By Lauren Comander
From his perch as a Google employee in San Francisco, Miami native Hector Mujica (BBA ’11) kept a close eye as the tech ecosystem began taking off in his hometown. As the head of economic opportunity for the Americas at Google.org, the philanthropic arm of the tech giant, Mujica knew what cities like Miami needed to do to create an inclusive tech economy that works for everyone.
It wasn’t long before the pull to help became too strong to ignore. He packed his bags and moved across the country, adding his voice to the chorus of others calling for intentionality in how the city responds to this boom. “The potential opportunities here are tremendous, and I’m thrilled to be back,” he said.
Indeed, fueled by year-round sunshine, lax COVID-19 restrictions and relatively low taxes, Miami has taken the spotlight as a growing home base for tech entrepreneurs and financial services companies alike. As the Magic City draws companies from Silicon Valley, New York and Chicago (think tech companies like Blockchain.com and Pipe Technologies, and financial powerhouses like Blackstone and Citadel), FIU Business professors and local business executives caution that Miami should retain a laser focus on its unique strengths: its cultural diversity, its proximity to Latin America and status as an international crossroads well-served by airline connections, and its global leadership in blockchain and cryptocurrency. At the same time, they say, the city must make a concerted effort to invest in local infrastructure and education to mitigate impacts of economic growth.
Thanks to decades-long work and investment by local organizations to prepare Miami for this moment – and not because of happenstance or a single Tweet – Miami is experiencing nothing short of explosive growth, Mujica said.
It extends to both the finance and tech spheres. In 2020, more than $1 billion in venture capital was invested in South Florida and Miami ranked among the top 10 cities for startups. Last year, Miami metro area companies attracted $5.33 billion across 285 deals, led by crypto startup MoonPay, as Dan Sundheim’s D1 Capital Partners and private equity giant Apollo Global Management Inc. put down roots in Miami.
From a small critical mass in tech and financial services, Miami really took off during the past several years.
This year, as headlines continue to flow about companies relocating or opening offices in South Florida, Miami hosted the Bitcoin 2022 conference, where the city threw shade on New York by unveiling the Miami Bull, a 3,000-pound futuristic statue of a charging bull fashioned after the one on Wall Street. Citadel’s announcement in June, meantime, cemented Miami as one of the newest financial hubs.
“From a small critical mass in tech and financial services, Miami really took off during the past several years,” said Jerry Haar, professor and executive director for the Americas at FIU Business. “Besides our weather and absence of a state income tax, factors such as poor public management and burdensome regulations, high crime, and the growth of remote work have driven professional classes out of New York in particular; and South Florida is where they want to come. The change in the tax law that caps deductibility of home mortgage payments is still another factor.”
Perhaps Miami’s biggest asset, experts say, is its cultural diversity, with more than half of the city foreign-born. “This positions Miami especially well to add unique value to tech and new innovations,” Mujica said. “Startups and tech ecosystems that are building and designing in Miami are not building and designing just for the U.S. but for the world.”
As an enclave for immigrant entrepreneurs, Miami offers its diverse communities a leg up thanks to connections with their homelands. “They are part of an affinity group whereby they both help one another and compete against one another,” Haar said.
As a whole, the population is very entrepreneurial, always looking for the next big thing. “The people here are motivated to find ways to circumvent whatever problems they’ve had in their communities,” said Deanne Butchey, teaching professor of finance at FIU Business.
No doubt, the city also benefits tremendously from its geography. “Miami is the business capital of Latin America, endowed with a world-class airport and seaport,” Haar said. “The proximity to Latin America and easy connections to Europe place international business front and center as a nexus for global commerce.”
As the so-called capital of Latin America, Miami has been on the forefront of blockchain and cryptocurrency and must continue its global leadership, Butchey said. Instability in countries like Venezuela and El Salvador led people there to turn to cryptocurrency that they, in turn, brought to Miami long before it hit elsewhere.
“The potential for blockchain in all these industries is huge, and people shouldn’t feel disillusioned because of what’s happening with cryptocurrency because blockchain is much more than cryptocurrency,” Butchey said. “Miami needs to maintain and keep that edge. We need to build the knowledge of our students to be prepared for the next generation of jobs.”
South Florida native Eric Barberio (BBA ’90) moved to Silicon Valley eight years ago because that’s where his career in corporate finance took him. He has longed to return home and believes the time has come. As a venture capitalist as well, he advises a few companies that he hopes will relocate to South Florida.
“South Florida has been making wonderful improvements as far as expanding its focus from tourism to industry and bringing companies in, creating more diverse jobs,” said Barberio. “It has me very excited! It shouldn’t all be in Silicon Valley. Florida is very company-friendly, and you’re starting to see VC companies and angel investors take notice.”
That said, Barberio has some ideas he’d like to bring with him from Silicon Valley to strengthen Miami’s ecosystem. “Some of the biggest success stories are coming through networks of funders,” he said. “I want to see the South Florida community of funders really build and help produce entrepreneurs locally. I want to see a real ecosystem with tight networks.”
One way to do this, he said, is to leverage the local educational institutions and use the alumni base to fund companies. Six years ago, he joined forces with other Oxford alumni in Silicon Valley to invest in a fund supporting those affiliated with Oxford. The once-small alumni group has grown to 3,000 members, with many directly investing in the fund.
Now, he’s hoping to help build a similarly-styled fund for those affiliated with FIU that would invest in South Florida companies. “It needs to be South Florida-centric,” Barberio said. “For several decades, companies thought they wouldn’t have a chance if they didn’t go to Silicon Valley, and the main reason they thought that is because the funding is here. We want to see companies look at Florida, and if there’s funding available, they will.”
Miami must prepare for and respond to the blossoming ecosystem. “We have people willing to move here because it’s viewed as a really nice place to live,” Butchey said. “For people to stay, there is going to need to be investment in many areas.”
With Citadel’s founder and CEO, Kenneth Griffin, citing crime as the reason for his Chicago exodus, Butchey says now is also the time for Miami to invest in crime reduction. “We also need affordable housing and transportation infrastructure to get to and from the suburbs,” she said.
As importantly, the city must invest in education, both to keep the top talent and to create opportunities for upward mobility to mitigate the impacts of economic growth like displacement and a broadening of the wealth gap, Mujica said.
Meanwhile, creating upward mobility requires investment in other approaches to learning. Toward this end, Google earlier this year announced a $100 million fund to train underrepresented Americans for an increasingly digital economy. The company also continues to invest in Miami and the state of Florida through philanthropy, workforce development training and support for local small businesses. “All communities have individuals who have skillsets and the potential to participate in the digital economy,” said Mujica, who spends much of his time in his role at Google.org thinking about how to ensure that nontraditional learners have equitable access to digital economy jobs. “We need to be able to unlock that talent and potential. That will require creative ways to approach learning and pathways into digital economy jobs, things like apprenticeships, bootcamps and employerbacked credentials.”
If the city doesn’t invest in infrastructure and education, Mujica warned, Miami risks facing inequalities similar to those that emerged in other parts of the country. “We’ve seen the canary in the coal mine, and we’ve seen other markets that were intentional about building the right infrastructure to support the groundswell,” he said.
The stakes, Mujica said, couldn’t be higher.
The diversity of South Florida is a harbinger for what the rest of the country will look like in the next few decades, he said. “There’s something really meaningful and important about this moment in time where Miami finds itself, and that is the tremendous potential that South Florida has to get tech inclusion right,” Mujica said. “If we get it right here, we get it right in America.”