Two new studies substantiating Miami’s tech hype also reveal how much we must do to make that growth path pivotal to our economy. The jury is out about whether we can meet that challenge.
Venture capitalists poured $5.6 billion into this area in 2021, according to “Miami’s Tech Entrepreneurship Ecosystem 2012 to 2022,” funded by the John S. and James L. Knight Foundation, which itself expended more than $60 million to expand the ecosystem in that period.
But was that $5.6 billion in a pandemic year an anomaly? The total was about $3 billion in 2018, at that time the most ever, but declined in 2019 and even more in 2020.
If new high roller arrivals drove the investment spurt, will their focus linger here with the pandemic gone? Many of them came to enjoy our low taxes and outdoor life. Those lures may not be enough to keep building a venture capital support system for tech.
To put that venture capital funding in perspective, $5.6 billion is less than twice what the county spent to build the Marlins baseball stadium. It’s wonderful, but still has limited impact.
Further perspective: from 2010 to 2012 Miami ranked 16th in the nation in venture capital funding, the report says. In 2013-2015 it rose to 14th, and since has been 13th. Any gain is most welcome, but is it spectacular?
The other report, issued Tuesday at London Tech Week, “The 2022 Global Startup Ecosystem Report,” ranked Miami among the top 15 North American ecosystems in funding. The Knight Foundation, the report says, “worked in concert with Startup Genome to showcase Miami’s entrepreneurial ecosystem” in that study.
There’s no absolute accuracy for such “Top X” rankings, though if Miami’s goal is to be biggest and best, breaking into the top 15 is not parade material. But the ranking has meaning if our aim is to add to an economy that is already growing in other directions. So does creation of better-paying jobs.
From 2013 to 2020, Miami area software jobs increased faster than in any other metro hub for software employment, the Knight-funded report says. That 44% growth more than doubled the US average of 21% growth.
In 2012, the report says, we had 37,000 regional workers in software occupations, about the same as in 2006. But by 2020 the number soared to nearly 54,000, mostly added by entrepreneurial tech companies.
A growth of nearly 17,000 tri-county software jobs in eight years is an achievement, but in perspective it’s a gain of about six-tenths of a percent of the region’s workforce. In Miami-Dade alone, in that period financial activities gained more than 10,000 jobs. Prior to the pandemic, leisure and hospitality jobs had grown by 22,000 in the period just in Miami-Dade.
And, as the Knight-funded report also notes, we trail far behind most regions in percentage of persons working in software, so “much work remains.” We are 68th in the US in the proportion of software workers, just 2.1% of all jobs, the report says. “Catching up to the proportion of the US metro average would require 20,000 additional software workers.” To match Atlanta or Austin we’d need 45,000 to 65,000 new software workers today, a long reach, and Austin ranks just seventh in the US, Atlanta 16th.
Our tech job growth is strong, welcome and important. But today it’s not the engine pulling the train.
So, would tech job growth be even stronger if we had more trained talent?
The report issued in London says Miami is in the top 20 North American regions in talent and experience and among the top 30 in affordable talent. Those rankings say Miami won’t lure growing tech companies based on trained workers. The Knight-funded report says our managerial talent is also in short supply.
“Access to technical talent is the greatest challenge identified by local founders and investors,” that report says.
Recently fashionable models to add tech talent in apprentice programs, coding academies and boot camps failed to meet the demand for workers, the report says under a heading of lessons learned. Many of those here closed when philanthropic funding ended, the report says, as is true in other cities.
If talent won’t spring from such efforts, the answer seems to be higher education. Knight has committed more than $22 million to efforts here and others are also funding our engineering, technological and computer science higher education. Florida International University, the report says, grew from 2,000 computer science majors in 2018 to 3,000 in 2021 and is projected to hit 5,000 in 2024. That will help – if we retain the bulk of the grads in Miami.
Yet, the report notes, as we add software workers they are likely to also increase nationally. “If this occurs, catching up to peer regions or even national average will require additional solutions,” vital answers that the report didn’t attempt.
The London report says Miami’s magnets as a tech startup hub are “higher education, low taxes, and access to venture capital.” Those three alone may not be enough.
Which brings us to six highly visible impediments to growing a tech powerhouse – the same six Miami faces in growing every economic sector. The Knight-funded study points to shaky local transportation, too little affordable housing, questions of school quality, labor force gaps in general, too few minorities in higher level jobs, and climate change threats.
This basket of concerns is no surprise. Upgrading them would not only grow tech but improve living standards while building jobs across the economic spectrum.
The Knight Foundation has been strategic and focused, investing more than $60 million in tech entrepreneur sector gains. But that funding alone can’t balloon tech in an area short of engineers, with spotty tech workforce training, and facing societal challenges as well.
In spurring our economy, that well-thought-out Knight investment was light years ahead of the $3 billion that the county sank into a baseball stadium. But the two reports don’t point to the entrepreneurial tech sector as our greatest future economic pillar, at least in the short haul.
Miami’s best overall investment in economic growth is likely to be the pivotal issues of housing, education, transportation, environment and inclusion. Praise tech gains to the skies, but build the broad basis of our community to increase that growth – and all other growth as well.