Thursday 17 October 2019

Big opportunities for Irish firms in Texas

View of Austin, Texas downtown skyline
View of Austin, Texas downtown skyline

Sean McWilliams

An adage says that everything is bigger in Texas. While the adage may not apply to everything, it certainly applies to the scale of opportunity for Irish companies seeking their fortune in the US.

Covering an area over 10 times the size of Ireland and with an economy that rivals most nations, Texas offers fertile ground for companies entering or expanding into the US market.

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To put things in perspective, if ranked by GDP, Texas would be the world's 11th-largest economy (ahead of South Korea and Canada).

The state is home to six of the top 50 companies on the Fortune 500 and 50 from the full list.

While the energy sector is a major contributor to this performance, Texas has a diverse business landscape, featuring many well-represented industries including retail (notably JC Penny and GameStop), travel (American Airlines and Southwest) and technology (Dell and AT&T).

It's in the technology sector that the greatest opportunity for Irish companies may lie.

Regardless of industry, innovation is a key part of any company's strategy, as organisations seek to harness emerging technologies like artificial intelligence (AI) and 5G.

This has driven a change in how large enterprises work with startups. There is less of a sense of being in competition with potential disruptors and more of an openness to collaboration to solve challenges.

Many corporates now have venture arms and specific programmes for engaging with early-stage companies. For example, Oracle opened its first US startup accelerator in Austin last year.

This is also indicative of the region's emergence as a technology hub rivalling the traditional coastal hubs.

As costs continue to rise in crowded markets like New York and California, companies of all sizes are looking to other regions to enable their continued growth.

This trend is already well underway in Austin. Almost every multinational tech company has established a presence in the area, with many continuing to grow their footprint.

Apple, for example, already has 6,000 employees in Austin and recently announced plans to build another $1bn campus for 7,000 more.

Meanwhile, other large, traditional corporations are advancing their technology strategy by taking advantage of Austin's growing status as a tech hub.

Big retailers like Walmart and Home Depot have opened innovation centres in Austin to tap into its burgeoning tech scene. Establishing an in-market presence is vital for any company aiming to crack the US.

The fact that Texas provides access to a large array of customers, coupled with lower business costs, means that the state should be seriously considered by Irish tech companies as an alternative for entry or expansion beyond the conventional East and West coast markets.

Irish marketing-tech company StitcherAds is a good example of this strategy.

The Waterford-headquartered company helps retailers to build automated and intelligent marketing campaigns on Facebook and Instagram.

When Facebook announced the opening of its Austin office in 2012, StitcherAds set up shop beside them and was able to establish a relationship in a much shorter time frame than would have been possible with their main office in California.

Conor Ryan, co-founder of StitcherAds, says, "Austin was an obvious choice for our US HQ. Our primary partner Facebook has a large presence here, there's a great talent pool, and we love the weather.

"It's centrally located, helping us easily serve clients across the US, like Macy's, Saks Fifth Avenue, and Hotels.com. Even as we've expanded and opened a New York office, Austin remains our main hub."

As the Texas technology boom shows no signs of slowing, the potential for Irish companies to use it as a springboard to US success continues to grow.

Thanks to its central location between coasts, Texas is ideally placed for companies aiming to cover the entire North American market.

And with a new direct flight between Dallas and Dublin opening in June, the opportunity for Irish technology companies to explore Texas has never been bigger.

Sean McWilliams is a market adviser for digital technologies based in Enterprise Ireland's office in Austin, Texas

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