Featured Article 25 Sep 2014

Simon Carswell
The Irish Times
22nd September 2014

Austin revels in its kooky status and the Texan capital’s slogan “Keep Austin Weird!” has become a catch-all calling card for musicians and software coders, political liberals and start-up entrepreneurs.

So there is nothing weird about the Irish Government’s decision to establish a new Irish consulate and outposts for Enterprise Ireland and the IDA in Austin, where the organisations aim to help Irish firms win business there and attract more foreign direct investment out of Texas.

Austin, to which 110 people move each day, is America’s fastest growing city, with its strong employment prospects and attractive cost of living. This is lower than it is in America’s main tech hub, Silicon Valley and the San Francisco area.

Ireland will be the first EU country to set up a consulate in Austin and only the second internationally; Mexico has a diplomatic mission in Austin owing to the country’s proximity just south of the Texan border. The Irish Embassy is scouring for the right location for “Ireland House” amid ferocious competition for office space in this booming city.

“We are hoping for a prominent location, not far from the Capitol, to make a statement that we are here and that we are the first here from the European Union, ” says Adrian Farrell, the newly arrived Irish consul general.

Where Northern Ireland may have dominated Ireland’s diplomatic brief in the US in the past, the economic recovery at home has made strengthening business ties between the countries the priority for Ireland’s ambassador in Washington Anne Anderson.

Not having opened a consulate since the 1930s, the economic crisis forced a rethink on Ireland’s diplomatic frontiers to expand beyond the traditionally strategically important cities of New York, Boston, Chicago and San Francisco.

The embassy opened a consulate in Atlanta in 2010 to corner the southeast of the country where the dynamic consul general Paul Gleeson has covered much ground since being dispatched to that corner of the country. Attention immediately turned to the southwest. Texas, the 15th largest economy in the world and the second most populous state in the US with 27 million people, was the obvious choice. Then, it came to choosing between Dallas, Houston and Austin.

“There was sifting through the facts and figures of the trade and business connections,” said Anderson.

“Finally, the feeling was that the fit was best with Austin in that it is a very fast-growing, future-focused, young city: it has very clear strengths that match our strengths.”

A vibrant life sciences industry and information, communications and technology sector, as well as being an entrepreneurial hub and the seat of government in Texas, made Austin the winner.

Anderson said, on her visit to the city to attend the annual meeting of the growing Irish Network group last weekend, she heard someone describing Austin as being “powered by creativity,” which, she says, is similar to Ireland.

The University of Texas in Austin and other colleges in the city draw thousands of students and have helped to fuel that creativity. The city has strong cultural foundations and is home to the South By Southwest music, film and technology festival: linking it neatly with Ireland.

“The kind of vibe you have here in Austin is very much what identifies Ireland as well,” said Anderson.

The Government has led two trade missions to Austin and other Texan cities in the last two years hosted by Minister for Jobs Richard Bruton to try to tap some of the growing business in the city.

Orla Battersby, Enterprise Ireland’s North America director, said that early last year it was receiving an increasing number of calls from client companies about Austin and setting up in Texas.

“There is only so much you can do when you are not on the ground there,” she says.

She expects exports to the US by Enterprise Ireland client companies to grow to €2 billion and maybe €2.2 billion this year, helped by new connections in Texas.

Texan companies already employ 4,000 people in Ireland and the Lone Star State is the largest exporting American state by volume so it made sense for the IDA to look at Texas to open the agency’s seventh US office and tap this outward-looking market for inward investment.

“The state has four of the top-10 fastest-growing cities. We felt we needed to be a bit closer to that and to be in the mix there,” said Pat Howlin, the director of IDA’s North American operations.

Will Wynn, who was mayor of the city from 2003 to 2009, puts Austin’s strong growth down to the city figuring out, about a decade ago, the “economic development model of the 21st century”. In the last century, the focus was in building massive infrastructure: airports, shipping channels, seaports that requires thousands of bodies, he said.

“The 21st century model, that we got lucky and discovered early, is the opposite: you attract the people – young creative talent – and the jobs follow them,” said the Democratic mayor who spearheaded the Keep Austin Weird campaign from 2002.

“We focus on quality of life, live music and progressive politics, pro-gay rights, lenient marijuana laws – I’m half-joking but serious. More 25-to-34 year olds move to Austin, Texas than in any other place in North America.”

The “talent” didn’t come here because social media, internet and technology giants such as Facebook, Google and Apple were here, says Wynn; those companies came here because the talent was here. Dell’s headquarters in Round Rock, north Austin, has drawn many Irish from the computer company’s operations in Limerick.

Politically, Austin’s liberal blue credentials in a very red conservative state – “the blueberry in the tomato soup”, as one local described it last weekend – has made the city stand out in Texas as a place that is open to fresh ideas, turning it into a hub of start-ups.

Austin’s alternative ways of thinking made the city an ideal location for entrepreneur Sean O’Sullivan, a one-time investor on RTÉ’s Dragon’s Den, when he was looking to expand Carma, his car-pooling business that matches commuters with their neighbours’ empty car seats.

The Cork-based company employs two staff in the city. “That sort of orientation towards experimentation and towards open-mindedness has helped Austin become a pioneer,” he said.

The affordability of Austin, the city’s deep talent pool and higher quality of living for start-up companies makes it a top-tier city for technology alongside Silicon Valley, Boston and New York, he says.

Ciaran Connell, founder of DecaWave, a Dublin company that makes chips to track global positioning indoors, raised €9 million from investors in Austin out of the €25 million the company has banked. Connell lived there for 11 years, working for phone company Motorola.

Texas was dominated by the oil industry in the 1970s and 1980s and Austin made a conscious effort to diversify into technology from the 1980s onwards, offering a cheaper alternative to Silicon Valley, a move Ireland should consider replicating too, says Connell.

“It became known as the Silicon Hills. Every company that is worth anything in technology has a huge base in Austin – every Californian, American, Korean and Israeli company. There is an argument for looking at Austin which has successfully copied Silicon Valley, and copy them,” he says.

Pat Doab, president of the Irish Network Austin chapter (one of 19 branches in the US), estimates that there are between 400 and 600 Irish people living in the Austin area with more families moving over as people are hired for projects in Dell.

“There is so much construction going on here – there are cranes everywhere: it is a very vibrant city,” he says.

Steve Lenox, co-president of Irish Network USA, said the city’s energy, spirit and enthusiasm, combined with Austin’s strategic significance for trade and investment with and in Ireland, makes the city a logical choice for the network’s annual meeting this year.

Now, one of the challenges for Ireland’s new diplomatic and economic outpost is to continue to attract American businesses out of Austin into Ireland. The relationships are clearly growing.

Ambassador Anderson points to two statistics mentioned by officials working with the city’s mayor Lee Leffingwell at their meeting last weekend: a study of passengers flying to Europe showed that Dublin was fourth in terms of the numbers travelling from Austin.

Another statistic from the mayor’s office, she says, is that more than 60 per cent of companies in the city have a strong interest in doing business in Europe but are not operating in that market yet.

“This city is only truly beginning to go global and think of itself in terms of global terms,” she said. “So – being in here early and with the kind of partnerships you are going to be able to set up between Irish companies and some of the companies over here – they can grow together.”

Ireland in the United States: Embassies and offices Diplomatic representation Embassy: Washington DC Consulates: New York, Chicago, Boston, San Francisco, Atlanta and Austin IDA offices IDA offices: New York, Boston, Chicago, Atlanta, Mountain View (northern California), Irving (southern California) and Austin Enterprise Ireland offices New York, Boston, Silicon Valley and Austin.

Content supplied with the permission of The Irish Times Ltd. For more see www.irishtimes.com

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