nomads that did come here have left, following the money elsewhere in the country.

These events have trickled down to the rest of the community as well. Long-standing bars, restaurants, and shops have closed, simply unable to keep up with leases renegotiated during the height of the boom, and city tax revenues are way down, necessitating cuts in many public services.

Austin has a strong entrepreneurial spirit and history, and the University of Texas' IC2 Institute, a research unit focused on technology innovation and commercialization, has played a key role since its inception in 1977. Through its efforts in general and its Austin Technology Incubator in particular, IC2 was a major reason behind Austin's software and Internet boom of the 90s. Researchers at the institute turned their attention to wireless, and are now hoping it can create another local success story, not only putting Austin on par with traditional wireless strongholds like San Diego or Dallas, but giving the local economy a much-needed shot in the arm.

IC2 last week released the "Austin's Wireless Future" report (PDF), a snapshot of the burgeoning wireless scene, and a guidebook of recommendations on how to foster its growth. Using an apt metaphor for Texas, project director Eliza Evans told the local paper "When we went prospecting, we weren't certain there was oil. Now we know there is oil, and we've identified some steps to get it out of the ground. But there is still plenty of heavy lifting to do. This report is a first step."

Researchers were surprised by what they found – the city already had nearly 100 companies involved in the wireless industry, and almost half of them were purely focused on it. 83% of the companies are home-grown, and most are concerned with 802.11 technology. While it's hard to measure the total number of jobs in the wireless industry in Austin since many are hidden within big companies like Motorola or AMD, 3,400 people work at the 80 percent of wireless companies that each have 100 or less employees. It's these small companies that IC2 hopes to focus on boosting.

The meat of the report, however, is the suggestions it makes to Austin leaders in government, education, and business. It identifies a number of areas in which different constituencies in the city must deliver, and also lists a number of elements important to the growth of wireless businesses. These companies' top concern is access to investment capital, something common to new ventures anywhere. But the companies are also looking for well-trained and talented labor pool, and support from the city government and community.

IC2 offers several steps to take to make these a reality. Its first is to build a better social network for wireless companies in the area to foment cohesion in the industry. The thinking here is simply that a rising tide raises all ships, and to this end, the Austin Wireless Alliance was formed late last year. Community activists also started the Austin Wireless City project, which is dedicated to the proliferation of free, public Wi-Fi hotspots in town.

Another recommendation is for the local wireless industry to build on Austin's existing strengths in semiconductors, software, and digital media. As noted earlier, large companies like Motorola and AMD are heavily involved in the wireless chip business, along with Samsung, Intel, and others. Austin also has a strong background in software and video games in particular, with companies like Origin, Ion Storm, Digital Anvil, These fields complement the wireless industry; wireless devices and networks need semiconductors and flash memory, while digital media is converging on wireless devices. The expertise already here in the city in these areas is an invaluable tool to its relatively young wireless stable.

Maintaining and growing the training and education available to Austinites is another key point. The University of Texas has already attracted a well-known wireless researcher and authority to campus to start the graduate-level Wireless Networking Communications Group in its College of Engineering, but two-year programs and vocational training will also be necessary to train qualified blue-collar technical personnel. This is something the chip industry has done, helping establish programs like the two-year Semiconductor Manufacturing Program at the Austin Community College.

Finally, the report spells a need to both demonstrate Austin's "wireless saavy", as they put it, and raise its profile in the wireless world. They recommend utilizing Austin's tech-literate and -comfortable population as a place to pioneer new technologies and products and to attract test deployments of wireless gear. IC2 itself is taking first steps towards improving Austin's visibility by hosting a Wireless Futures conference during the popular South by Southwest media festival in March, and by supporting the high-level Austin Mobility Roundtable that same month.

Austin certainly isn't alone in trying to beef up its wireless business, and faces competition from cities around the world, like Tokyo, San Diego, and Helsinki to become a focal geographic point in the industry. The report's authors say that the number of jobs in Austin in the sector will grow by 25% this year, and at an annual rate of about 20% over the next several years. They estimate that just the payroll of these companies already generates $85 million of consumption in the local economy – so wireless could quickly become a key component of Austin's success.