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AbstractThis paper uses the lens of institutional theory to explain the launch and evolution of Austin, Texas's technology‐based economy. The case underscores the importance of context, contingency, and the evolution of key local development organizations in explaining how regional economic development trajectories can change and evolve. The case history provides insights into how economic development networks form and operate to "set off" processes of industrial specialization and agglomeration and how they can promote successful adaptation to change in technology and industrial structure. The Austin story further suggests a "stage" process of regional technology‐based evolution where the development of industrial agglomerations linked to a substantial local research base is seen as a necessary precursor to increasing endogenous innovation and start‐up activity. Successfully navigating these stages is bolstered by the formation of institutions and networks that are durable, strategic, and adaptive, and which, at the right time, recognize and support entrepreneurial firm development to help sustain technology‐based growth.