Austin's entrepreneurial spirit offers lessons for city

Originally appeared in the Greenville News
Monday, October 31, 2005

By John Warner

I really enjoy going to Austin, Texas, because every time I come home inspired.

In 2001, a small group from South Carolina went to study Austin's endowed chair program. Since then, several industry/academic partnerships have been launched, like the Clemson International Center for Automotive Research and the SC Health Science Collaborative.

Recently, the Greenville Chamber of Commerce made an intercommunity visit to Austin. In the past 30 years, Austin has emerged as an entrepreneurial haven that attracts the third-most venture capital in the country. Why?

People really enjoy living in Austin and are dedicated to preserving and celebrating their distinctiveness. Their attitude is captured in a bumper sticker: Keep Austin Weird. The distinctiveness of a city starts with its local, independent businesses, so Austin fosters the growth and development of local companies and doesn't subsidize the mega chains that are making America look homogenized.

Creative energy takes many forms. Austin has a vibrant local music scene and is the self-proclaimed "Live Music Capital of the World." Several of us old fogies were surprised to find that the live music didn't really start until 11 p.m.

The answer that we heard over and over again is that the entrepreneurialism comes from tens of thousands of students at the University of Texas and other universities within 100 miles. There is a brain drain from other places to Austin, with 55 percent of the population having a college degree. Several large, homegrown companies, like Dell Computer, were started by people 19 to 24 years old.

John Thornton of Austin Ventures pointed out that many of the best entrepreneurs are managers in large companies with an idea about how to serve a niche of customers not well served today. They go to their boss and get the answer, "That's a great idea, but that is not the business we are in." Austin Ventures likes to talk with those managers.

John Sibley Butler of the Institute of Innovation and Creativity said that much of the entrepreneurial energy comes from immigrants and other outsiders, who have the inner fire to create something new and different.

Austin nurtures all these folks -- students, managers with new ideas and immigrants -- who don't fit into the power structures that exist in the community. On the plane ride to Austin, I sat next to a woman who had lived in Greenville only a year and told me how difficult it had been to get plugged into the leadership of our community. Now, if this was the only time I had heard this about Greenville, it would have been easy to write it off as an isolated case. But I hear it frequently, in particular from African Americans trying to become part of the leadership.

Leaders in Greenville don't perceive that it is a tight, closed system. We think of ourselves as enlightened and open to new ideas and people. So where does the disconnect come from? It's not uncommon to find major companies and other organizations in Greenville where almost all of the senior leadership has been in place 20 or 30 years. These leaders have deep relationships going back decades, and like anyone would, they tend to rely on people they have known and trusted for a long time.

The economist Joseph Schumpeter famously described the entrepreneurial dynamic that seeks "new consumers, new goods, the new methods of production or transportation, the new markets, the new forms of industrial organization ... that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one. This process of Creative Destruction is the essential fact about capitalism."

Austin has a creative destruction furnace that creates enormous wealth and keeps the community vibrant to a much greater degree than Greenville does. If we want to ignite an entrepreneurial furnace in Greenville, we need to tap into the creative energy in our community the way Austin has. We need to identify what is distinctive about Greenville and celebrate it. We need to make sure outsiders -- like students, managers with new ideas, and immigrants -- are supported and nurtured.

We left Austin with the feeling that a lot of people in Greenville are doing a lot of things right. I couldn't help but notice, though, how Keep Austin Weird made several Greenvillians very uncomfortable. But we can't have it both ways. We can't become a highly innovative and entrepreneurial place without promoting and celebrating the creative energy that comes from people with highly different backgrounds and perspectives.

And the really hard part for some of us is that a bunch of that creative energy is going to be really noisy at 2 o'clock in the morning.