2017 ut austin mccombs business forecast in austin: confidence in uncertain times

Jay C. Hartzell, Dean, McCombs School of Business

Jay. C. Hartzell, Dean, McCombs School of Business

University Initiatives

President Fenves – State of the University Address

• Faculty Investment

• Research and the Student Experience

• Cross Campus Collaboration

• Diversity and Inclusion

• Bridging Barriers – acknowledging world’s biggest problems (Healthcare, etc.)

• BBA - Ranked No. 6 for Best Undergraduate Business (Bloomberg Businessweek)• BBA/BHP - # of applications - 7,759/1,688; Avg. SAT score – 1362/1494;

Avg. class rank – 4.7%/2.2%• Starting salaries for top 3 Industry placements:

• Consulting $68,808 • CompTech/Eqpmt/Software $59,060• Banking (Investment) $81,043

• MBA - Ranked No. 1 for Best Value Among Highly Ranked MBA Programs and 16th Best Graduate Business Program (U.S. News & World Report)

• Class of 2017 and 2018 - # of applications - 2,266/2,533; Avg. GMAT score - 694/700; Avg. Avg. # of years of Work Exp. – 5.6 yrs./5.5 yrs.

• Average starting salary - $113,296 + $27,981 bonus

• New MS Programs

• Rowling Hall

Recent Successes

McCombs: Strategic Plans and Initiatives• Faculty

• Increase faculty hiring and retention• Research Center, expand cross-campus collaboration

• Communicating our knowledge: Students• McCombs Scholars program • Expand cross-campus opportunities

• BHP Program collaborations• Certificates/Minors• Entrepreneurship• Healthcare

• Curricular and co-curricular activities• Location and market-driven opportunities

McCombs Initiatives

McCombs: Strategic Plans and Initiatives (2)• Communicating our Knowledge: Beyond Campus

• Alumni, corporate partners, supporters• Alumni engagement• “Coastal” presence

• Outside world• Marketing and branding

• Over-arching initiatives• Facilities• Leadership• Ethics

McCombs Initiatives (2)

Texas Economic Update

Mine YücelSenior Vice President and

Director of Research

Federal Reserve Bank of Dallas

January 11, 2017


Texas Economic Update• Texas survived the recent energy bust with few deep scars. • Texas employment growth was moderate but slightly higher than in

2015. • 1.6% growth through November.• 174, 241 jobs• Growth accelerated in the second half

• Texas Business Outlook Surveys strengthening• Texas Energy Survey increasingly optimistic• Worst may be behind us, but risks remain


2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 YTD

-5-4-3-2-1012345

2.01.51.3 1.6

U.S. TexasY/Y percent change, SATexas 2016 job growth above nation’s

NOTE: Shaded bars represents annualized November 2016/December 2015 growth.SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by Federal Reserve Bank of Dallas. Federal Reserve Bank of Dallas

Goods vs Service Sector Employment

Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016 Q3 2016 Q4 2016-7-6-5-4-3-2-101234

Goods-ProducingService-Producing

Q/Q employment growth, SAAR

NOTES: Quarterly data through Q3 2016; partial fourth quarter based on Nov/Sept. 2016.SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by Federal Reserve Bank of Dallas.

Goods sector weak


Texas employment growth rates by sector

SOURCES: Bureau of Labor Statistics; Texas Workforce Commission; seasonal and other adjustments by Federal Reserve Bank of Dallas.

(NAICS Super Sectors, SA by FRB Dallas)2016

-16

-12

-8

-4

0

4

8

1.2 1.8 3.0 2.6 3.6

-2.5

2.2 2.4

-11.7

-1.4


Percent change (YTD)

Texas employment growth by sector(NAICS Super Sectors, SA by FRB Dallas)

2016


-30-20-10

01020304050

26.8 30.7

44.638.7 42.2

-19.3

14.3 15.0

-24.9

-2.7


Thousands of jobs (YTD)

Metro Employment Growth


2013 2014 2015 201695

100

105

110

115

120


San Antonio

Midland & Odessa

HoustonEl Paso

DallasAustin

Noncurrent C&I loans fewer vs. 1980’s

NOTES: Includes commercial banks and thrifts beginning in 2005; excludes Wells Fargo South Central in Houston; data through September 30th 2016. SOURCE: Federal Reserve Bank of Dallas.

0

2

4

6

8

10

12

14C&I

Total

Real Estate

Consumer

Texas banks


Percent

Texas Home Prices and Inventories

SOURCES: Multiple Listing Service; seasonal and other adjustments by Federal Reserve Bank of Dallas.

2000200120022003200420052006200720082009201020112012201320142015201680

90

100

110

120

130

140

150

2

3

4

5

6

7

8

9Index, Jan.'00=100, SA Months in Inventory, SA

Texas Inventory of Unsold Homes

Texas Real Median Sale Price


NOTES: Dec. production estimate is the average of weekly OGJ data; monthly series is from the EIA.SOURCES: Baker Hughes; Energy Information Administration (EIA); Oil and Gas Journal (OGJ).

Texas rig count and oil production rise

2013 2014 2015 2016 20172.02.22.42.62.83.03.23.43.63.8

150250350450550650750850950

Texas crude oil productionMillion barrels per day

Texas rig count

Oct.3.18

Dec. 30324

Dec. estimate3.51


Business activity up in Q4 Dallas Fed Energy Survey

NOTES: Percent reporting decrease is plotted as a negative value; percent reporting no change is plotted symmetrically around zero. SOURCE: Federal Reserve Bank of Dallas.

Q1 2016 Q2 2016 Q3 2016 Q4 2016-80

-60

-40

-20

0

20

40

60

80No change Increase No change

Index = -42.1

Index = 26.7Index = 13.8

13.9

30.1

56.0

31.6

50.7

17.8

44.2

38.3

17.5

Index = 40.1

51.0

38.1

10.9


NOTES: Line depicts the mean and bars depict the range of responses; 69 E&P firms answered this question from March 16-24, 2016; other U.S. includes Bakken, Kansas, Gulf of Mexico and others. SOURCE: Federal Reserve Bank of Dallas.

0

10

20

30

40

50

60

70Eagle Ford

Permian Basin

Oklahoma LouisianaOther Texas

Other U.S. Onshore Gulf Coast

$29 $29 $29$34 $37 $38

$43

Dollars per barrel

9 29 8 4 16 21 5Number of responses

Most existing wells won’t be shut in at current prices


NOTES: Line depicts the mean and bars depict the range of responses; 63 E&P firms answered this question from March 16-24, 2016; other U.S. includes Bakken, Kansas, Gulf of Mexico and others. SOURCE: Federal Reserve Bank of Dallas.

Louisiana Permian Basin

Eagle Ford Other U.S. Other Texas Oklahoma Onshore Gulf Coast

0102030405060708090

100

Louisiana

Permian BasinEagle Ford Other U.S. Other Texas Oklahoma

Onshore Gulf Coast

$50 $51 $53 $55 $55 $56$62

Dollars per barrel

3 28 8 18 11 8 5

Number of responses

…but prices still below breakeven for new wells


Texas exports move up

2000 2002 2004 2006 2008 2010 2012 2014 2016 80

100 120 140 160 180 200 220 240 260

U.S. minus Texas

Texas

Index, Jan.’00=100, real $, SA

SOURCES: U.S. Census Bureau; WISERTrade. Federal Reserve Bank of Dallas

Summary• Texas employment growth was modest in 2016.

• 1.6% growth through November• 174,241 jobs

• Goods sector losses have tapered off • Services sector healthy• Oil and gas activity edging up• Exports strengthened• The worst may be behind us, but risks remain.


Please go to www.dallasfed.org for data and regional information.


http://www.dallasfed.org/

Data from the CRSP Survivor-Bias-Free US Mutual Fund Database, provided by the Center for Research in Security Prices, University of Chicago. Sample includes funds available at the beginning of the 15-year period ending December 31, 2015. Industry funds exclude index funds, sector funds, and funds with a narrow investment focus, such as real estate and gold, money market funds, municipal bond funds, asset backed security funds, and non-US bond funds. Success rates are determined by the percentage of funds that survived and outperformed a benchmark over the 15-year period, net of fees and expenses. Industry funds are compared to the diversified benchmark index with which they were most highly correlated over the sample period. For further methodology details, see the Mutual Fund Landscape brochure.

17%Equity Mutual Funds that

outperformed a relevant benchmark2000-2015

https://hub.dimensional.com/exLink.asp?6678936OV39A48I28211196

Startup Ecosystems are Working and Evolving

Bob Metcalfe, UTAustin Professor of Innovation

Austin Business ForecastConfidence in Uncertain Times

January 11, 2017

I invented Ethernet,but only for some values of

{I, invented, Ethernet}.---

May 22, 1973 at Xerox ParcInvention (MIT, Harvard, Parc, Stanford)

Standardization (IEEE)Commercialization (3Com)

Ethernet is Internet plumbing, and we plumbers work bestbehind the scenes, but sometimes they let us out, like today, and like the time Steve Jobs sent a limo to bring me to Pixar’s red-carpet debut ofTOY STORY…

InnovationVehicles

Doriot Ecology

• Funding Agencies

• Research Professors

• Graduating Students

• Scaling Entrepreneurs

• Venture Capitalists

• Strategic Partners

• Early Adopters

Berkshire Hathaway 1839Johnson and Johnson 1886

Exxon Mobil 1870General Electric 1890

AT&T 1885---

Intel 1968Microsoft 1975

Apple 1976Oracle 1977

3Com 1979 (HP 2010)Cisco 1984

---Amazon 1994Akamai 1998

Alphabet/Google 1998Facebook 2004

Uber 2009

Some Startups Old and New

FundraisingInvestmentGrowthExitReturnsReinvestment

NVCA Cycle

InoversitiesStartups: Entrepreneurial, Technological Innovation at Scale

Research Universities –> Innovation UniversitiesProfessors Now: Education, Research, Service, OutsideProfessor startups are viewed too much as conflicts of interest.

Inoversity Professors: Education, Research, InnovationInvention is a flower; innovation is a weed.Startups operate the machinery of Free EnterpriseEG: Innovation Grants out of The Cockrell School of Engineering

Change is Seldom ImprovementIdeas are a dime a dozen.Most ideas are bad.Valleys of Death

Good funded startups %?Good unfunded startups %?Bad funded startups %?Bad unfunded startups %?

Inoversity Professors: The Langer Model

PlatformPatentsPapers

ProductsPeople

Partners

Startups Innovation OpportunitiesArtificial IntelligenceRobotics / Drones / Diverless CarsSpacePrecision, Personalized, Preventative MedicineCybersecurityAugmented/Virtual RealityMarijuanaGigabit (Mobile, Video) InternetThe Internet of ThingsGene editing: CRISPR…

3Com Sales Tool Circa 1982

In FORBES 1995 this became Metcalfe’s Law (V~N^2).

V~N^2The single most important new fact

about the human condition is that,

thanks to telegraph, telephone, radio, TV, Internet, and now the mobile video gigabit Internet of things,

we are CONNECTED,

and ever more so every day.