"Aggressive, measurable and sustained are the terms that come to mind when looking over the shoulders of economic development professionals in Austin, Texas, the city Commerce Lexington has chosen as the destination for its sold-out 2008 Leadership Visit. Helping to shape an agenda for the event next June 4-6 was the purpose of a recent whirlwind visit to the Texas state capital by members of the committee planning an itinerary for the chamber's largest-ever field trip. While Austin's storied entertainment industry might seem uppermost on the minds of many who hope for a more lively and diverse nighttime economy in Lexington, it's what such an asset means to Austin's overall economy that most impressed this group.
In an event so popular that it sold out in less than two weeks, 250 Lexington officials, professionals and civic activists are scheduled to travel to Austin for two days of intense study of the city that bills itself officially as "The Music Capitol of the World," but whose denizens have adopted the tag line "Keep Austin Weird." The phrase reflects an eclectic, arts- and music-friendly culture that has attracted and retained a highly educated and steadily growing workforce.
This "advance team" of Convention and Visitors Bureau President (and former Austin Chamber of Commerce Vice President) David Lord, Bluegrass Tomorrow President Steve Austin, Urban County Councilman Jay McChord and downtown developer Phil Holoubek traveled to Austin in late November with this writer in tow. Their mission was to ensure that the time invested next June by scores of very busy people is tightly focused on issues relevant to a transformational Lexington.
Top of mind was a fact of life for Lexington: local government relies on payroll taxes for 83 percent of its operating revenues. The system leaves the city's public sector constantly struggling to spur the creation of more and more private sector jobs in order to shoulder such heavy fiscal burdens. The city already is anticipating something of a fiscal crisis, with the EPA negotiating what will undoubtedly be a painfully expensive repair and update of city sewage systems coupled with the necessity of addressing an unfunded $121 million liability in the city's firefighter and police pension funds.
Aware of this scenario, the Lexington group listened intently as Adriana Cruz and Sandy Hentges of the Austin Chamber of Commerce detailed "Opportunity Austin," an aggressive, five- county economic development strategy that is the region's response to a crisis of its own: the dot-com bust of 2001-03 and the traumatic loss of roughly 30,000 jobs.
The plan, based on the recommendations of the community and economic development consulting firm Market Street Services of Atlanta, set the short-term goals of attracting new businesses, retaining existing companies and stimulating earnings, and it established a long-term strategy to elevate the Austin region's competitive stature among rival regions. In a trip sponsored by Kentucky Utilities, Commerce Lexington will lead a group of Kentucky economic development professionals to Atlanta on January 8 to meet with, among others, Mac Holladay of Market Street Services.
The program was launched in 2004 with the ambitious goal of creating 72,000 jobs within five years. With its own staff of 12 economic development specialists, the chamber worked closely with the city of Austin and its economic development staff of 42 and within only three years had already surpassed the goal with the creation of 80,000 jobs and counting in the five county region.
They included 500 software professionals hired to staff Austin's new Home Depot Technology Center. In addition, nearly 60 established businesses announced expansions that created new positions. (In comparison, the Lexington area has recently added jobs to its economy numbering in the hundreds.)
The Austin chamber developed a system of accountability providing member businesses with the ability to track progress. A running accounting is maintained of the businesses that create the new positions, as well as the salaries of each. And the chamber's member businesses are kept abreast of economic impact projections showing specifically how their particular sectors of the economy benefit. Auto payments, for example, soared from $23 million in 2004 to an expected $172 million for 2007; clothing and apparel leaped during the same period from $13 million to more than $99 million; groceries went from $21 million year in '04 to $156 million in '07.
In addition, regional city and county government revenues increased more than tenfold, from a total of $28,947,006 in 2004 to $306,588,775 projected for 2008.
Austin consistently ranks in top 10, 25 and 50 lists of "best places to live" out of hundreds of U.S. cities and holds top honors as a best place for entrepreneurs. And they know a thing or two about the pressures of constant growth. City officials say Austin welcomes 75,000 new residents annually to its current population of 800,000.
One important goal of the '08 Leadership Visit to Austin is to experience the nighttime economy of a city that has so studiously leveraged its unique assets — most notably its music scene — to bring about a spectacular rebound. From former Austin Mayor Lee Cook to the city's Creative Industries Development Manager Jim Butler, the advice to Lexington was to inventory unique assets and build on them.
Former Herald Leader columnist Bill Bishop, now plying his trade for the Austin American-Statesman, suggested that we notice something striking among the waiters and cab drivers of Austin: that many are highly educated individuals who gravitated to the city primarily for the lifestyle, electing to establish roots while searching for roles in the local economy. Eighteen percent of University of Texas graduates — approximately 140,000 — remain in Austin. A quality business climate, thriving social scene and head-spinning variety of options among the arts, entertainment and attractions are why, Bishop explained, the city has little difficulty in luring or retaining the creative talents demanded by high technology industries.
This is where the dots seem to connect between the recent experiences of Austin, Texas, and the near-term aspirations of Lexington, Kentucky. That nightlife, the presence of more than 80 live music venues and annual music and film festivals are accepted tools of economic development. These amenities are valued because they make life interesting for an emerging demographic of young professionals who are delaying marriage and childbirth, devoting themselves to their work and looking for options to blow off steam. They comprise an employee base essential to the operations and success of a spectrum of technology-related industries.
Austin-based economic development guru Angelos Angelou emphasized to the Lexington group that it is a mistake to believe that anything other than the technology industry is driving the global economy, impacting every business sector. He warned that cities that fail to seize technology today cannot expect to compete in the future.
For Lexington, the most important observations made in Austin in the spring of 2008 may be about how economic development — aggressive, measurable and sustained — is shaped, adequately funded and staffed and successfully executed to place a city on a competitive footing in the economy of the 21st century."