For decades, Miami has been the main entry point for migrants arriving from Latin American & the Caribbean into the United States. The connection between the South Floridian city and the region runs deep, both culturally and economically.
Though Miami might best be known as a tourist destination, a party town that dances to a different beat, it has undergone a quiet revitalisation that will dramatically alter its future.
The ailing downtown area has been refurbished as the foundations for a new digital economy have been laid.
Now, after an invitational tweet sent by Mayor Francis Xavier Suarez to some of Silicon Valley’s most influential VC firms went viral, Miami’s burgeoning tech ecosystem is in the spotlight. Deep-pocketed financers including Peter Thiel are buying homes there, and Miami is catching a buzz. The Latin American connection is at the heart of Miami’s new tech-driven master plan.
“It’s an overnight success 10 years in the making,” Matt Haggman, executive VP at One Community One Goal of Miami-Dade Beacon Council, an initiative intended to set out a blueprint for the city’s economic future, told Nearshore Americas recently. “Covid-19 accelerated the trend of Miami’s growth as a tech ecosystem, but one of the primary drivers of that trend is how Miami is intertwined with Latin America.”
A Deep Economic Connection
Following the pandemic, tech professionals have scattered from established US tech hubs like the Bay Area and New York, across the country in search of lower house prices and an improved work-life balance. While other cities like Austin and Denver are benefiting from this influex, neither has the historical connection that makes Miami the country’s nucleus for Latin American interest and a prime Nearshore location.
Charly Esnal, co-founder of BASE Miami, a management consultancy that helps Latin American organisations find their footing in the US market, believes that Miami’s recent emergence as a technology and software hotbed has built on the city’s longstanding business relationship with Latin America, and South America particular. The Argentinian says Miami offers more benefits than any other US city for Latin American entrepreneurs.
“Being in Miami means you can access the buyers and decision-makers of very large US companies through their Latin branch. The barrier is lower here because these executives understand the culture a Latin American entrepreneur is arriving from; many of them are migrants or the children of migrants themselves. There is that openness and a cultural affinity that cannot be matched anywhere else in the US,” he said.
Economic figures bear this out this relationship. In 2016, nearly one-third of all US exports to Latin America and the Caribbean left from Miami while 74% of Florida’s US$50.1 billion exports went to Latin America and the Caribbean.
Over 1,400 multinational firms are located in Miami, with many major global organisations headquartering their Latin American operations in the city. These include Microsoft, Oracle, Cisco, AIG, Walmart and Sony.
Now, digital native companies are expanding there too. Crunchbase data suggests that companies in Miami raised around a billion dollars in funding last year. Though that was a way off the approximately US$62 billion raised by companies headquartered Silicon Valley in the same year, these are giant steps for the tech ecosystem of a city that barely registered on the radar of technology professionals a few years back.
In January 2021, Japanese software company Softbank announced a US$100 million Miami Initiative, “dedicated to supporting and building the community of start-ups in The Magic City”
Alongside major VCs like Founders Club, multinational software companies are also backing the city. In January 2021, Japanese software company Softbank announced a US$100 million Miami Initiative, “dedicated to supporting and building the community of start-ups in The Magic City.” This Miami-only initiative now sits alongside the company’s US$5 billion investment into Latin America via the Softbank Innovation Fund.
The interest doesn’t stop there. In June, the first ever IDB-organized business forum for the promotion of trade and investment between South Florida and the Latin American and Caribbean (LAC) region, took place. IDB President Mauricio Claver-Carone said that Miami and Latin American & the Caribbean are in the midst of “a historic, multi-generational opportunity” for improving economic development between the two geographies. “Miami is the ideal gateway between both continents,” said Claver-Carone, who himself grew up in the city.
Mayor Suarez also spoke at the forum and underlined his intention to support business opportunities between Miami and the Latin American region.
“We need to continue ushering in the next generation of high-value residents from all over the world who leverage technology in Miami to grow our economy and that of Latin America” — Mayor Suarez
“People are now the most important asset for our economic recovery and expansion,” he said. “If Miami wants to remain the Silicon Valley of Latin America, we need to continue ushering in the next generation of high-value residents from all over the world who leverage technology in Miami to grow our economy and that of Latin America,” he said.
The IDB wasn’t alone in bringing a conference to Miami. In yet another sign of the city’s growing sway within technology circles, Bitcoin, the world’s most popular cryptocurrency, recently held its first ever conference in Miami while cryptocurrency trading platform FTX recently won the naming rights for the city’s basketball team the Miami Heat, team that already has a strong Nearshore connection.
Strengthening the Relationship
Camilo Padron, president of the USA chapter of the Latin American Entrepreneurs Association (ASELA) is deeply invested in creating more opportunities for transnational opportunities. ASELA, set up in Chile nine years ago and now present in 11 Latin American countries, acts as a “bridge” for entrepreneurs between each geography.
“We provide tools, education and resources to companies we believe have the possibility to grow here,” Padron said.
But he’s also blunt when he discusses what Latin American companies need to do before they begin to think of entering the US market. “They need two years of proven income and they need to know that markets are different; what has been a success over there might not be a success over here,” he said. “There can be no copy and paste mentality. The competition in the US is fierce. Lots of entrepreneurs are surprised by what we tell them.”
Padron also notes the shift in perception that Miami’s success is forcing in US companies towards Latin America. Though the history of migration between the two places would suggest Padron advises only Latin American companies hoping to enter the US, that is no longer the case. Now, the Latin American market provides an incredible value proposition that US companies are interested to learn about, he said.
“Miami is still very young as a tech hub. But there are many companies from other parts of the country coming and settling into Miami because they see the internationalization of the city. They see this as a real strength.”