Oct. 4, 2022

Road Trip to San Antonio - The Innovation Ecosystem with Jim Perschbach, President & CEO Port San Antonio

Road Trip to San Antonio - The Innovation Ecosystem with Jim Perschbach, President & CEO Port San Antonio

A lot of conversations today talk about the competition & cooperation between San Antonio and Austin. Two growing cities separated by a strip of Interstate 35. Cities with very different histories, different experiences…but both growing innovation sys

A lot of conversations today talk about the competition & cooperation between San Antonio and Austin. Two growing cities separated by a strip of Interstate 35. Cities with very different histories, different experiences…but both growing innovation systems. For our San Antonio visit, we start with Port San Antonio, It’s the Alamo City’s large and dynamic technology and innovation campus. A 1,900-acre platform just southwest of downtown San Antonio and a place that provides connected solutions in an increasingly connected world.

What's next San Antonio?

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Our music is “Tech Talk” by Kevin MacLeod. Licensed under Creative Commons 4.0 License 


Michael Scharf  00:00

Austin is the new innovation powerhouse not the next Silicon Valley, but the first Austin. We are adapting to the future in real time.


Jason Scharf  00:08

I'm Jason Scharf, a biotech executive and early stage investor.


Michael Scharf  00:11

And I'm Michael Scharf, advisor and board member for multiple private companies.


Jason Scharf  00:15

You can call us optimists, abundance minded, up wing and even solutionist. We see a bright future ahead that can be achieved through innovation and entrepreneurship.


Michael Scharf  00:24

In this podcast, we explore Austin superpowers, the people and companies driving our growth and the macro and micro trends that come together to create Austin today.


Jason Scharf  00:33

This is Austin next.


Michael Scharf  00:41

A lot of conversations today talk about the competition and cooperation between San Antonio and Austin to growing cities separated by a strip of i 35. Cities with very different histories, different experiences, but both growing innovation systems for San Antonio visit we start with port San Antonio. It's the Alamo cities large and dynamic Technology and Innovation Campus 1900 acres just southwest of Downtown San Antonio, and a place that provides connected solutions. In an increasingly connected world. Jim per Spock leads a team that is transforming the port's vast campus into a community of leading innovators and a fast growing economic engine at the port. People from across the region are connecting with career, education and entrepreneurial opportunities in world changing technologies. Previously, Jim was an attorney in private practice with one of the nation's largest law firms specializing in sectors that included aerospace and advanced manufacturing. Jim, welcome to Austin next.


Jim Perschbach  01:50

Thanks for having me.


Michael Scharf  01:51

And thanks for hosting us here at Tech port. Tell us a little bit about tech port.


Jim Perschbach  01:56

We'll take port is the old Kelley Air Force Base and old air logistics center. It's something I'm real proud of I knew about Kelly Air Force base before I could find San Antonio on a map put together back in 1917 folks in the community with horse drawn wagons built this place got a picture actually over in the tech port center of them doing you got horse drawn wagons a steam truck bunch of a in for Jenny's in the background. And over the years, it became a very important part of our national history. It was not just an airbase on air Logistics Center, we had the predecessor of Air Force cyber move here back in the 1940s 1950s. And so you had all these really unique convergence of talents and technologies. Base was BRACed and a brilliant decision was made, I take no credit for it, but to privatize some of that work in place. So today, what you have is a facility that's not a real estate play. What we are looking to do here is to attract the type of talent technologies, people, businesses, that support the industries that we have on this campus launched that strategy about four years ago. And it's been tremendously successful. An ecosystem like y'all talk about,


Michael Scharf  03:13

well describe, if you will, the San Antonio ecosystem. And the part that that tech port really plays within that.


Jim Perschbach  03:20

There are a lot of really deep capabilities in San Antonio, the one that is near and dear to my heart is aviation. So here at what is now port San Antonio, it used to be Kelley Air Force Base. The specialty has long been two fronts. It has been the sustainment, the modification, the upgrade and the specialization of aircraft. And we do that as well as anybody on the planet. And then with the Air Force electronics, non kinetic cyber communications ISR capabilities, you've got a lot of signals intelligence, you've got a lot of sensors, technology, all of that sitting in one silo. Within I'd say spitting distance, but right up the street, you have Southwest Research Institute, which is doing truly truly amazing work, not just an aviation, but truly and aerospace things like the New Horizons programs. Interstellar boundary explorer, right up the street, in Fort Sam Houston, not too far away from here. You've got the Center for military medicine and an awful lot of research, not just the hands on military medicine, but the research about that. You've got the San Antonio Medical Center, you've got philosophy, Texas, and the Texas Research and Technology Foundation, all really focused on biomed. And there have been some amazing technologies, the heart stent that have come out of San Antonio, kinetic concepts came out of San Antonio, really some great capabilities. And what we are seeing now as we start to move in a world where there really isn't a single industry anymore, is that becomes an issue. acing strength, what you have is the ability to I'm going to use a pawn here port, a lot of those technologies from industry to industry. And that's where we come in the lever that we control is not just real estate, it is real estate, it is financing, it is marketing, what we are really doing is like in youth sports, putting together a club team putting together that connectivity. And bringing people where they can come down, put these talents put these technologies on a single platform and a single showplace, and the buyers don't need to go anywhere, they just come in, they can scout right there. And what that does is that starts attracting a lot of people who are interested in selling. And I'm not just telling you this is building they come we've prototyped this for about four and a half years. And in those four and a half years, we have just seen exponential growth on this campus. And we've seen exponential growth within the technology industry, not just here in our part of San Antonio, but throughout the city, and now starting to leak out, frankly, nationally and internationally


Jason Scharf  06:08

Break down for me for a moment the difference between like the building that we're sitting in and the campus versus the area, obviously, as we were driving up here saw a bunch of companies, is this more of a district? Is this more of a hub? Like how are we actually making that distinction?


Jim Perschbach  06:24

What you were on Kelly Air Force Base, as it was finally configured before the BRAC was everything on this side of the runway that you're on about 1900 acres, and a good chunk of the other side of the runway. We got everything on this side of the runway. So that 1900 Acres is entirely us. All those office buildings you saw with all those big defense industrial names, we own those, all those hangars up and down the runway. We own those, the facilities that have the guys with these security forces uniforms on, we actually own those facilities as well. Those apartments just down the street we own at the school, we own up these buildings that you're sitting in, we own it. What we do is we operate like any other development company, we lease those facilities out. We are an interesting creature. Because this was a bract military installation, it get turned over to a local Redevelopment Authority. We became that local Redevelopment Authority in most places in the country. It exists for a very, very brief point in time, and they sell it off to developers and the developers develop it for a completely different purpose. With Kelly with board San Antonio, there was a really interesting situation a really unique situation. The nation couldn't really BRAC a lot of these assets. You had a facility that had real capabilities and facilities for large aircraft and large engines. And that's expensive and difficult to duplicate. So Senator Kay Bailey Hutchison, and Dave Davis in her office wrote into the legislation, the ability to privatize in place. There was a public private partnership that was developed for the engine work. And it was called the propulsion business area, a guy named Gary Ritchie was really the brains behind that he was an SCS in the air logistics center at the time. And what that did is it took the three big engine platforms that were being worked here in San Antonio, gave them all technically to Tinker Air Force Base. But two of them stayed here. And were handled by a company called Kelly Aviation Center, which was a joint venture, Lockheed Martin, standard arrow, and I think GE and Pratt and Whitney if I remember correctly, and chromoly. Then Boeing stepped in, and they took over the old big hangar building 375. The concept originally was that we're going to continue to do the C five sustainment here. That didn't happen. They started to do the KC 10s and the C 17s grew that to what is now Boeing's largest global technical operations on the planet. And then for years, what became port San Antonio kind of struggled to find its way that there were different plans. There were plans to do it like any other Redevelopment Authority and build a business park. When inland ports were all the rage, what is it about 14 years ago now they changed the name to port San Antonio, if you look at the logo, you can see a truck and train on an airplane with the idea that this was going to be a logistics hub. And it was about four four and a half years ago that we looked at. We said we're missing a real opportunity. What we're trying to do is to compete with what a lot of other people have the assets, the resources and the facilities to do and they can probably do it better than we can. But there's some things that nobody can do as well as we can. In San Antonio. Do we have tremendous capabilities on the Electronic and Information side? We also have tremendous capabilities on the aviation manufacturing and energy side. And both of these need to get together. It's like those old Reese's Peanut Butter commercials, right? You get the chocolate in the peanut butter together. And I'll tell you how this story came about. I was I go to an awful lot of aviation conferences. I like go in there because I'm George Clooney at an aviation conference. You know, everybody's staring at their shoes. Everybody's back. I'm cool. But I noticed, we were talking less and less and less about aeronautics. We were talking less and less and less about engines and piloting and everything else. We were talking an awful lot about cybersecurity and digital capabilities. And really, nobody in the room knew what they were talking about. That I meet some of the cool kids and they're creating things like tech block, they're hanging out the VC people, they're wearing ironic T shirts and slapping stickers all over their laptops. It I do not feel like George Clooney amongst those people. And they've got all these answers. And I said, guys, it'd really be cool. If you came and you came to one of these aviation conferences. They know what they said to me. Know, we go we hang out at tech conferences. We don't go hang out with you guys, grandpa. And then a good friend of mine, he He's former Air Force started at cyber company tremendously successful. Every time he goes to the RSA conference, he brags about a t shirt he has it says no buying authority, because everybody is trying to sell to everybody, right? There's nobody there buying they're all trying to sell. That's where a lot of this started to take hold.


Michael Scharf  11:57

Wait, let's back up at RSA. We're talking about the big encryption company, the big conference they have every year. So just kind of setting the table there. I've been there a couple of times. You're right. Nobody's buying everybody's selling. All kinds of different stuff. But okay.


Jim Perschbach  12:13

So, we knew we need to do a couple things here on this campus we had about four years ago. Massive space, a lot of these buildings a million years old, some just completely knocked out. If you go down to that tech port center right now, that was a massive parking lot. It was a massive, almost destroyed parking lot, because I think they laid it down in the late 60s. And so we said, the first thing we want to do is we want to bring a lot of kids through this campus. And that's just not just out of the goodness of our heart. That's to bring the talent in. So we stood up a tiny little museum in the old chapel. You ever been to Epcot back in the 80s in the 90s. You know how you'd go through every attraction, but they're also selling you a car. There's so many telephone everything sponsored by somebody. Here's the beautiful thing about federal acquisition. There are a lot of hoops to jump through if you're trying to sell to the government. If you are showcasing a bonafide exhibit in a bonafide educational and cultural institution, and a general officer or SES or GS 15 walks by, that's all cool. But they also get to see the technologies that are available they can buy out of it. But now they're educated this in the marketplace. So we put this together in an old chapel in the old commissary here on the campus, had about 80,000 Kids come through in the past couple of years, we had a couple of startups that we met just through coming down to hang out with this tech stuff, one of which is plus one robotics. They're not doing robotic stuff. What they are doing is they're taking artificial intelligence, sensors, technology, supervised autonomy, computer vision, computer sensing, and putting that as a suite onto robots that allows the robot to operate out of a controlled environment and operate in an uncontrolled environment. Another guy gave Garza dropped a lidar array on the back of a 40 pound robot, because somebody he knew, in real estate said measuring buildings is difficult to do. You spend a lot of money sending in an army of people with tape measures and laser measures, and they have to upload everything to CAD. So this takes care of that. And we're putting them on this platform. We actually took these guys with us to those big aviation conferences, Gabe winds up being named one of eight startups in the world, changing aerospace and aviation by Aviation Week, not some fly by night publication. And the reason is that there are applications for this technology different from what they were thinking about. The plus one technique Knology these folks were looking at it for logistics application, the Tetris problem, and Amazon and FedEx and everybody else. But it could be used for orbital manufacturing, lunar manufacturing a whole bunch of other capabilities. It's just about bringing these things together. And then the one that I am most proud of, I'm proud of all of them. But this one's near and dear to my heart, it's an old airplane guy is desire wreck robot, it is 72 feet tall. It has a 20 kilowatt laser attached to its arm. And I tell people, you know, we could go and shave the buildings downtown with that thing. But what it does is it takes the coating off of an airplane. And the traditional way that we've been doing this for decades, is we send about 30 people in with a bunch of hoses and really, really nasty chemicals. And they spray it all down. And it just creates a giant mess. It's dangerous, it's toxic, nobody gets a whole lot of money, it's a disaster. This robot takes 60% Less time, saves about 500 gallons of some of the nastiest chemicals you've ever seen about 4000 gallons of wastewater, and 30 tonnes of carbon dioxide per airplane reduces all the way to about two and a half pounds of trash, you can drop in your household garbage, completely non toxic. And you look at that. And what you can do is not only save the operational costs, but because you don't need to put it into that environmental protection. You save all of the capital cost of building these very, very specialized, very, very expensive, specialized hangars to do that. And when you look at a military system, where we've been funding just a couple fractions of our expected sustainment costs, so a whole bunch of the fleet is grounded. When you look at a commercial fleet that has had tremendous cost pressures as we commoditize that industry, that becomes a game changer. That becomes readiness, that becomes reliability. That becomes dispatch efficiency.


Michael Scharf  17:07

Oh, I'm just thinking of all the spirit airplanes that have to have that yellow paint taken off now and repainted. But


Jim Perschbach  17:14

and here's the beautiful part. The guy who came up with that idea is a computer software salesman. I have no idea how he came up with the idea. But he did.


Jason Scharf  17:26

Everybody's got a side hustle.


Jim Perschbach  17:27

He's got a side hustle. But that's the magic of what we're doing. So we spent $70 million, building that tech port center. And it's a machine and it's an experiment. We're by design, never going to make a profit off of it. Because all the profits go into our foundation to fund educational programs for kids. So step one, for years, people would complain, there's nowhere to eat on this campus. There's no entertainment. It's an old airbase, it's kind of boring. Now we've got a food hall, we've got a bar, we've got a gaming center, we've got concerts and gaming competitions, we create an entertainment district. We've got the museum. So you can come in, we can bring in just armies of kids, we want to do about 150,000 kids a year who can get hands on with this technology, who can be inspired. We've got a simulated security operation center in there. We've got robots that are being developed by companies like Astro port and xr to do lunar mining and lunar exploration. And they've got a foundation called the WEX foundation that Sam and his friends put together. Same scientists, same technology, working with kids from eighth to 12th grade. Then you've got the Capital Factory sitting in what we call the tech transfer space. So there's conferences being done. There's discussions with innovators, Stephanie Garcia on our team, just wonderful young woman. Really turbo charge they sa t x robotics meetup. I went to one just a couple of weeks ago, right before they all took off to Chicago with the biggest robotics show on the planet. They were invited by the guys from Silicon Valley. She had about 150 people there in that room. You had PhDs you had roboticists, you had people from industry. You had folks with more piercings and more tats. You had people with pet robots, you had artists. But most important, you had about 20 Kids, many of which are from the neighborhoods right around us all sitting up front with Lego robots talking to these people. One of the guys who gave a presentation plays bass in a metal band. It was just a wonderful gathering of people. And these are where the startups are coming from.


Michael Scharf  19:45

And that's also the sustainment part of it. Because when you start when they're in middle school and high school, and you get them through that part of their education, obviously then they go off to the schools that have those programs and we I hope they come back home. Whether it's San Antonio or Austin doesn't matter, we hope they come back home when they come back to our companies. Absolutely. So we talked about cyber, we talked about aerospace, we talked about robotics, are those the three big industries here in tech court,


Jim Perschbach  20:13

They're the three big industries that we have directly. Okay. And then you asked about connectivity. So an area of connectivity that's growing, that has me excited for a bunch of reasons is with application of those technologies into healthcare, and vice versa. So the the first thing that I want to talk about is this outfit called Knight aerospace, they've been around for years, small little company. What they've developed now is a module looks like a shipping container. And it can go in the back or pretty much any beatdown old cargo airplane you want. And it is a flying hospital pod. It is a flying surgical environment. And this is a game changer. We have had specialized hospital aircraft for decades. They are very, very specialized, very, very expensive, very difficult to operate. If you can drop this into the back of C 130, C 17, C five, what have you, not only can you take wounded warriors and transport them without the problems that come with putting a sick or wounded person in the back of an airplane, you've got the ability to fly the hospital to where these people are. So it becomes a game changer right off the bat.


Michael Scharf  21:32

Yeah, that's kind of interesting. I represented a company way back when and they had approached the military specifically the Marines had approached Northrop and they said to Northrop, you know, remember that show mash with all the helicopters flying in? Well, the problem is, when an N one a one Abrams tank is doing 60 miles an hour, that's too slow. We need something smaller that doesn't, Northrop obviously raises their hand and says, you know, we're really good at miniaturization. And the spin out ended up doing a stretcher, that I think they're still on the back of Air Force One and Air Force Two. But it's interesting, because the skill sets that you talk about cyber, basically computer systems, you talk about aircraft, and avionics, which are talking about sensors, and you're talking about very, very highly complex engineering marvels. And you talk about how that's moved to healthcare. But I want I want to take a step back, I want to look at some of the companies I want to look at, you've mentioned three or four that are doing really well, who are the ones that are behind them that are coming next?


Jim Perschbach  22:49

There are a host of gonna come in next. So there's Knight aerospace, some of these robotics companies, your plus ones, and others, there's some that I can't quite mention yet. And then of course, there's the good old fashioned Boeing's and Northrop's and Lockheed CNF technologies and CAC eyes. It's bringing those folks together. And the biggest challenge that I think the big OEMs have, is you become really, really good at what you do. And you start putting these processes and these procedures together. And effectively, what you're doing is you're looking at the problem the same way over and over and over again. It's not that you can't do brilliant things, Northrop, Boeing, Lockheed are always going to do brilliant things, brilliant people make brilliant things happen. Sometimes you need somebody who looks at the problem from a different perspective. And when they look at that problem, from a different perspective, you can solve something that people didn't realize, was the challenge. So not healthcare. But when you look at things like space based power generation, and people look at me like I'm nuts, when I talk about putting satellites into orbit and wirelessly, beaming the power back down to earth, the technology is there. We all know how to do it. The challenge is, how do you do that in a way that isn't forgive the pun astronomically expensive. And when you look at things like the space station, we're sending shuttles up with astronauts who are going out and doing spacewalks. It's a miracle of technology, and it is human achievement. But it's shockingly expensive. And you can't really do it at scale. Right? If you can take some of the technologies that plus one is working on. And you can do that to port in that scalability in that cost. So now you got the ability for robots to do it in uncontrolled environments without getting a fraction of an inch out of shape and having the the human to go out there. That LIDAR system that 40 pound robot doesn't need life support to get to the moon doesn't care if it ever comes back, but it'll find you the lunar cave. that has the right floor, the right diameter and the right ceiling to start building that habitation. What this is doing is this is reducing the cost. The night aerospace medical pod, perhaps not groundbreaking in terms of putting a medical pod in there. But the concept of instead of trying to modify an airplane supplemental type certificates and everything else, we're just putting a shipping container back there, in retrospect, easy. But it really takes somebody who's looking at it from a different perspective. There's a another issue last year, went through a bunch of colon cancer treatment, I'm fine now, go get a colonoscopy. Don't put it off. But I got up close and personal with a surgical robot ever seen these things. They're fascinating. And so you've got a surgeon who's about eight feet away from you. Looking at an augmented reality screen controlling joysticks and doing things that a human being past couldn't possibly do, because of the way we're jointed because of policies because we get tired whole bunch of other stuff, right? But it's only eight feet away. Now, if you can work on things like the latency lag on the communications, cybersecurity, and you can start to increase that distance. You've got the ability to really change the world, we've had a hurricane about to hit Florida. So it's not all about warfare. There is a system Genesis System, we're going to be bringing that here to this campus, David Stockman Berg, Steve quash and stalking Berg put that together. It's an atmospheric water generation system. But it uses a liquid chemical catalyst instead of an evaporative system. So the water that comes out doesn't need to be filtered, you've essentially merge the hydrogen and the oxygen atoms is distilled water. Right now, it still requires a lot of power. But these are the things on the military side, we are sustaining a tremendous number of casualties, just shipping food and water and supplies to the frontlines. These systems would save lives right away in disaster areas, ultimately getting to the point of solving water security. But it takes these different perspectives. And it takes people willing to invest in them on a small scale. Because we have a tendency as humans to try and solve problems big all at once. And you can't solve it all at once.


Michael Scharf  27:30

Let me hit you with a proposition because we've talked a lot about the Austin ecosystem. And, and we talk a lot about Austin superpowers. Given what you've just described, if I were to talk about San Antonio superpowers, the first thing I would have to say, is collaboration. You guys have brought together some very different kinds of people and very different ideas. And those creative collisions that we always talk about when we talk about getting human beings together. You've created a space for that. And this is pretty amazing. I don't I don't want to make light of it by saying yeah, this is the superpower kind of thing. But every benefit comes with a struggle. So what do you see are the struggles here in San Antonio today? What are the hard parts that you guys are faced with?


Jim Perschbach  28:27

The first hard part we're faced with? But it's every community in this country in this planet face it is a easy tendency toward defeatism and negativity. And every community you go to, if you go behind the surface of the marketing, even Austin, there is this underlying imposter system. syndrome of we're not good enough. We really can't do this. And that permeates everything. I can't tell you how frustrating it is. When there's this constant drumbeat of that's too big. That's too ambitious. So we just launched you can see a rendering of it behind you. We're going to build a 200 foot tall building here on this campus be somewhere between 12 and 15. stories. It's no big deal, right? It's shockingly not a big deal. I was flying out to go speak at a conference in Spain a month or two ago. And friend of mine grabs me at the airport. We had just started talking about this project and he said, Jim, that's a that's a big ambitious, expensive undertaking, especially for that part of town. I know a lot of people a little nervous about that. I said, yeah, we'll be fine, right? We've done similar stuff before and I hopped on the plane, but it kinda, you know, it's running through my mind and I land in Chicago to catch my connecting flight. And you look out the window in Chicago, and you're out there by Sean Hamburg in everything else, there are miles at 12 storey buildings like somebody's growing corn, right? It's not that we are small time in San Antonio, it's that you run into this, we're not good enough. And there are a lot of people in San Antonio, that seem to think that the center of all smartness and hipness and everything else is up in Austin. I know a lot of folks in Austin, my family doesn't live too far from Austin. I knew Austin when all your head was three UHF channels up there. And it wasn't that long ago. And I know that if you're being honest with the folks in Austin, underneath the hipness, and the coolness and everything else is this belief that we're not quite as good as San Jose or Boston or somewhere else. Here's the magic that I say that we're managing to capture here. Sometimes, you got to be tough when you're coaching, sometimes you need to tell people, they're just not doing good enough. Sometimes you need to grab somebody and kind of give them a hug. And some of this one of the reasons I'm so proud of Stephanie Garcia, and our group is she is reaching out to some of the most brilliant people. Some of them know, they're brilliant, because they have PhDs. Some of them don't know they're brilliant. And what she's really doing is she's inspiring them to believe in themselves. There's a woman that I am just an absolute fan of her name is Shante Hall, she's a PhD. She is a former Air Force, former tech sergeant. And she has taken it upon herself to go out to a whole host of bases where you've got transitioning service members. And these transitioning service members primarily enlisted. They're scared, right? You came out of your parents house, 17-18 years old, you enlisted, you essentially had the military as your next set of parents. And what she does is she not only inspires them to believe they can do something, she teaches them how to operate in the civilian world. And she can match them up so they can go out and interview I went to one of her conferences, and she had a LinkedIn photographer there. And before everybody left, they had a LinkedIn headshot, and they had a resume put together. That wasn't a whole bunch of military jargon. If you spend the time to actually show people, they can do something, and you spend the time to get to know people, you're not only doing something that is good, just from a human standpoint, from a the end of the day, I'm running a real estate development company, right, I got to fill up a bunch of land, I got a board that's looking at me and asking for my ROI every day of the week, you fill that out, because you fill it up with people who are willing to spend the money to be there. And so this is the magic of San Antonio, there was a metal band that play we did a rock and roll concert there. And it was old, old bands, the crowd was all people in their 50s 60s and 70s. And we had bands that were hot in the 70s. But one of the opening act is a band called Jesse kill a bunch of local kids, none of them over 28. And they play that same style of music just because their grandparents really liked it. And that's what they do. Their bassist is really, I think one of the leading lights on applications of NF T's to a whole bunch of commerce. But I never would have known that, were it not for the connection through the music industry. So having the time to get in there. When I look at some of these other big ecosystems out there. And there are great ones all throughout this country. There is a lot of focus on the so called best and the brightest and bringing people in who are hipper and smarter and more credential than everything else. And there's a value for that. But if you gate keep right at the front door, if you pre judge people before they've even had a chance to start, you can't do it. And so that let me segue to this. There is a little bit of an art to this campus design. I have spent decades of my life studying how Disney did their parks, and how things are put together. And what we have here we call shades of blue because Shades of Grey is a movie and Paco tells me I can never use that phrase on a on a podcast. But along 36th Street down by where that tech port center is what you are going to see is a development of a whole bunch of facilities that are wide open to the general public, no secrets, nothing classified. Come in with a tinfoil hat on and talk about the craziest thing you want to talk about. We're open for business. If you see something that is a talent to technology, a person an idea, you can bring it through a permeable barrier as a camp As becomes more restricted, and more classified in that direction, and vice versa, it gives you an opportunity, if you're struggling with a challenge, to have that conversation with folks who might look at it from a different perspective, and without having to open up everything and show all the secrets, you can just start to have some conversations about the challenge. And I think that's tremendously powerful. I'm not going to tell you, we're the only ones doing it. But I think we're the only ones doing it, where we're physically designing a campus that is designed to encourage that level of activity.


Jason Scharf  35:34

I want to bring it up and even greater macro level. So we're talking a lot about the connections that you're building here within the innovation ecosystem, both at the port and within San Antonio. Obviously, we're starting to talk about a larger region here with Austin, San Antonio mega region kind of said in the same sense of DFW, what are your thoughts on the prospects of that kind of mega region?


Jim Perschbach  36:01

If we can leverage where the strengths are in that mega region? I think we're going to do tremendously well. I am actually I'm going to say something that may be shocking to some, I'm less interested in partnering with Austin, than I am with Houston or Dallas. And the reason for that is Austin does a lot of things tremendously, tremendously well. But where I see their talents and their capabilities are not necessarily on critical infrastructure, not necessarily on the types of activities that we do. So one of the things near and dear to my heart, is critical infrastructure, resiliency, security, and reliability, the center of our critical infrastructure universe, really is in Houston. That's where the finance is that where is where the control is. There are a lot of issues that that industry is going to struggle with, some of which are just how they're currently monetized and how they're currently operating. You can develop a lot of cybersecurity systems and a lot of protection systems. But if you do it without understanding the underlying industry, it's just not going to work. Are you familiar with the cyber manufacturing innovation institute, I'm required to say I'm on the board of advisors to the Chief Science Officer of that institute. So that's my disclaimer, it's a Department of Energy Institute. The two lead institutions are the UT System and Carnegie Mellon with UTSA is the managing institution is about 80 members. And it has three mandates, the first mandate is to develop cyber secure architecture for manufacturing, that works, but also doesn't come with productivity declines or costs that become prohibitive. The second one is to train a million people in the use of that. And the third is to generate a material reduction in the power requirement for the cybersecurity. There is a virtual laboratory at Oak Ridge National Laboratories where they are modeling a lot of this. But the physical manifestation of that is right here on this campus. And it's on this campus, not only because we have the buildings in which you can build those manufacturing environments, but you can bring in the people who struggle with these problems every day, and make sure that that actually works. And so when I look at this, one of my biggest concerns is I see a lot of technologies being developed by really, really brilliant people who've never thought about the actual application. So classic story there, there was a major airline decided to put a lot of the pilots information, a lot of the binders lot of the flight bag, onto a laptop. And they had a system that allowed the laptop to be actually physically restrained inside the flight deck, which I had two problems one every time on a laptop and iPad every time I Apple goes and changes that you got to change the physical connection. And the second time is every time they update the iOS crashes the app. Well, you don't want to just turn off the cybersecurity you don't want to just turn off the auto updates, it becomes a giant mess because you've got people who don't understand the two pieces. This is a challenge that I think not only Austin but some of the industries that are working with Austin are starting to recognize you're getting brilliant, brilliant concepts. But how you port that how you connect that into the other environment is a challenge. The RELLIS campus at Texas A&M is something that I think is absolutely worldclass when the best ones you familiar with that


Jason Scharf  40:02

Texas A&M, not that particular institute.


Jim Perschbach  40:04

The RELLIS campus as you go in on, I just call it 21. I don't know if it's a highway or Farm to Market Road, whatever it is, it's the way you come rolling in town, you will see this massive facility right there, little west of college station. And it is absolutely fantastic. It's a laboratory environment. The challenge with at the gym CS is everything you have to do there is to simulate an urban environment. So take electric vertical takeoff and electric, short takeoff and landing aircraft. Again, full disclosure, I sit on the state's urban Air Mobility board, I'm not speaking for the state here. testing those aircraft, doing the business case analysis in what is essentially farmland doesn't give you the operational experience with the signals interference, the urban environments and everything else, that a campus like ours does. So the reason we're building that verta port down here is not just that we think it's cool. And it's an additional area to move our FBO operation. But we have on our 1900 acres, industrial facilities, office facilities, residential facilities that we all own. We've got FAA, aeronautical land and non FAA aeronautical land, and it allows you to do the business case proof of that direct robot. The original development was done up at the sweary campus Southwest Research Institute. But when you get from being able to prove that the laser in the robot works into having to prove that it works on an actual airplane, you need people who understand major repairs of a part 145 repair station, you need a runway and a massive hangar and all that other infrastructure. And that's where we come into play. And the thing that I am hoping is starting to happen more and more not just with our ecosystems, but ecosystems around the country, is instead of the old model. Now the centers of excellence where you do one thing tremendously, tremendously well, but you don't really understand any other piece of it. You've got something where you can bring these pieces together. For that to work really well. You've got to have the areas where there is a center of excellence, but connectivity between the centers of excellence.


Michael Scharf  42:29

Jim Perschbach, Port San Antonio, we always ask the same question when we close it, but I'm going to change it a little bit this time. Jim, what's next San Antonio?


Jim Perschbach  42:40

Well, we're gonna be building in addition to that office building, the Space Research Building and the verta port, we're going to be building more and more connectivity, not just within San Antonio, but outside of San Antonio, the got the time go over and look at that picture, then building Kelly Air Force Base, if you're really, really bored, I will drive you around this campus. And I will show you that nobody in their right mind would build an airbase like this. But there's a reason for that. When this base was built, 1917 people knew that airplanes were the future. They didn't know what they were going to look like. The big, big building that Boeing now operates, was originally designed because this B 36 was coming out. And there was no building that would handle the B 36. Between the time the ground was broken, the new runway was laid down that building hope and the B 36. Came into service went out of service and the B 52. was in service. And this is just a number of years. If I had been born in 1910 1920, in San Antonio, I would have been born in a house with an outhouse probably would have had a horse, no car, certainly no telephone, probably no electricity. By time on my age, people are flying jets across the Atlantic. Things change. And we are on the cusp of a lot of things changing. And my hope is that 100 years from now, nobody's going to remember who I am or any of this stuff. But there is some picture of some of this stuff that we're building. And somebody is doing their version of a podcast and says nobody would have built a Technology campus like this. But those guys were figuring it out as we went along. And it's not just the port. Frankly, it's the country and society. And we all think this is the first time you've had these technological changes. I know I'm running long winded you ever play Red Dead Redemption 2. I think it's my favorite video game of all time. And it's not just because I get to sit on the side of a pretend River and fish. When you watch that game and you realize it's taking place in 1899 to 1907. And while these folks are running around with stage coaches and steam engines and everything else In New York City that we're building skyscrapers. We keep thinking that what we're going through, nobody's ever gone before. We just have the privilege of living in a time where we're about to go to even greater things, the march of history. It's always messy as you go through it. But it always winds up with a better society. And that's what we're moving into. So when you say what's next? I don't know exactly what's next. Other than 100 years from now, people will still be complaining about how awful the world is. But they will be living in an even better world than we are now.


Michael Scharf  45:34

There you go. Thank you so much for joining us on the Austin Next podcast.


Jim Perschbach  45:37

Thanks for having me.


Jason Scharf  45:40

So what's next, Austin, we're glad you've joined us on this journey. Please subscribe in your favorite podcast catcher. Leave us a review and let your colleagues know about us. This will help us grow the podcast and continue bringing you unique interviews and insights. Thanks again for listening. We'll see you soon.