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Austin’s high end tech scene shines as deglobalization accelerates

Mar 24, 2023

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Peter Zeihan

Geopolitical Strategist

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The Texas Triangle is an urban megaregion that includes Dallas-Fort Worth, Houston, San Antonio, and Austin. While those cities are leaders in areas such as aerospace and auto manufacturing (Dallas) and mining and energy (Houston), the capital city of Austin provides high-end technology. It’s been called the next Silicon Valley; in fact, Elon Musk is reportedly building a town nearby for his employees there.

Straight Arrow News contributor Peter Zeihan says as the world faces deglobalization, Austin and the Texas Triangle will play a critical role for the U.S.

Excerpted from Peter’s March 24 “Zeihan on Geopolitics” newsletter:

I may have ditched the “howdies” and “y’alls” for the high mountains of Colorado, but Austin remains part of one of the fastest growing economic and urban zones in the Western Hemisphere. However, Austin can’t credit all of its success to the “Keep Austin Weird” bumper stickers…

The key here is in the neighborhood. It’s a blue city in a red state, so they get low taxes and a high level of city services. More importantly, Austin falls right in the middle of the Texas Triangle – a zone comprised of San Antonio, Houston, and Dallas.

Houston is an energy hub and heavy into manufacturing. Dallas is an auto and aerospace hub. Both of those are financial centers in their own way. San Antonio offers a low cost of living and low labor costs. Austin happens to be the missing piece in the Texas Triangle: high-end tech. Austin can operationalize the research the other cities need and disseminate the plans from there.

It doesn’t look like Austin’s growth will be slowing down anytime soon. As the world faces deglobalization, Texas (the Triangle specifically) will play a critical role for the U.S.

Hey everybody, Peter Zeihan here coming to you from the lar passenger bridge in downtown Austin. As some of you remember, this was my home for 20 odd years. And I am proud to say that the city is still doing strong. Austin is at the middle of what is called the Texas triangle, which has been the fastest growing economics and urban zone in the western hemisphere for about 25 years now. And the story is in the neighborhood. So Texas is a red state, so the taxes are low. In fact, in the state of Texas, there is no income tax at all. But this is a relatively Blue City. So it has a reasonably high level of city services. That sort of combination has really helped urban areas in a similar match places like Lexington, Kentucky or Atlanta, Georgia. But there’s more than that. The Texas triangle, as you might expect, has three major urban zones of which Austin is not technically one. The big three are San Antonio Houston and Dallas. Houston is obviously an energy and heavy manufacturing hub. Dallas is an automotive and aerospace hub. Both of them are financial centers in their own way. And then San Antonio has lower cost of living and lower labor costs. And so is great at mass manufacturing, especially in automotive. Where Austin plugs in is on the higher end. There’s an area to the northwest of town called Silicon Hills, which as you might guess, is kind of an echo of Silicon Valley. But where Silicon Valley focuses on the base research, and being a hotbed of core tech innovation, Austin takes a lot of that research and then turns it into operationalized development plans, which are then applied throughout the rest of the Texas triangle. So it’s not that awesome to do this by itself. But Austin plugged into the triangle makes it the perfect interlocutor for everything for turning modern manufacturing into reality. And if you see kind of behind me, you know, there’s quite a skyline here. This is a city that as recently as 1985, only had about 600,000 people and now there are over two and a half million in the entire metro. And all of the buildings in the immediate background. Were not there when I moved to Austin back in 2000. And the ones a little bit further back. Now maybe two thirds of those are new in the last 20 years. So Austin has been one of the top 10 fastest growing urban centers in the Western Hemisphere now for almost 30 years straight. And even though it is the most expensive city in Texas, and even though the cost of living has now risen above the national average. It has a long way to grow because it can physically grow to the northwest, the North, the Northeast, the east, the southeast, the South and the Southwest very easily. And the land just to the west where I used to live is called the hill country. And as you might guess it’s hilly but not mountainous. This is an advantage that a lot of the Texas cities have they can just physically expand with reasonably few restrictions. Talk to you guys later. Bye

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