In a sitdown interview on stage with Evan Smith, CEO and editor of The Texas Tribune, Obama tackled a wide range of issues relating to technology and the economy.
He also mocked critics who claim that his administration has accomplished nothing in the area of the economy and reforming Wall Street.
"When we passed the recovery act, the stimulus, that was very controversial at the time," Obama recalled. "And that continues to be criticized by the other party, despite the fact that unemployment's now below 5 percent and we avoided a great depression. Thanks, Obama."
The line evoked heavy laughter and applause from the crowd of tech enthusiasts.
South By Southwest, launched in 1987, is a 10-day set of three festivals focusing on film, music and interactive issues.
First lady Michelle Obama also spoke at the conference. This is the first time in the event's 30-year history that a sitting president and first lady have taken part.
The president also addressed the encryption versus national security debate that centers around Apple's legal fight against the FBI. He had praise for both principles at stake - privacy and national security - saying you cannot taking an "absolutist view" on the matter.
He restated his commitment to strong encryption, but also asked how government will catch child pornographers or disrupt terrorist plots if smartphones and other electronic devices are made so that law enforcement can't access the data stored on them.
"My conclusion, so far, is you cannot take an absolutist view on this," Obama said.
He said government shouldn't be able to "just willy nilly" get into smartphones that are full of very personal data. But at the same time, while asserting he's "way on the civil liberties side," he said "there has to be some concession" to be able to get to the information in certain cases.
Apple and the federal government are embroiled in a legal fight over Apple's refusal to help the FBI access an iPhone used in last year's terrorist attack in San Bernardino. The FBI wants Apple to create a program specifically for that particular phone to help it get to the data, but Apple has refused, saying to do so would set a terrible precedent.
The Associated Press contributed to this report.