There has been a lot of talk regarding an increase in the Miami tech movement in the past few months. In order to fully capture the value created by successful companies and entrepreneurs moving to South Florida, it is imperative that we allow them to integrate themselves into our community. Failing to do so, may encourage the creation of a separate ecosystem exclusive to incoming entrepreneurs or cause them to leave in favor of other burgeoning tech hubs. Successfully integrating them into our current ecosystem will expedite the development of a virtuous cycle of entrepreneurial reinvestment where local leaders create an environment focused on the growth of new, large, thriving entrepreneurial companies.
Endeavor believes that entrepreneur-led economic development is the best way to achieve long-term economic growth. This allows Miami’s leaders to enhance the city’s competitive advantages to generate more high-wage jobs and develop our major business sectors. The four recommendations made by our Endeavor Insight report are as follows:
#1: Avoid the “Myths of Quantity”
Decision-makers commonly assume that increasing the quantity of new or small businesses will automatically generate greater productivity in an entrepreneurship community. Data from the report on the Greater Miami area demonstrates that this is not the case. Most new businesses fail between three years or remain too small to have any lasting local impact. Some communities have even seen “crowding out” effects that cause more successful founders to lose influence and have difficulty accessing local resources because they are displaced by a large number of new companies and support programs.
#2: Focus on Scale
Larger businesses that reach the scale of 50 or more employees pay higher average wages than smaller companies. Though the Greater Miami area is home to dozens of programs for entrepreneurs, analyses conducted by Endeavor Insight indicate that the majority of local support organizations currently focus exclusively on early-stage entrepreneurs. Meaning that there are opportunities to direct more resources to initiatives that cater to growing businesses that have achieved scale already or are on track to become scale-ups in the near future.
#3: Follow the Lead of Successful Local Founders
Successful entrepreneurs are some of the most knowledgeable economic development researchers in any community. Each time a local entrepreneur grows their businesses to achieve scale, it offers valuable data on the type of company that can thrive in the city.
Local leaders should continually reevaluate data on local larger, high-value, entrepreneurial companies to see if any new competitive advantages in entrepreneurship emerge.
#4: Build Networks Around the Best Local Entrepreneurs
Previous research shows that when successful entrepreneurs who reached scale support upcoming founders, it increases the odds of success for upcoming local businesses. The primary avenues that experienced entrepreneurs can follow to support newer founders are mentorship, investment, and leadership roles at local entrepreneurship support programs.
Following these four recommendations allows for entrepreneurs to generate a greater long-term impact by providing the local community with higher-paying jobs and passing down their knowledge to upcoming entrepreneurs. Remember, it’s all about being open to learning and paying it forward!
Research for this blog post can be found on Endeavor’s Insight Report, “Miami Competencies”. Additional reporting provided by Endeavor staff member Eric Marroquin.