STORY INLINE POST
During the past 20 years, I have seen interesting progress in the city of Miami in relation to greater business opportunities, improvement of urban infrastructure and new cultural and artistic activities, among others. However, over the past two years, the pace of development and rate of transformation of the city has been even more significant as Miami becomes a magnet for businesses relocating from other cities and countries. Latin American companies and entrepreneurs interested in local and regional expansion and integration with the US should take advantage of the opportunities that Miami offers today for their growth and diversification plans.
As mentioned in The Economist (May 7, 2022), “If Latin America has a commercial capital, it is Miami: Despite not being in Latin America, it offers cash, connections and creativity to the region.” Miami is a business hub for the region. The city has more than 1,000 multinational company offices focused on their Latin American operations. More than 40 percent of flights from the US to the region depart from Miami International Airport. The time zone allows doing business throughout the region without major disruptions. Several Latin American technology companies have chosen Miami as their base for the region and entry into the US market. In this same article, Mauricio Claver-Carone, former president of the IDB, said he sees a trend for “regionalization” over “globalization.” "There's no greater city that encapsulates the heterogeneity of Latin America and the Caribbean." This plays to the benefit of Miami as a Latin American business hub.
Most of the inhabitants in Miami-Dade County were born outside the US, more than 70 percent are of Hispanic origin and the main language is Spanish. Latin American migration has grown in recent decades due to political and economic problems in the region, thus helping shape Miami into a very dynamic and unique international destination.
Today, Miami has also become one of the most vibrant cities in the US due to significant business and population migration from other US cities to Miami as a result of state and local pro-business policies during COVID-19, the warm weather and lower taxes compared to other cities and states in the country. Since 2020, countless highly mobile and motivated businesses and professionals have relocated from New York, California and Illinois, creating new business opportunities and attracting interest from investors as far away as Europe and the Middle East. See the Financial Times article, “How Miami became the most important city in America (Feb. 3, 2022).
Important companies, such as Amazon, Blackstone, Starwood Capital, Softbank, Apollo Global Management, Microsoft and Spotify, have established or grown their offices in South Florida in recent years, increasing their hiring of personnel and in some cases migrating workforce from Latin America.
Miami has generated particular interest from the American and Latin American technology community (startup and venture capital) as a center for business, connections and raising capital for their companies. The mayor of the city of Miami, Francis Suarez, has been positioning and promoting the city throughout the country and the globe. Now famous, his Twitter response “How can I help?” to a tech entrepreneur who suggested moving Silicon Valley out of the Bay Area generated more attention for Miami. Major venture capital investors, private funds and international law firms have been moving and opening offices in the city. These groups are showing interest in investment opportunities in Latin America by being exposed to connections within the region. Also, regional family offices have moved or opened offices in Miami to cover business in Latin America and the US.
Recently, Miami achieved first place in the FT-Nikkei Investing in America ranking for foreign businesses. During 2020, foreign investment in Miami grew by 70 percent, whereas it decreased nationally in the US during this same period, thus confirming Miami’s position as an international hub beyond Latin America.
The rapid growth trends highlighted above have created challenges to the future development of the city that must be mitigated if Miami wants to continue with this positive trend. These include a shortage of highly-skilled workers, a limited number of highly recognized local universities offering technical degrees, a significant increase in the cost of living that is limiting access to affordable housing for middle and lower classes, which exacerbates income inequality, the impact of climate change, limited career opportunities for recent graduates, traffic congestion and lack of an extensive public transportation network.
Latin American entrepreneurs and companies should take advantage of the opportunities that the city of Miami offers for businesses: access to capital, international banking alternatives, networking with a dynamic business community for new opportunities as well as the growing diversity of philanthropy and cultural activities (for example: Art Basel Miami that starts in a few weeks) that can help boost the growth of businesses in Latin America while opening new opportunities with the US.