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The History of Texas’ Startup Ecosystem

Celebrating the 30th Anniversary of UT’s Austin Technology Incubator

Illustration by Kevin Rathge

Austin’s status as an entrepreneurial hotbed is undeniable. A 2018 study from the Chamber of Commerce found that startups make up a larger percentage of businesses in Austin than in nearly any other major U.S. metropolitan area.

Although the startup culture that exists in Austin today seems relatively new, its foundation was laid decades ago and has been maintained ever since by the Austin Technology Incubator (ATI). ATI is the deep technology incubator of The University of Texas at Austin that works with university and community entrepreneurs to commercialize breakthrough innovations. It helps entrepreneurs and startups by providing mentors, tools, resources and connections for founders to grow and attain funding. ATI benefits students, faculty members and the state of Texas. It provides an educational experience for both undergraduate and graduate students, a research laboratory for entrepreneurs and tech ventures, and economic stimulation for the Central Texas area and beyond.

Today, ATI is the oldest active technology incubator in the country. Celebrating its 30th anniversary this year, ATI has launched more than 300 graduate companies and has generated more than $3 billion in economic impact in Texas.

“ATI plays a key role in developing meaningful solutions to today’s global challenges,” says Gov. Greg Abbott. “Their contributions have been a catalyst for greater investments and economic development across Central Texas.”

When ATI was founded in 1989, Austin was a very different place. The city was in an economic downturn, and vacant buildings dotted the landscape. But George Kozmetsky, the founder of UT’s economic thinktank the IC² Institute, saw Austin’s potential to become fertile ground to grow a tech-oriented startup community. Kozmetsky connected Austin’s academic, business and community leaders around this goal and launched ATI.

Fostering a culture of entrepreneurship is one of the most powerful ways universities act as economic accelerators."
—Art Markman

“Fostering a culture of entrepreneurship is one of the most powerful ways universities act as economic accelerators, which in turn drives the future of economic stability, as ATI has proved,” says Art Markman, director of the IC² Institute. “Just as ensuring entrepreneurship is part of the academic experience, which inspires industry creativity and innovation.”

For decades, ATI focused on three industries: hardware, software and semiconductors. Industries that are now part of Texas’ global reputation. Looking forward, ATI is committed to developing more “deep tech” startups. This term refers to companies that want to use technology to solve major problems faced by humanity today and in the future. ATI is currently supporting companies tackling global problems in circular economy, energy, food and ag tech, health care, mobility and water sustainability.

“We are working with innovators that are solving problems around capturing carbon efficiently, developing a clean, sustainable water supply, new drugs for cancer treatment, recycling plastics and other waste to build a circular economy, and so much more,” said Mitch Jacobson, director of the Austin Technology Incubator.

What the next three decades hold for the future of technology is anyone’s guess. Whatever that entails, ATI says it will be there, investing in a better future and expanding the startup ecosystem for which Austin is so proudly known.

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The University of Texas at Austin

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