When computer giant Apple first put roots down in Austin in the 1990s, Angelos Angelou was one of the Austin Chamber of Commerce’s lead recruiters who convinced the company to choose Texas.
The Austin Chamber had tried to recruit the company for years, missing out on an expansion twice, before finally landing a customer support center that promised to hire around 300 people over a six- to eight-year period.
But, what has happened since then has helped transform Austin into one of the fastest growing cities in the country, said Angelou, who now runs a consultancy called AngelouEconomics.
Apple didn’t stop at that 300 employee threshold, nor did it just remain a customer support center. Instead, it became one of the city’s largest private employers, employing more than 6,000 people in a wide variety of roles.
“I cannot say enough on the impact they have had in Austin. They helped brand the city” as one of the leading technology hubs, Angelou said.
If the Triangle were to land a company like Apple it could be just as transformative, he added.
“Economic development is all about building momentum,” he said. “You would have a project that will build momentum for decades to come.”
Apple in the Park
The News & Observer reported in mid-May that Apple's CEO Tim Cook had met with Gov. Roy Cooper on May 11, to discuss the possibility of locating a campus on the Wake County side of Research Triangle Park.
Soon after, the leaders of the N.C. General Assembly unrolled a proposal to change the way the state offers incentives to potentially help land a "major jobs announcement" in the coming months. They refused to name the company the incentives were targeting, but said a company would have to invest at least $1 billion and create at least 3,000 jobs to qualify.
Apple announced in January it wanted to establish a fourth corporate campus, which would bring thousands of jobs and billions of dollars in investments to the area it chose.
Apple has refused to comment on whether or not it is looking in North Carolina as a potential site for that campus or another facility, but multiple sources with knowledge of its search said that Apple would place workers temporarily in Cary while it builds a campus in the Wake County portion of Research Triangle Park. Apple has looked at a former Fidelity Investments building at 11000 Weston Parkway in Cary as a temporary home for its employees, the sources said.
When Angelou first started at the Austin Chamber, he said he competed with the Research Triangle for a lot of corporate expansions. But eventually, the Triangle began to distinguish itself as more of a life science cluster and Austin became more software and technology focused and the competition between the two areas cooled.
Both regions have benefited from specializing in those fast-growing industries.
When Apple moved to Austin in 1992, about 480,000 people lived in the city, slightly more than live in Raleigh now. Austin's population has more than doubled since then, and, since 2010, it has been the second-fastest growing big city in the U.S., growing at 17.9 percent. That growth has meant the city has added more than 144,000 new residents, in part because it has become a successful alternative to expensive Silicon Valley.
In comparison, Raleigh was the ninth fastest growing at a rate of 14.4 percent since 2010, equating to more than 58,000 new residents, thanks to its own smaller tech scene and thriving life sciences industry.
Though, in Austin, you can’t just put that growth down to Apple alone, said Nathan Jensen, a professor in the department of government at the University of Texas.
Apple is one of the city's four biggest private employers, along with Dell, IBM and Samsung, all of which are part of thriving tech scene with impressive salaries. The average salary for those with computer and mathematical jobs in the Austin metro area was $90,420, compared to the city's average annual salary of $51,840, according to the most recent data from the U.S. Bureau of Labor Statistics.
“Austin has an economic boom, so it's hard to say that Apple really stands out,” Jensen said. “But the perception is that Apple is a great local employer that pays high wages and has exceeded expectations in their local hiring.”
For comparison, computer- and math-based jobs in the Raleigh metro area have an average salary of $90,920 and in the Durham-Chapel Hill metro area it is $88,850, according to the BLS. That compares to an average annual salary of $51,390 in Raleigh and $59,340 in Durham-Chapel Hill.
The arrival of Apple in the Triangle would likely place an upward pressure on those wages "until supply expands either due to an expansion of tech programs at local educational institutions or from in-migration of tech talent," said Michael Walden, an economist at N.C. State University.
A different type of tech
But if the Triangle were to land a company like Apple, that would really help its reputation as one of the premier tech hubs in the country, Angelou said.
Broadening the region's tech industry could be the most important thing Apple does for the Triangle, said Al Segars, a professor in UNC's Kenan-Flagler Business School and a sometime-consultant for Apple.
As strong as the technology industry has been for the Triangle, since the founding of RTP in the 1960s, it's had "a fairly narrow technological identity," particularly in the days when Nortel reigned supreme and the Park was synonymous "with the networking revolution" the now-defunct Canadian firm helped usher in, Segars said.
Despite the area's focus on life sciences, Triangle tech companies have traditionally excelled in the business-to-business sphere, selling products and services that make other firms more efficient rather than creating them for the consumer market, said Segars, who estimates that upwards of 70 to 80 percent of the Triangle tech sector is B2B-focused.
But Apple, of course, is known for its consumer products, and it's now looking for ways to expand the smart-devices revolution it sparked last decade. Its arrival would tell industry "there are more plays in the playbook, there are more possibilities in technology than we've had in the past," Segars said.
That different specialty will open up new possibilities for the area in terms of attracting talent and companies to the region, said Arvind Malhotra, a professor of strategy and entrepreneurship at UNC Kenan-Flagler. Companies would follow Apple here, he said, just to be a part of its supply chain and because its brand would make the Triangle a marquee place to be.
The Triangle already has a thriving startup scene, but Apple could also potentially boost it as well. Apple has made half a billion dollars worth of acquisitions in the Austin area since moving there, Angelou said.
Strain on resources
But with that growth will likely come some growing pains. It's the same concern that many people have about Amazon possibly choosing to locate here, albeit on a smaller scale.
In Austin “there is no question that this economic development boom has had an enormous impact on the cost of housing, and has also lead to strains on a roads, airport, and our schools,” said Jensen from the University of Texas.
Segers said one of the problems looming is whether the Triangle's road network is up to handling the additional demand.
"It was not designed to serve, really, what we have now," he said.
The state's educators will also have to up their game if people want a lot of the jobs to wind up going to North Carolinians rather than transplants. While North Carolina's universities can turn out the sort of tech-oriented graduates Apple needs, its K-12 school system is another matter.
The question is “can we scale up as these (large companies) scale up?” said Malhotra, so that as many local people take advantage of the economy and these companies have to import fewer workers.
In Austin, where the market for tech talent is tight, the large migration of skilled workers to the city has helped companies expand there, Jensen said.
The Triangle currently doesn't have a glut of tech workers, and some fear that Apple’s presence could set up a “more competitive landscape for startups” in the short run as they compete for workers, said Molly Demarest, leader of Big Top, a networking group for tech workers that belongs to the Durham-based American Underground.
But the strong demand for talent here is likely part of the attraction for companies like Apple, as the region has “all the makings that are required to develop” the labor force over the long run, she said, adding that she doesn’t “think this is a zero-sum game.”
Between universities, community colleges, coding programs and other sources, the skills-development pipeline exists, and it’s more about “whether we can make it easier for people to get the skills to get the jobs,” she said.
Startups that adapt by creating “more inclusive work environments” likely will “be able to stay competitive” in the labor market with large companies like Apple, Demarest said.
The UNC system wants to do its part by trying to raise the number of people who obtain degrees in the sciences, technology, engineering or math (STEM) from one of its campuses
Statewide, it turned out 13,819 STEM grads in the 2016-17 academic year, 422 more than in the year before, said Jason Tyson, a system spokesman.
Of those, 5,075 got their degrees at N.C. State University, 1,914 at UNC-Chapel Hill and 197 at N.C. Central University, Tyson said.
UNC’s strategic plan calls for it to increase the number of STEM grads by 25 percent over six years, using the numbers from the 2015-16 school year as the baseline. That translates into graduating 16,746 people, statewide, in STEM fields by 2021-22.
It will have to pick up the pace a bit to meet that goal, as growth after one year was about 3.2 percent versus the roughly 3.8 percent compound annual growth required.
Another downside could be the strain on housing, especially in a region that is already struggling to build enough housing to handle the people moving to the Triangle every day because of its economy.
“There is no community that is prepared to accommodate that type of growth. It is not possible to anticipate that,” Angelou said. “In our (Austin's) case they told us 300. We could not anticipate that” it would be 6,500. The Triangle would at least have a good forecast of what to expect if chosen, he added.
What kind of impact Apple would have on the Triangle’s hot housing market is unclear, as it is still unknown what kind of jobs Apple would be creating.
“An important part in how a local housing market like Raleigh responds to a surge of new jobs has to do with the pace of hiring and scale of these new job centers,” said Aaron Terrazas, senior economist at real estate data company Zillow.
“Adding somewhere on the range of 3,000 new jobs probably wouldn't have much of a visible impact on Raleigh's housing market — it would be a small fraction (0.5 percent) of the region's 620,000-plus employment base — while 10,000 new jobs would be more meaningful, approaching 1.6 percent of the region's total employment.”
Terrazas was the author of an analysis published earlier this year that said landing Amazon would result in a 1.9 percent increase in rents in the Raleigh market. Though he didn’t provide numbers for a potential Apple impact on the area, Amazon’s HQ2 is expected to be significantly larger than Apple’s expansion.
“Any community that expects large corporate relocation is well served planning for this growth,” Terrazas said. “This means ensuring that there is sufficiently local housing supply in the pipeline to meet the needs of new workers — ranging from urban apartments to suburban homes."
But that could be tough in a region that has relatively low inventory of new homes, rising land prices and increasing costs for labor and supplies.
Jensen said that the growth in Austin has spurred debate about how to keep residents, small businesses and artists from being pushed out of central Austin by rising prices.
“The major debate is that our tremendous development has driven up housing prices in central Austin, and is pushing more and more middle and low-income residents farther outside of the city,” he said. “But the tension is between allowing greater density and making room for affordable housing in central Austin and keeping the unique character of our city … but I am afraid that these discussions are coming very late and Austin is already unaffordable for many people and our highway and road infrastructure is overburdened.”
The median list price of a home in Austin is $390,000, much higher than in the Triangle, where the median price of a home in Raleigh is $338,000 and in Durham $280,000, according to Zillow.
In Austin the median list price has risen 36.4 percent over the past five years, according to Zillow. However, despite that city's tremendous growth, median home prices in Raleigh and Durham have risen faster, both increasing more than 54 percent over the same period, according to Zillow.
But despite the upward pressures Apple would bring, most people would find it hard to say no to its potential benefits.
"I can't think of any severe downside to this," Segars said. "It tends to be very positive when a company like Apple decides your neighborhood is the one they want to live in."