Tech Growth at SXSW Mirrors Austin-Round Rock Metro Changes

By: Taylor Buchanan / Community Impact Newspaper

South by Southwest Conferences & Festivals draws hundreds of thousands of visitors to the Austin area every March. While downtown Austin yields the majority of the economic benefits—with bars, restaurants and hotels reporting high profits—the city of Round Rock stands to gain from its proximity to the event, too.

For over two decades—since Dell Technology’s relocation in 1994—Round Rock has been building a reputation as a tech city, said Round Rock Assistant City Manager Brooks Bennett. SXSW’s reputation has evolved, too. Once known as a music and film festival, the event is now tech-centric, where attendees from around the world are introduced to the Austin-Round Rock metro as a high-tech hub.

“We hope somebody coming to SXSW this year—an executive of a startup or a tech company looking to grow its presence in Central Texas—will fall in love with our community,” Bennett said.

A Barometer for Change

In 1987, when SXSW started, it was a local stage for undiscovered musicians. Now, 32 years later, SXSW is an internationally known music, film, gaming, education and technology conference.

The city of Austin—with a population of just over 461,000 people then and nearly a million today—is a tech-savvy giant. Apple, Samsung, Google and others have launched campuses locally.

Meanwhile, Round Rock’s population has more than quadrupled—from around 30,000 in 1990 to 123,678 in 2017.

“Round Rock became a high-tech city essentially overnight,” Bennet said about Dell’s relocation in 1990. “Technology is extremely important to the vitality of this community.”

Silicon Valley no longer leads the world or even the nation in technology production, according to Mark Sprague, director of information capital at Independence Title. Internationally, Beijing launched the most tech startups in 2018. The Austin-Round Rock metro came in ninth overall, with Silicon Valley in 11th place, he said.

“Events like SXSW help put the flag in the ground for Austin to say this is a place that attracts that kind of human capital,” said Michael Sury, a finance lecturer at The University of Texas.

The emphasis on tech has helped position Austin as a city of the future, SXSW Chief Programming Officer Hugh Forrest said. As the festival prospered and grew over the decades, so too, has the Austin metro.

“So far, we’ve seen the growth of SXSW correlate almost one-for-one with the growth of the economy in the city,” Sury said.

Technology at the Fore

The rise of tech as the new heartbeat of SXSW alongside the festival’s astronomical growth have mirrored trends in the city. Like SXSW, Austin’s economy has grown quickly, and its tech sector has fueled that growth.

Round Rock has strategically prioritized technology as an economic generation strategy, according to Mike Odom, president and CEO of the Round Rock Chamber.

“The types of tech companies that are already based here run the gamut,” Odom said in an email to Community Impact Newspaper. “We have established multinationals like Dell Technologies and Emerson Automation Solutions to growing enterprises like EIXSYS and CyberDefenses. They position us extremely well for significant sector growth going forward.”

Round Rock is home to tech employees who work in Austin, tech companies and other businesses that use high-tech equipment, Bennett said.

“The amount of tech that is inside of Round Rock is phenomenal,” he said. “People drive by every day and have no idea about the amount of tech going on behind the scenes.”
With more room for expansion than Austin and a development-friendly attitude, economic growth is on the horizon for Round Rock, Sprague said.

“The desire to be in Round Rock, to be in the Austin area, is higher than any place else I’ve seen in the United States,” Sprague said.

Bennett said he hopes factors such as quality of life and a qualified workforce encourage more tech companies to view Austin’s neighbor to the north as a place to do business.

Economic Impact

SXSW reports an enormous impact on Austin—to the tune of $350.6 million in 2018—according to a report by Greyhill Advisors, a firm hired by SXSW to develop economic impact reports.

Attendance exceeded 75,000 people last year, according to the report. Many stayed at area hotels at an average rate of $400 a night and ate at local restaurants and bars.

Hotels booked through SXSW alone contributed $1.8 million in hotel occupancy tax funds, according to the 2018 report from Greyhill Advisors.

“That’s money that’s going back into the community,” Forrest said. “It’s generating tax revenue that can pay for better schools, better roads, all kinds of things our community needs.”

Economic impacts are not isolated to downtown Austin. Hotels book up across the area—from Round Rock to San Marcos—Sury said, and attendees spend money at bars, restaurants and businesses near where they stay.

“We’re seeing people go further and further afield,” Sury said. “People are going to the suburbs now to stay and busing in, taking a cab or an Uber, in order to save money on the hotel stay.”

This creates expanded opportunities for communities outside the central business district, he said. The suburbs are seeing increased revenues from people who have decided it is too expensive to stay in Austin.