Are we on the path to Austin, Aspen, or maybe Boulder?

On January 23, 2007, the Virginia Piedmont Technology Council (VPTC) held a town hall meeting entitled: “Pursuing Technology for a Robust Economy--Choosing our future: Austin or Aspen.”  The principal speakers were Gary Henry (longtime resident, technology leader and Chair of the VPTC Board) and Katie Bullard with AngelouEconomics in Austin, Texas.  Ms. Bullard was previously Budget Director for the City of Charlottesville.

[Charlottesville Podcasting has the audio.  VPTC's website has the presentations]

The Virginia Piedmont Technology Council wants to be a catalyst to spark a collaborative effort to create a larger technology-based economy in Charlottesville.  They are asking the question… Do we want to look more like Aspen, CO (i.e. completely unaffordable with no middle class) or Austin, TX (a highly rated community with a strong technology economy, more affordable cost of living, and a substantial middle class)?

VPTC sees this initiative as balancing the scale of our economy which is weighted today towards retirees and tourism.  I applaud their search for some of the ingredients in a common agenda that could help us achieve quality growth, growth that would benefit the community as a whole.  They have framed this as a desire to add balance to our economy and generate economic vitality.  Charlottesville Tomorrow shares those objectives.  We are going to grow, let’s make sure it is quality growth that enhances the community and doesn’t sacrifice our quality of life.

In their presentation, VPTC identified the need for a critical mass of new jobs and technology companies.  They want to build Charlottesville’s reputation so it becomes the #1 place to locate or incubate a small technology company.  This is ideally defined as home-grown technology businesses that employ 5-25 people.

VPTC’s three primary goals in this initiative are:

1. Bring this conversation to the community
2. Develop a center for technology incubation
3. Drive workforce development to support this effort

To measure the community’s progress down a technology path, they will define a “Technology Index” by which our technology economy’s growth can be measured.

I found the discussion helpful, but I left with many questions.  Here are a few to get people thinking.

Katie Bullard said a key indicator for Charlottesville to watch is the number of 25-44 year olds in the population (currently 29.1%).  She said we need to be at 33% or better to get young people to stay here after college and find career ladder jobs in technology companies.  Gary Henry defines “critical mass” as being opportunities (i.e. jobs) so our talented young people do not feel like they have to leave Charlottesville.  With a critical mass of opportunities, they can switch companies more easily here at home.  How many new companies and new jobs would it take to create that critical mass? 

Many of the comparisons in Ms. Bullard’s presentation were to Austin and Raleigh-Durham.
Has any other City our size figured this out?  [When I asked that question from the audience, Ms. Bullard cited Boulder, Colorado as one town already on the path of having a strong technology-based economic sector (software development).  Are there others?  Is Boulder an attractive model?]

Ms. Bullard identified our technology wages as a major problem.  “Wages here are not keeping up with the cost of living.”  The average technology wage in Charlottesville is $61,894 vs. Austin at $87,988.  When pressed on this by an audience member, Ms. Bullard said we needed to find “a couple small companies willing to pay higher wages and jump start the market.”  Is it realistic to think technology companies will come here and substantially raise wages?

Gary Henry pointed out that the technology sector is attractive because “the infrastructure impact will be minimal.”  He indicated we already have office space into which many small 5-25 person companies can go and UVA research parks are ready to expand.  What other community infrastructure (roads, schools, housing, etc.) will be needed to support the growth required to reach critical mass? Is UVA not on track to grow our technology sector with their investments at Fontaine and North Fork research parks?  If the organic growth we are seeing today is not enough, what pace of growth do we need?

In response to a question from Neil Williamson about the role of local government, Ms. Bullard said that local government should play a supporting role.  “Economic development should not be subsidized by government.”  Ms. Bullard emphasized private investment and pointed out she had never seen a regional approach work too well.  She clarified these comments for me after the lunch by indicating token financial support from local government was fine, but really economic development needed to be funded and championed by the private sector and venture capital.  Do we have the right mix of public-private investment in economic development?  How would we measure the results thus far and what needs to be done differently to more strategically serve VPTC’s goals?

As you can see, I plainly don't have all the answers, but I appreciate VPTC stimulating the conversation.

Brian Wheeler

Comments

[Jennifer]

Brian, Thank you for attending this, I really wanted to go, so this update makes me feel like I went (until the podcast comes out). I assume all of your questions will be answered at the next session!

[Sean Tubbs]

Hello all! The recording is now posted to the Charlottesville Podcasting Network site...

http://www.cvillepodcast.com/2007/01/24/austin-aspen/

[JF]

The PTC’s arguement doesn’t make that much sense to me. I don’t quite understand the need for providing jobs for UVA students upon graduation, most of which are not from Charlottesville. What’s the upside to existing residents, much less residents who’ve lived here a while…more traffic? What about the fact that 25% of Cville’s residents live below the poverty line, while only 8% of Aspen’s residents live below the poverty line. Not to mention that the median income for families in Austin is $54K versus Aspen’s $70K and Cville’s $45K. Aspen looks a little better to me in both respects. Cville would be lucky to become Aspen...., but it'll never happen. And what's so great about Austin anyway. I'd hate to see their average commute times, or their median home price. I'll guarantee you they're worse than Cville's. I say Cville's fine and the VPTC should leave it alone.

[Rob]

I have to disagree with Sean's last statement. As a former Charlottesville resident and former participant in the VPTC, I always felt that the VPTC wasn't doing nearly enough to encourage the change that is described (making the area economy less dependent on a transient student population, service/tourism jobs, and retirees). The point about Austin is that their median home prices are actually in line with the average salaries... hence, the whole "cost of living" stat. I, for one, left Charlottesville last summer because of the high housing prices and lower salaries. I am a software developer and I moved to Baltimore... I'm definitely enjoying a higher salary and I'm looking forward to purchasing a reasonably-priced home in the near future.

The comment about Charlottesville not retaining the recent grad population is right on the money. With a top-20 university in the area, the level of innovation that could be achieved if those recent grads worked for start-ups in town would be tremendous. All of the companies in town looking for software developers have a very difficult time filling open positions, due to the lower salaries offered. However, I think the problem is not only with a lack of "critical mass of opportunities" but also cultural... Charlottesville as a town doesn't emphasize any "hipness" or excitement for the younger twenty-somethings; instead, it emphasizes the history, the rural nature of the area... in essence, everything that a twenty-something really doesn't care about. To attract and retain the younger workforce, you need not only the job opportunities, but the social opportunities.

The one thing I disagree with in the original post is the statement that Charlottesville's infrastructure can handle the growth. Anyone who has driven on Emmet St./29 north of town at 5pm can see that the roads are not even really adequate at the current population.

In the end, it's great for the area that the VPTC is starting this discussion. However, I think the whole topic is about five years late... there is a lot of catching up to do, especially when areas like Northern Virginia, Richmond, and Norfolk/VA Beach are already far ahead in attracting the labor talent and the new companies that the VPTC is trying to bring in. Hopefully, this is not just talk and it will be followed by honest action.

[Rob]

I'm sorry, I meant to say I disagree with JT's comment, not Sean's. We Baltimorons can't really follow post lines.