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Technology Incubator reports economic development, new jobs for Austin

Monday, February 7, 2011 by Elizabeth Pagano

For the City of Austin, the Austin Technology Incubator is like money in the bank


ATI Director Issac Barchas spoke with In Fact Daily about his agency’s recent report to the Austin City Council and the future of the incubator.


Last year, ATI received about $620,000 from the city and Austin Energy, which accounted for about 40 percent of the incubator’s financial support. “What the city is, in essence, buying with this investment in ATI is economic development,” Barchas told In Fact Daily, adding that the incubator supported 32 companies in 2010, pumping an estimated $35 million into the local economy.


ATI was established in 1989, and the city was involved with the project from its inception as one of the initial founding sponsors. In recent years, the direction of the incubator has shifted somewhat, with both the city and ATI investing more heavily in each other. “Our more recent partnership with the City of Austin has grown out of what the city’s and the Chamber’s economic development goals are and then trying to build up focused programs that are aligned with those goals. That really started in 2006,” Barchas said.


After the economically rough year of 2009, which Barchas called “a nuclear winter” at City Council in terms of garnering funding, the incubator seems to be returning on the city’s investment.


ATI created 50 new jobs for Austin in the past year. “The interesting things about the jobs number is, the jobs that we report to City Council are jobs that are created while the company is at the incubator; we’re not counting jobs created after they graduate,” he said. “But that’s of course when the big job creation happens.”


This bigger number remains unknown. Although the ATI website estimates the total jobs created by the incubator at 10,000, Barchas was unwilling to confirm that exact figure. “I am quite comfortable saying that there have been thousands of jobs created in Central Texas by ATI companies,” said Barchas.


When asked how ATI was looking to develop and expand in the future, Barchas said, “We’ve actually grown quite a lot over the past four or five years. It’s a very different organization now than it was back in 2005. We’ve set up these vertical focus areas, in wireless telecommunications, clean energy and heath care-focused life sciences — which didn’t exist before – and those are programs we are continuing to reinvest in.” Barchas also mentioned heavy investment in increasing the incubator’s presence on the University of Texas campus, and working even more with students.


ATI partnered with the UT College of Pharmacy this past year to create a wet lab space for entrepreneurs. There are plans to expand this program, as well as delving into other areas of tech development.


“We are trying to support the digital media community in Austin a bit better than we have in the past,” said Barchas. “In particular we are doing that by incubating a new incubator: the Austin Gaming Incubator which is a separate 501(c)(3) from us but is co-located with us.”


The incubator has plans to expand geographically as well. “We’re also working with our sponsors at the State Energy Conservation Office to see if we can clone some of the success that we’ve had with our clean energy incubator in other geographies in Texas,” said Barchas.


Barchas highlighted the role that the project’s Landing Pad program plays in bolstering economic development in the city. The program aids established tech companies that are looking to relocate to Austin. “What we’re doing with these companies (is that) we are just getting them up the Austin learning curve faster. We know the people they want to know, and we’re happy to make introductions,” said Barchas. “It’s good for us if more people are coming to Austin with good ideas and can employ people and contribute to the tech economy.”


When asked how the incubator convinces companies to relocate to Austin and graduates of the incubator to stay in central Texas, Barchas was brief. “People want to live here. It’s a compelling place to live,” he said.

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