KXAN story on IC²: What smaller Texas communities can learn from startups about COVID-19 economic recovery


by: Alyssa Goard

Posted: Oct 12, 2020 / 05:14 AM CDT / Updated: Oct 12, 2020 / 11:01 AM CDT

sign in Boerne, Texas alerts visitors to open businesses
Orange signs downtown in the city of Boerne alert visitors to open businesses, in hopes of encouraging people to buy local (KXAN Photo/Alyssa Goard)

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BOERNE, Texas (KXAN) — As the coronavirus pandemic continues to take a toll on lives and healthcare systems across the country, communities are also having to contend with the economic fallout of the COVID-19 pandemic. Now, 58 Texas communities beyond metropolitan areas have a new lifeline in weathering this storm: an accelerator program that uses the lessons of business startups to help them create paths forward.

Smaller cities and communities farther away from urban centers in Texas, who might otherwise have limited recovery resources, have been brought together in a new way during the pandemic that’s leading to solutions from education to business to healthcare.

Their community leaders are getting a university-sponsored crash course in the startup mentality that has worked for so many businesses in Austin, in hopes of steadying more regions in these uncharted economic waters.

Keeping Main Street running

In the city of Boerne in the Texas Hill Country, the makeup of businesses looks different than its much larger neighbor 30 miles northwest, San Antonio.

dienger trading co. in downtown boerne
The Dienger Trading Co. is located at a historic building in downtown Boerne (KXAN Photo/Alyssa Goard)

Amy Story, the president and CEO of the Boerne Kendall County Economic Development Corporation explained that around 90% of Boerne’s businesses are “small businesses,” meaning they have 20 employees or fewer.

The city prides itself on its historic downtown with quaint local storefronts. Many visitors are drawn into the county by breweries, wineries and distilleries, but with the pandemic, revenue from tourism is less dependable.

It’s Story’s job to bring new economic opportunities in to the area and she says her work has changed dramatically since COVID-19 began. Instead of focusing on attracting businesses, she said her focus had to switch to just keeping those businesses in town and afloat.

“We have a big festival, Dickens on Main, that happens around Thanksgiving time, and I think a lot of the retailers, in particular, are looking to ‘How strong can we finish the end of the year to make up for the ground we lost in spring and summer?’” Story surmised.State of Texas: Lawmakers weigh ‘solutions’ proposed for education equity during pandemic 

“I do think that the first of the year, many places will see some places that simply can’t make it,” Story said of the business outlook for many smaller communities. “Our hope is that we don’t.”

Story’s organization is funded by the city, the county and local businesses. Unlike other economic development groups, it is not funded by tax dollars.

welcome signs along Main Street's storefronts
Storefronts along Main Street in Boerne welcome in shoppers, instructing them to wear face coverings upon entry (KXAN Photo/Alyssa Goard)

“We are constantly looking for ways to stretch our dollars and still remain effective,” she explained.

It would cost tens of thousands of dollars for her organization to hire a consultant to give economic advice on pandemic recovery. But one day when Story was looking online, she saw a program from her alma mater that could offer her community personalized advice for free.

She was selected to represent Boerne as one of the communities in a new program through the IC² institute at the University of Texas at Austin. As part of the program, she’s been meeting with her peer communities virtually over the past few weeks to come up with a roadmap for economic recovery that is tailored to the needs of her community.

A ‘secret sauce’ for economic resilience

Even prior to the pandemic, IC² institute at the University of Texas at Austin had already found that smaller and more isolated cities, as well as rural areas in the state, were facing a unique set of hurdles. These communities, the institute found, “were dealing with losses in population, rural hospital closures, limited broadband access, less diverse economies, and low budgets to address problems in the community.”

Dr. George Kozmetsky, IC² founding director, speaking to UT Austin students in the 1990s
IC² founding director Dr. George Kozmetsky speaks to UT Austin students in the 1990s (Courtesy IC² Institute)

As COVID-19 began impacting the state, the institute created a “Regional XLR8” program, anticipating challenges for Texas communities that are not in metropolitan centers. IC² took the same entrepreneurship principles it has honed since its inception in 1977 — the same principles it has applied in places around the United States and in 43 other countries.

The “secret sauce” for innovation the institute has used for decades involves getting people to work with one another as opposed to working separately, explained Dr. Greg Pogue, Deputy Executive Director for the IC² Institute. It seems intuitive, but Pogue says what really makes the difference is forming groups so there are peer-to-peer interactions.

“This motivates, this helps solve problems and creates this network effect that doesn’t work if all you’re doing is picking up a phone occasionally,” Pogue added.

The installation of the sign marking the IC² Institute at UT Austin
The installation of the sign marking the IC² Institute at UT Austin, date unknown (Courtesy IC² Institute)

He noted that in the 1970s and ’80s, this strategy was what helped kickstart Austin’s trajectory as a hub for business and innovation.

“What we learned in Austin’s history was Austin was successful tethering it’s future to Silicon Valley and San Francisco,” Pogue said, citing regular interchanges between the two areas such as the “nerd bird” direct airline flights between Austin and San Jose. “Tethering” the well beings of multiple communities together in this way can be mutually beneficial, Pogue argued.

Enter the Regional XLR8 program

Map of community leaders participating in the IC² Regional XLR8 program
A map of community leaders participating in the IC² Regional XLR8 program for pandemic economic recovery (Courtesy IC² Institute)

Local economic development corporations, city and county governments, and regional associations were allowed to apply for the XLR8 program on a first-come, first-served basis. The funds for the program came through both UT Austin, the flagship university of the University of Texas System, and outside donors. The selected communities got to participate for free.

A student in the “Home to Texas” internship program conversing with another
A student in the “Home to Texas” internship program assists with the production of algae for a tech startup (Courtesy IC²)

Over the summer, IC² dispatched 95 students to analyze these areas. Some students, such as those in the “Home to Texas” program, returned to their hometowns for summer internships and could carry out some work in person. Others gathered this data remotely to follow pandemic precautions.

These students completed 11,000 combined hours of research with the selected regions, including 800 interviews and 7,600 community surveys. The findings were then sent back to the institute and to the participating communities.

All 58 areas involved in XLR8 have to participate in a six-week virtual course with the institute, which is going on presently.

A student in the “Home to Texas” internship program seated on a Del Rio bench
A student in the “Home to Texas” internship program helps catalogue and document tourist sites in Del Rio (Courtesy IC²)

Like all the other benefits communities receive in this program, the course is free. But participants have to do homework and answer tough questions such as, “how does your community view itself?” and “how open is your community to growth?”

In normal times, the institute might schedule a conference or in-person meeting, Pogue said. But to abide by the precautions communities are taking to curb the spread of COVID-19, the XLR8 attendees have been meeting entirely online and making it work through Zoom calls.

Even prior to the pandemic, the IC² Institute has focused on the well-being of smaller Texas communities.

“It’s not just about economic success,” Pogue said. “We’ve seen it happen since the Great Recession — the problem is it has been dramatically been concentrated within a few individuals, leaving most people working and most people having less.”

READ MORE on the KXAN site: https://www.kxan.com/pass-or-fail/what-smaller-texas-communities-can-learn-from-startups-about-covid-19-economic-recovery/

Related Stories:

Sept 24: State of the State of Texas Report released to the public.

Oct 12: Yahoo News: Report On Texas Economy Amid Pandemic Paints Grim Picture


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October 12, 2020