The city, no doubt recognizing that challenge, works with the Austin Technology Incubator, one of the largest business incubators in the country. The ATI, a not-for-profit division of UT, assists local entrepreneurs and fledgling companies by offering counsel, providing infrastructure support and helping to locate investors. It operates in conjunction with UT's McCombs School of Business and has assisted more than 150 entrepreneurial teams in raising more than $725 million in investor capital.
Issac Barchas, ATI's director, grew up in Palo Alto, Calif., the heart of Silicon Valley, and says he sees many of the same cultural, ideological and educational factors he did in Silicon Valley in the 1970s.
"[Those factors], coupled with the abundance of tech employment, Austin has a similar vibe to the early days of Silicon Valley," Barchas said.
The cost of living is attractive to entrepreneurs as well. In 2009, housing prices in Austin were 16 percent below the national index, almost 300 percent lower than housing costs in San Francisco, the Council for Community and Economic Research reported.
Austin also boasts one of the country's lowest unemployment rates for a major metropolitan area. At 6.7 percent, the U.S. Bureau of Labor and Statistics' data shows that Austin's unemployment rate is the lowest among the 15 largest cities in the United States.
New York City has long been the international business, finance and media capital of the U.S., and arguably the world. In the 1990s, NYC was also one of the hot spots for the dotcom boom, when dozens of online startups brokered successful private buyouts or IPOs. Local media dubbed the expanding dotcom industry in the city "Silicon Alley."
When the online bubble burst in the 90s, New York's tech industry took a major hit. Recently, however, Silicon Alley has made a strong return on the backs of cutting edge media and social networking companies such as Meetup and other peer-networking sites. Meetup is an online network that allows people with shared interests to form clubs in local communities. It was one of the first companies to emerge from the rubble of the dotcom burst.
Andres Glusman, vice president of strategy and community for Meetup, said the city is drawing all types of young talent and entrepreneurs because of its "brewing tech scene."
"There is a feeling of momentum here," Glusman said. "There's never been a better time for the technology sector in New York City than right now."
Some believe the rising tide of new media technology in New York City may be attributed to the decline of traditional information gathering, such as reading the newspaper. As technology advances in every sector, industries are looking for alternate means to reach goals (via mediums such as Meetup and other social online constructs), which makes room for the city's bevy of new media companies.
"At this point, we are looking for new ways to consume and distribute information," said Marilyn Byrd, of executive recruitment firm Byrd Associates in Manhattan. Byrd has recruited talent for iVillage, Beliefnet and Everyday Health.
Byrd, who specializes in start-up and early-stage digital companies, said the opportunity for new technologies and companies in the city are endless. "New York City is the media center of the country, maybe the world," she said. "Information is shared and developed here unlike anywhere else."