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Technology & Entrepreneurship

H-E-B Innovation Center To Austin May Highlight San Antonio 'Talent Shortcomings'

Artist rendering of Innovation Center

San Antonio-based grocery chain H-E-B announced Wednesday it would build a new tech innovation facility in Austin.

The decision has drawn critical comments online, and many San Antonio technology leaders have expressed disappointment.

David Heard, CEO of Tech Bloc, the local industry advocacy organization, said the decision to locate the office in Austin makes sense, but when one of the largest employers in town doesn’t pick you for its future tech hub, it doesn’t look great for the city’s efforts to build a tech community.

“The statewide and national perception: San Antonio-based major grocer goes to Austin to stand up its innovation tech center,” he said. “Look, I get it, but that’s not great PR.”

The move highlights San Antonio’s tech talent shortcomings, and is a call to action for the community to do more, Heard said.

“Our hope is that San Antonio makes it such an easy business decision for them in the future to locate those jobs here,” he said, “because, we are not there yet.”

Austin has more than twice the number of tech workers to fill the hundreds of positions the company will now hire.

Heard praised H-E-B for building a tech economy pipeline by funding technology-themed schools, called the Centers for Applied Science and Technology. It partnered with Tech Bloc on CAST Tech downtown.

No current San Antonio technology jobs are going to Austin, according to the company.

The new 81,000 square foot facility to be renovated on Austin’s east side will be “state of the art,” said the company in a news release, featuring world-class design from IA Interior Architects. The company said it is about bringing the company’s Austin technology workers together under one roof, including the staff of food-delivery app Favor, which it bought earlier this year.

While HEB will hire hundreds more in Austin, San Antonio will continue to be part of that growth, said Dya Campos, HEB director of public affairs.

“We are very confident that we can grow our tech presence in San Antonio and Austin and serve as a way for more collaboration between the two cities,” she said.

According to a statement from the San Antonio Economic Development Foundation, there wasn’t a “discrete competitive process” for the hub since the company is consolidating its footprint.

“By putting a center in Austin, they declare they’re really serious about doing whatever it takes to fight,” said Dirk Elmendorf, who co-founded Rackspace, which opened an Austin-based innovation center in 2011.

Elmendorf said while he is disappointed H-E-B didn’t choose San Antonio as the place to open an innovation hub, he understood the decision. In the past four months, he’s struggled to hire software developers for his new venture called Brokerage Engine. Much of the advice he got was to move the company to Austin, he said.

“Obviously I didn’t agree with that statement but I’m also not fighting Walmart today,” he said.

The struggle to hire developers and other tech talent is a common complaint in San Antonio and nationwide.

“I had to change my business model,” said Ryan Kelly, CEO of San Antonio digital marketing firm Pear Analytics. He has had to allow people to work remotely from other Texas cities.

“The people I need don’t live here,” he said, after receiving few San Antonio applications to a recent senior digital marketing position he posted. After three months, he ended up hiring someone in Dallas.

Paul Flahive can be reached at paul@tpr.org or on Twitter @paulflahive