Miami is known for its heat, but equally, it’s known as an attractive home for startups. However, while Miami earns the distinction of being the second in the nation for startup creation, it also ranks low for growth and scalability.
Kauffman Foundation published a study that demonstrated that Miami-Fort Lauderdale metro area ranked second from the bottom out of 40 metro areas in the growth of fast-growing companies. This news comes just one year after Miami came in second for job creation and sixth in the nation for small business activity.
The 2016 Kauffman Index of Growth Entrepreneurship utilized data on revenue and employment to rank metro areas and states. Looking at the first five years of business, they looked at fast-growing companies reached at least 50 employees by year 10, high-growth company density, or the number of private businesses with at least $2 million in annual revenue. Comparably, Washington, DC came in No. 1, performing three times better than Miami in every category (No. 39). In the state of Florida, Jacksonville (No. 23), Tampa (No. 26), and Orlando (No. 35) ranked higher than Miami. In the nation, only Detroit ranked lower.
“Miami is a place that does very, very well on startup activity – a lot of people are becoming entrepreneurs and starting companies,” said Arnobio Morelix, senior research analyst and program officer in Research and Policy at Kauffman, which studies and supports entrepreneurship. “But when we look at how firms grow after they start, we don’t see Miami doing very well.”
The good news? Miami has a good density of startup companies, so it’s just a matter of engineering businesses to scale better. Some important facts that key to grow an entrepreneur are connectivity, density, fluidity, and diversity.
Knowing one’s proximity to similar companies, knowing how to connect for the purposes of resources, know how to assemble resources locally to grow talent and money, and recognizing the diversity of skill sets. With Florida ranking 24 out of the 25 largest states ranked for growth entrepreneurship, Florida still marked the state ranked in the top five for health entrepreneurship.
Miami is working toward developing a robust entrepreneurial ecosystem. Within the past few years, the Knight Foundation has committed more than $20 million to more than 160 entrepreneurship projects and organizations throughout the city. Numerous Miami-based organizations are focusing on scaling up.
Also, Florida ranked 14th in the nation for venture capital growth in 2015. Ultimately, the Kauffman Index of Growth Entrepreneurship offered that U.S. entrepreneurial growth across industries and states. Miami’s entrepreneurial business growth has helped the region to the Great Recession, and it’s directly helped to spark wealth, job, and innovation increases.