Austin Manufacturing — Poised to be the Next Boom

Austin, the fastest growing city in America for three years running according to Forbes, also dominated American City Business Journals’ “Best Cities in America for Small Business” list the last four years in a row. It’s the “Best City for Job Seekers” according to, and the McCombs School of Business was ranked as one of the top ten entrepreneurship programs in the world by Bloomberg Businessweek. While other regions have suffered through the downturn, Austin has withstood the worst of the economic storm and continues to be what Kiplinger calls “the country’s best crucible for small business,” ranking it first in it’s list of the “10 Best Cities fort the Next Decade.”

So it’s no surprise that Austin’s thriving economy and entrepreneurial environment may be setting the perfect stage for an even larger boom. Just as information technology produced “Silicon Hills” in the 1990’s, manufacturing may become the primary driver of Austin’s long-term fortunes.

Austin Manufacturing on the Rise

Approximately $13.3 billion of Austin’s $86 billion gross metropolitan product came from manufacturing, according to 2010 Bureau of Economic Analysis data — almost $3 billion more than 2009. But that increase isn’t just the result of improved economic conditions or technological innovation; it’s the product of a creative, educated workforce.

Austin’s low cost of living and high quality of life have attracted talent from every part of the country, and the region’s population growth continues unabated. This highly educated, increasingly productive workforce has prompted business leaders to focus their attention on Austin’s manufacturing potential, leading to dramatic growth.

Tom Lonsdale, founder and CEO of Cypress Industries, has seen it for himself. “Our business increased by more than 25 percent in 2012, and we anticipate, conservatively, an increase of more than 20 percent in 2013. Our critical advantage is a creative, educated group of employees that knows how to apply a wide range of technical and manufacturing skills to any project.”

Austin’s manufacturing sector has been adding jobs steadily for more than two years, and the outlook favors continued growth. But as technology continues to redefine manufacturing, the key to success will be education.

Education Manufactures Opportunity

With major changes in automation and small-scale manufacturing on the horizon, it’s more important than ever to focus attention on education, according to Lonsdale. “We never know what our customers are going to bring us; their needs are constantly changing. If we don’t have talented and trained people that can do the work, we don’t get the business.”

Cypress Industries isn’t the only company that’s on the lookout for talented, resourceful employees. That need is one of the primary reasons that Lonsdale and other local business owners have banded together to form the Austin Regional Manufacturers Association, an organization focused on advocacy, education and networking that will give a voice to the more than 1,200 manufacturers in the area and help them develop strategic relationships, encourage sound government policies and expand the labor pool.

“As product design moves closer to manufacturing, a wider range of skills are needed to take a concept from the drawing board to the delivery truck,” says Lonsdale. “Designers, engineers and assembly workers must become more collaborative — they can’t use different vocabularies. Education and networking make that possible.”

Manufacturing Flexibility is the Future

Companies need flexibility in manufacturing locations. Local engineers and manufacturing experts develop designs, then produce small prototype or moderate volume runs locally. Then, depending on the project, businesses may want to develop a high-volume run either in the U.S. or overseas to facilitate access to raw materials or to mitigate costs, including shipping. A flexible manufacturer that can meet these needs and deliver consistent quality will be the one that secures the business.

Lonsdale believes that companies like Cypress Industries, with facilities in Delhi, India; Dongguan, China; and Austin, Texas, can be at the forefront of this movement. “We’re committed to creating a manufacturer’s culture in Austin that’s as vital and engaged as the information technology culture that dominated the last 30 years. A sea change is coming, and we intend to lead it.  Our company can meet customer demands throughout the product lifecycle. We can manufacture the identical product in the U.S., India or China, and service companies with a global footprint.”