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Asian-American business boom in Austin mirrors fast-growing community

When Mayor Steve Adler visited Asia this summer to recruit new investment in Austin, he was seeking to build on a business boom already underway.

At least two Austin companies secured investment deals from China and Taiwan, but a main objective of the two-week trip was to tout the region’s vibrant Asian-American business community to a new audience.

“I want to make sure that we’re finding the greatest opportunity we can to all of the city, but particularly a fast-growing segment,” Adler said.

Central Texas counted more than 10,000 Asian-American-owned businesses in 2012, according to the most recent Census Bureau data — a 142 percent increase since 2002.

The comfortable cost of living, the city’s amenities, the draw of the University of Texas and a strong technology and startup culture have attracted Asian-Americans — who tend to have higher education levels and are often attracted to sciences and professional industries — to live and do business in the area.

But Asian-American business owners say the growth has come despite hurdles that many others don’t face.

Asian-American businesses on average boast annual revenue 19 percent less than Austin businesses overall, according to Census Bureau data.

READ: The needs of Austin’s diverse, fast-growing Asian-American population are masked by the model minority myth

Immigrant-owned businesses and refugees who have limited English proficiency often don’t know about opportunities to grow their businesses or about regulations that they must meet. Asian-Americans are also underrepresented in government contracting programs for minorities and women, according to the Greater Austin Asian Chamber of Commerce.

“When you break us into smaller groups, it’s a different picture,” said Marina Bhargava, executive director of the Austin Asian chamber. “There are segments in the community that really do need help.”

Still, Bhargava doesn’t see the growth slowing.

“It’s the kinds of jobs that are being created here. It’s also friends and family — once somebody is here they tend to tell them that Austin is a great place to live, so it’s both a result of targeted efforts with the tech firms, but also it’s organic,” she said.

Why the boom?

The Austin Asian chamber estimates that there are 13,000 Asian-American businesses in Travis, Williamson, Hays, Bastrop and Caldwell counties.

Several Asian-American business owners told the American-Statesman that they moved to Austin for personal reasons — the city meets their adventurous lifestyle, is family-friendly and is less expensive than other major cities.

Only after moving did they realize Austin’s favorable economic climate for starting businesses.

Amin Salahuddin, who was born in Pakistan but lived in London and New York City as a child, moved to Austin in 2010 to be closer to his nine siblings and father, who had dreamed of retiring in Texas, where he had received his aeronautical engineering training.

Salahuddin started Electronic Interoperable Exchange Systems, which provides software development and information technology services all over the U.S., the same year he moved. Although he experienced three years of losses, his company now manages 17 health insurance companies and has worked in more than a dozen other industries. This year has been its most successful year so far.

“In other cities, your ideas don’t flourish because, on the other side, nobody understands it. In Austin, it’s different. If you talk to someone with an idea, you can get a buy-in on that idea,” said Salahuddin, who also founded a free health care clinic in Northeast Austin under the same name as his company.

Paul Kim, board chairman of the Austin Asian chamber who accompanied Adler and city economic development officials on the trip to Asia, said he has watched the local Asian-American business community transition from predominantly retail businesses to tech companies.

He said the tech industry’s growth, particularly among Asian-Americans, occurred as South Korea-based Samsung Semiconductor deepened its roots in Austin.

According to Census Bureau data, the number of professional, technical and scientific companies — the largest sector of the region’s Asian-American-owned businesses — grew 33 percent between 2007 and 2012.

“I see a lot of international companies coming here to establish themselves to help out Samsung, but they also turn into a bona fide support business for other tech companies as well,” said Kim, who owns ATX Environmental Solutions, a mechanical engineering firm that works with semiconductor manufacturers.

Areas such as Del Valle, Bastrop, Pflugerville and Round Rock are triple freeport zones, meaning that the city, county and school district don’t tax goods that are shipped in and out of the state within 175 days. That and other incentives, such as free trade zones, attract manufacturers to Central Texas.

“After our last recession, a lot of California-based Asian entrepreneurs started looking for an alternative place, and Austin was especially attractive, mainly in cost,” Kim said.

Retail businesses that have traditionally served Asian-American clientele have also pledged to come to Austin as the Asian-American population has ballooned, recently surpassing African-Americans as the city’s third-largest demographic group.

Over the summer, 99 Ranch Market, a California-based Asian grocery chain, announced its 42nd location in North Austin near the former Highland Mall.

READ: Local shops, restaurants flocking to redeveloped Linc

The grocery store will offer both Asian and American groceries with an emphasis on fresh produce, the latter of which is specific to the Austin market.

“Because we are an Asian grocery store, we certainly look at the Asian demographic. We have been looking at Austin for a long time because it’s a fast growing city and a city of opportunity,” said Samantha Chien, head of real estate for 99 Ranch.

The challenges

Jaeil Noh and his wife said they moved from South Korea in 2012 so their kids could receive a better education.

Noh has a Master of Business Administration degree from UT, and his wife is a pharmacist and nutritionist. Putting their expertise to use, the couple opened their Northwest Austin restaurant Fresh Heim last year, specializing in healthy international fusion cuisine.

The restaurant has enjoyed modest success and positive reviews online, but Noh says his shaky grasp of English works against him. He said he wishes he could better convey his restaurant concept and understand his customers more.

“Sometimes I feel difficultly in expressing my true feelings to my customers. In terms of customer service, I need better English ability,” Noh said.

Bhargava said that lack of cultural and linguistic resources on how to start and maintain a business puts many immigrant business owners at a disadvantage. For example, many mom-and-pop stores don’t have a website or social media pages and are unaware of the advantages of joining chambers of commerce.

Asian-American business owners often value lower costs over convenience and aesthetics, and finding contractors who understand that can be difficult, said Min Choe, a longtime Austin resident who owns Jenna’s Asian Kitchen in Northwest Austin.

Although they make up 6 percent of total businesses in the Austin area, Asian-American businesses account for 5 percent of total revenue.

Drilling down into the different Asian ethnic groups, the disparities are even larger. Indian-Americans, who tend to have higher education levels and knowledge of English, have the largest revenue per business at $623,000, while Vietnamese- and Filipino-Americans have the smallest — $178,000 and $162,000.

“We have to do a better job with cultural competent assistance within the city,” Adler said. “Certainly we need to do a better job with bridging language barriers in the city and … of recognizing that the Asian community is not monolithic, that there is real discrete segments within the Asian community that have different kinds of education and language skills.”

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