Michael Kim landed his job as HomeAway expands to meet growing demand for its online house-rental service.
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Yet Austin also offers a model of hope. The city's surfeit of computer-programming talent allowed a video-game outfit to hire 50 developers and designers in the past two months. A manufacturer is building a new plant north of town to take advantage of the growing commercial-lighting industry even as its construction-related business falls off. A pharmaceuticals start-up is looking for new lab workers. Some companies are expanding, and others--markers of the city's entrepreneurial spirit--are starting from scratch. Austin is emerging as one of the first pockets of the country where people are getting back to work, showing that even in this dreary economic environment, job creation can happen--and illustrating how it will eventually take root around the nation.
One Created Job
To start to understand the process, swing by HomeAway's downtown Austin headquarters. This is where, sometime in the next nine months, a marketing manager will show up for his first day of work at one of the economy's newest jobs.
The story of how this job will come to exist starts five years ago, with one man's frustration at how hard it was to find and rent a beach house for his family vacation. Brian Sharples, who was between jobs at the time, didn't understand why he couldn't go to a single website--as he would go to Expedia for airline tickets--to find a comprehensive list of houses for rent. So, with a business partner, he started such a site. Five years later, the company has $120 million a year in sales, employs 600 people in five countries and is ramping up its marketing push to grow even larger. That's why it needs a new marketing manager in Austin.
HomeAway is hiring for a very simple reason: people who own houses and want to rent them out are happy to pay $300 a year to have the company spread the word--which it did in a Super Bowl commercial. "Jobs get created by providing a product or service that's better than what's out there," says Sharples. "There was an existing market for vacation rentals, and we've created efficiencies in that market. Now that it's cheaper and more efficient, more people are doing it, and the market is expanding."
In other words, to create jobs, start by creating something people are willing to pay for.
That's not as self-evident as it may sound. There is no shortage of theories about why companies aren't adding jobs faster. Banks won't lend to enable them to expand. Extra workers are too expensive because of taxes and health care costs. But the real clog in the nation's job-creating machinery is much more basic: a lack of demand for goods and services.
Just ask small businesses. American Express did that in a January survey, asking, What would most spur companies to go out and hire? An increase in customer demand, according to 42% of the respondents. Tax credits and better access to loans trailed, at 11% and 5%, respectively.