As We Think Big About Miamis Economic Future Think Small
Written by Michael Lewis on September 1, 2011
By Michael Lewis
As Miami’s economy struggles to regain vitality it’s clear that small business, not corporate giants or government, will carve the path to better days. We’ll need to think small to grow big-time.
Entrepreneurs and risk-takers have always been Miami’s backbone. They start as mostly unknowns, but a good share work their way up to become area powerhouses.
Now, more than ever, small but nimble enterprises are gaining fastest and seem likely to add the largest percentage of new jobs.
There’s no better poster child for small business growth than .CO Internet, which we featured two weeks ago. In its less than two years the company has hit $20 million annual revenue — with staff now at 15 persons.
That’s extreme, but small success stories pop up everywhere as small businesses grow larger and employ more. These small businesses are the better part of our future.
That might always have been true, but it wasn’t always evident.
It was 20 years ago this month that Miami’s bedrock Southeast Bank fell to a federal takeover, shocking the community. Though at the time Southeast might have been solvent and the feds wrong, the impact was still a giant institution fallen from the Miami skyline.
Whether a bank, an airline — we’ve lost more than our share of each — or a major company like Knight Ridder decamping for California, Miami over the years has lost most of its huge home-grown employers. Even our present cruise giants are doing more and more farther and farther away.
The erosion of bigger employers spotlights the need for replacements. Yet few household-name employers are likely to move their homes here.
That requires the One Community One Goal job creation drive the Beacon Council is now spearheading to find ways not to lure giant employers here but to create, nurture and grow our own small companies that can expand.
Southeast Bank’s replacements aren’t likely to lead. Bankers aren’t taking risks today and certainly not for smaller businesses, the economic backbone of Miami.
Nor are most large employers likely to invest big in our future. Big companies nationally are sitting on mountains of cash they’re unwilling to spend to add employees or grow infrastructure.
Governments certainly won’t lead. As they cut local taxes and employees, don’t expect government spending to create jobs.
So as One Community One Goal findings are rolled out, focus will be crucial. Outside consultants will recommend action, but sculpting those recommendations to fit Miami’s realities will be vital.
And for all the glitter a giant new employer would have, far more likely to help us is growth in what’s already here plus small startups and implants that could expand to midsize employers.
In fact, the preponderance of Miami-Dade’s 74,297 employers the US Census tallied in 2008, its most recent count, are small.
Statewide, more than half of all workers — 4.2 million of 7.4 million — are in companies that have more than 500 on payroll, 4,460 large employers in all.
Still, businesses with fewer than 100 on staff employ more than a third of Florida’s workers. And most of those companies are based in state.
More important, the percentage of Florida workers that bigger companies employ fell from 10 years earlier. Only in companies of fewer than 20 workers did percentages of total Florida workers grow, as smaller business gained importance.
In Miami-Dade, population grew almost 11% in the past decade while the percentage age 65 and up fell from 17.2% to 14.4%. We’re getting younger, with more of us working age. We’ll need more jobs, and corporate giants aren’t adding them.
Small businesses can be anything from a coffee shop to a .CO Internet startup. We’re counting on One Community One Goal to determine which categories are likely to give us the best bang for our economic buck, creating the most above-average jobs.
As we in the coming eight months or so focus on the output of that jobs study, we’ll be asked to think big to create more high-paying jobs for our future. That’s good advice.
But in the end our big thinking should lead us to think small. To succeed, community policy must be to nurture the small but nimble companies destined to make a big economic impact on Miami.