Earlier today, news came out that Apple has finalized the purchase of 650,000 square feet of space for its future customer service, and support operation. It’s a good move for Apple, as the company will be getting a nice check from the state to the tune of $21 million. It’s also good for the local community, as it will be adding 3,600 jobs to the Austin economy.
I just don’t get why Rick Perry said earlier this year that having Apple in the state will “further Texas’ potential to become the nation’s next high-tech hub.” Because it won’t, and he’s wrong.
Here’s what is really going on: Apple is relocating some customer service, support, and logistics to Austin. In exchange for opening this new facility and thousands, Apple gets a pile of cash. But to say that a customer service and support center will qualify Austin as a “high-tech hub” is one of the more ridiculous things I’ve heard come out of Perry’s mouth — which is saying something.
For starters, no one in Austin that is actually building technology thinks this expansion means anything for the local tech scene. I spoke with half a dozen people about this, all of whom are well-known in the community and wished to remain anonymous so as to not upset the Governor’s office, and no one was hedging when they collectively said that this move would do “nothing” for the Austin community. More importantly, these people said that this wouldn’t bring any other technology companies to the area.
This isn’t the first time that Perry has tried to have major technology companies move to Texas. There have also been rumors that the Texas Governor tried to have Facebook relocate some of its employees to the Austin area. That worked to some extent, and Facebook does have a local office with engineers working on actual technology, but the Governor failed to get a really big name company to relocate a sizable portion of its staff.
Thankfully, along came Apple, which saw an opportunity in the form of the Texas Enterprise Fund. As is normal for the company, it capitalized on it. Now, it not only gets $21 million in investment from the State of Texas, but it also gets to open up a facility in a place where the living is good, and where the taxes are low.
All of this is well and good, but the part that really bugs me, and what would concern me about this move, is that this won’t do anything to further Texas or Austin as a tech city. It does help to have Apple in the city from a branding perspective, but is it worth $21 million? Hardly. If I was a Texas resident, I’d be rightfully ticked off about this waste of money.
In fact, it’s almost safe to say that this is money down the drain for the Texas Enterprise Fund, since it won’t have any substantial effect on the local economy. There will be minimal impact due to higher salaries from Apple, but nowhere near the impact that we’d see if Apple had opened an actual technology facility.
Think about how this hyperbole on the part of the Governor looks to other companies that Texas is trying to woo. Yes, seeing Apple’s logo on the Texas Enterprise Fund’s website is initially a good thing. But any executive worth her salt would take a cursory glance at the situation and see that yes, “Apple is in Austin,” but not the part of Apple that actually makes technology.
Which is why, when Rick Perry says things like, “the expansion of their Austin facility adds to the growing list of visionary high-tech companies that have found that Texas’ economic climate is a perfect fit for their future,” I say it’s a bunch of empty rhetoric, lacking substance and meaning.