Explainer: Why innovation & entrepreneurship can propel Miami’s economic future
Miami has the opportunity to cement its role as a leader of new, emergent entrepreneurial cities that are building companies and creating the jobs of the future.
Why it matters:
Technology is disrupting the global economy at an increasing pace. It’s a huge opportunity for emerging cities, like Miami, because successful tech ecosystems are no longer confined to established hubs such as Silicon Valley. The cities and regions that embrace innovation, encourage entrepreneurs and attract talent will succeed.
- As technology disrupts jobs and transforms the economy, the cities that are more agile, entrepreneurial and can reinvent themselves are the places that will do best. Tech’s both eliminating and creating jobs. McKinsey projected that by 2030, up to 30% of jobs that existed in 2017 would be gone. But the same report also said that tech would create even more jobs — though not necessarily in the same places.
- Talent and capital are becoming more mobile, helping create new centers of innovation. Established hubs like Silicon Valley or San Francisco aren’t going away, but new places — like Miami — are emerging.
- Miami is on the map. The great COVID migration has resulted in people and companies scattering to new places, and Miami is being chosen at a record clip. City of Miami Mayor Francis Suarez has received global attention following his “How can I help?” tweet and his ongoing efforts touting Miami as a tech hub.
- Young, high-growth companies drive the vast majority of net new job growth. This is why driving entrepreneurship is so important.
- Small businesses, meanwhile, remain a critical piece of the local economy. Miami’s long been a national leader in small and mid-size enterprises. It’s important from economic, cultural and community perspectives, as Miami’s small businesses reflect our community culture, are breeding grounds for innovation, and bolster the local economy.
Where are we now?
Miami has never been better positioned for the future than today. Miami burst onto the scene as an emerging national tech hub in the past year, spurred by venture capitalists and entrepreneurs fleeing California taxes or New York pandemic confinement, and encouraged by City of Miami Mayor Francis Suarez’s welcome mat, including Cafecito talks with newly arriving entrepreneurs at Miami City Hall.
- The Miami moment is over a decade in the making. It started with a handful of entrepreneurs who recognized the potential of tech and of Miami’s connection to Latin American markets. Locally headquartered Knight Foundation boosted that vision by launching a program in 2012 focused on building Miami’s startup and tech community. To date, it’s made more than $50 million in ecosystem investments, including supporting the launch of Endeavor in Miami in 2013, the eMerge Americas conference in 2014 and dozens of other efforts across the city, including Center for Black Innovation, The Idea Center at Miami Dade College, The LAB Miami and Miami Angels.
- Venture investment has surged, as more investment went into Miami companies in the first three quarters of this year than in all of 2020. At the end of September, $2.4 billion was invested in Miami startups compared to $2.06 billion in all of 2020, according to CB Insights. In January, SoftBank Group committed $100 million to Miami startups, and announced in October it’s already invested more than $250 million.
- Talent is moving to Miami in droves. In May, Axios published a report that South Florida had the highest inflow change of software and IT workers, per an analysis of LInkedIn users profile changes. In July it was reported there was a 29 percent increase in tech job postings across South Florida.
- Companies have also been moving to Miami at an unprecedented clip. SoftBank expanded its presence; private equity firm Thoma Bravo and venture funds such as Founders Fund and Atomic relocated to Miami. Canada-based CI Financial announced it was launching its U.S. headquarters in Miami. Blackstone and Microsoft also both established presences in Miami, among many other firms.
- Greater Miami’s tech ecosystem is diverse, by national standards, but does not reflect the full diversity of the county. Access to capital is a big issue for entrepreneurs of color in Miami, as it is nationally. Increasingly, diversity is recognized as a competitive advantage as differing perspectives fuel innovation.
By the numbers
Research
- Details on venture funding through September can be found in the CB Insights State of Venture.
- For an overview of the growth and potential of Miami’s local tech ecosystem, check out eMerge Americas’ Insights Magazine
- In August, the Miami Herald explored data on the local ecosystem, which shows that Miami startups are on track to outpace venture capital (VC) funding raised in the previous two years. (Note: this story is behind a paywall).
- The latest PitchBook-NVCA Venture Monitor report explores how 2021 has been a record-breaking year for VCs throughout the country.
- For a look at the capital providers of venture-backed startups in the Southeast U.S. region, including Miami, check out the Southeast Capital Landscape database, hosted by Embarc Collective.
Related reading
Take a deep dive into the issue with these stories and soundbites:
- Investors and entrepreneurs have been relocating from traditional tech hubs to Miami — but why? Crunchbase explores.
- Miami ranked number 2 in Forbes’ new ranking of emerging tech hubs in the U.S., beating out every city except Tampa. Miami Inno’s Ashley Portero shares more insights from the report.
- Though startup funding in Miami increased during the pandemic, Axios says early stage investments are an indicator that the city’s still a young hub.
- Mayor Francis Suarez knows how to speak the language of the future, says Tablet Magazine, because it’s the language that Miamians have always spoken.
- On The Pomp Podcast, new Miamians and VCs Keith Rabois and Anthony Pompliano talk about the city, its diversity, and how its culture could contribute to its success.
What’s next?
At Opportunity Miami, we’re focused on exploring — with you — answers to questions defining Miami’s economic future. This is a work in progress. Each day we’ll add new elements through an iterative, build-it-together process to find clear, actionable solutions.
But it starts with asking the right questions. Below are some we’re thinking about. We plan to take a deep dive into a new question each month.
- How do we clear obstacles and open more pathways for Black entrepreneurs to succeed and lead?
- What policy changes can drive entrepreneurship and innovation?
- How can Miami innovate its way to global leadership in logistics and supply-chain management, medtech and life sciences, and financial technology?
- How can tech innovation boost small business?
We’d also love to hear what’s on your mind. Let us know by sending a note to next@opportunity.miami.
Interested in digging in deeper? See all of our threads at opportunity.miami.
