Local Spotlight: City of Austin Economic Development Department

Jessica Huey Grey

By Jessica Huey • May 14, 2014

This post is part of the Regulatory Reform for the 21st Century City project.

There’s been a lot of buzz lately about Austin – and it’s not just from South by Southwest. No other city in America has better weathered both the recession and recovery. The April edition of the Brookings Institution’s Metro Monitor ranked the Austin metro area economy first out of the 100 largest metro areas in the country for its performance in job creation, unemployment, output and housing prices. For the City of Austin, this strong performance isn’t a reflection of a one-time success story of a city that got lucky, but rather a testament to the strategic efforts of its Economic Development Department.

Following the 2001 dot-com bust that left the city with unanticipated job loss, the City Council prioritized a mixed-industry base for economic development and a focus on Austin’s small business and the creative economy sectors. The Council established task forces to focus on three main areas: culture, traditional business recruitment, and small business development.

The recommendations of the task force resulted in a unique repositioning of the Economic Development Department. In most cities, the office of economic development usually sits in one of many silos below the mayor’s office, alongside other siloed departments like fire, human resources, and public works. In Austin, the Department acts as a broker between the private and public sectors.

In addition to attracting a diverse range of industries, the Economic Development Department also has taken proactive steps to help support new and existing businesses in Austin. In all of its divisions, the Economic Development Department makes a concerted effort to work with private sector stakeholders and private companies on a one-on-one basis, not simply at a policy level. This includes helping businesses navigate and expedite the permitting process, which can often be daunting given regulatory codes around utilities, roads, land use and zoning. To better educate businesses on the various permitting processes and the challenges that may arise, the Economic Development Department works with the Planning and Review Department to host frequent information sessions for business owners.

The Economic Development Department’s unconventional role has been successful in attracting and retaining talent as well as stabilizing the city’s economic base. As a result of this multi-pronged focus, the city has seen a rise in a variety of industries including the creative arts and technology sectors which have given its local economy a boost in recent years. According to a 2012 report by TXP, the creative sector has played a substantial role in driving Austin’s economy. In 2010 alone, the creative sector accounted for over $4.35 billion in economic activity, over $71 million in city tax revenues, and almost 49,000 jobs.

Through these efforts to attract a diverse range of businesses and support them all the way through the business development process, the Economic Development Department has taken an active role in not only helping Austin create a roadmap for economic resiliency, but also a local economy as rich and diverse as the city itself.