“We are 50 million strong and growing. We are risk-takers. … We are the future.”
-Mike Fernandez, Cuban immigrant and billionaire serial entrepreneur from Miami, Florida
The Academic Entrepreneur loves Miami.
He loves Miami not just because of South Beach and its buzzy nightlife and creative culture, its beautiful women, its sandy white beaches or colorful architecture. No, its not because his favorite hotel, the Delano, is located there (although the new Kimpton Surfcomber is nice as well) or his favorite breakfast spot, the News Cafe. He finds it fascinating not just because the fabulous Florida Atlantic University and its Entrepreneurship Center, of the up-and-coming University of Miami, a dynamic institution of higher education which is dripping with academic entrepreneurial opportunities, or its seemingly dangerous neighborhoods one can wander into unexpectedly in a New York minute. Rather, it is the vibrant immigration population and its hard-working, exciting, innovative entrepreneurs that gets the Academic Entrepreneur jazzed about Miami. Arriving in Miami is like stepping into a utopia of opportunity in an other-wordly place. The charisma is almost palatable. Attending recent events there with groups such as Geeks on a Plane, the Cornell Latino American Association, and the Cornell Hotel Society left the Academic Entrepreneur yearning to return to Miami. There is an over-arching hope that is found in such places as Vietnam, and a zest for entrepreneurial ventures akin to the Silicon Valley. Much of this is related to the up-and-coming Latin American marketplace. This has been surging for years. The Academic Entrepreneur once lived in Miami, and worked in a business development role for a start-up that targeted Latin American markets. This was a long 20+ years ago. Today, the opportunities are even bigger, swifter, and faster growing. Essentially, Miami has become the center of entrepreneurship and innovation for Latin America. Granted, it has its problems as a diverse city and dynamic MSA. All cities do. In a sense, its a libertarian land with a survival-of-the-fittest mentality which underlies its entrepreneurial flair.
A night out in Miami and one is sure to run into dozens of entrepreneurs, few of which were born in the USA at that. They will be from Peru, Argentina, Brazil, Chile, Ecuador, Mexico, and, of course, Cuba. They are involved in all sorts of businesses, from import-export to high tech, and have networks around the world, and are doing all sorts of very interesting deals. These entrepreneurs are diverse, intelligent, ambitious, global and savvy. There is just one thing that they don’t have which their counterparts have in Silicon Valley: A healthy supply of institutional venture capital. But the Academic Entrepreneur won’t open that can of worms just now, for it will take another blog post or two or three to explore the supply of entrepreneurial finance in Southeast Florida, where the bottlenecks are located, and how policy and programmes could help increase it.
Yesterday’s article in the Miami Herald “Report: US Hispanic Entrepreneurial Growth Dramatic” is worth a read and was the inspiration for this post. It highlights a few reports, including that from the following:
- The Partnership for a New American Economy and the Latino Donor Collaborative: “How Hispanic Entrepreneurs are Beating Expectations and Bolstering the US Economy“
- The Kauffman Foundation: “Lessons for U.S. Metro Areas: Characteristics and Clustering of High-Tech Immigrant Entrepreneurs” also mentioned in the article “South Florida Strongest in Immigrant High Tech entrepreneurial Growth“
Besides the fact that Hispanics are now the fastest growing entrepreneurial population in the United States, it highlights the importance of immigration to a region itself.
Miami as a case study exemplifies the assertion of the Academic Entrepreneur that immigration is highly correlated with entrepreneurship and innovation in a region.
- There may be no better innovation and entrepreneurship policy than a liberal immigration policy that attracts entrepreneurs to the shores of a country or the gates of a city.
- The university’s role in this attraction is significant as students from all over the world come to study at a university, get embedded in the region, and often have the desire to stay and build a career and life path. Entrepreneurship is the most viable career option for many of these students and graduates. Policies and programmes that integrate entrepreneurial learning, acceleration and incubation, and visa acquisition from a university education are powerful, yet under-exploited, catalysts for economic growth.
The number of Hispanic entrepreneurs in the USA has grown substantially since the Academic Entrepreneur lived in Miami himself:
“Based on U.S. Census and American Community Survey data, the report found that between 1990 and 2012, the number of Hispanic entrepreneurs in the U.S. more than tripled, rising from 577,000 to 2 million. During the same period, the number of non-Hispanic entrepreneurs grew by just 14 percent.”
“Since 2000, which included the recession, the number of Hispanic entrepreneurs grew by 71.5 percent, and among Hispanic immigrants, that number was 81.3 percent, the study said. Yet growth among non-Hispanics was just 3.1 percent. And while Hispanic immigrants were less likely than the U.S. population overall to start new businesses in the 1990-2000 period, that trend has reversed in the most recent decade.”
There is no faster growing segment of entrepreneurs in the United States. Granted, at this time:
“Hispanic-owned firms are also more likely to be small, with fewer employees than companies founded by non-Hispanic entrepreneurs”
However, this could well change as more and more of these immigrant entrepreneurs are starting high-tech businesses, and are becoming educated and more sophisticated. The LauchPad at the University of Miami, for example, was recently founded by a friend of the Academic Entrepreneur, Susan Amat. Susan has moved on to start VentureHive in Miami, an incubator that opened its doors just a year ago in Miami.
““The Venture Hive Incubator will cater to the scores of companies in South Florida that need affordable office space, access to experienced entrepreneur support services, and to be part of a dense community of technologists with cool startups. This is not a co-working space — it’s for only startups, all the time,” said Amat, speaking by phone last week from Harvard University, where she was participating in the International Women’s Forum leadership training”
As more entrepreneurial infrastructure such as the VentureHive comes online in Miami, the sophistication and size of companies created by the immigrant entrepreneurial population will increase.
Why do immigrants make such great entrepreneurs? This is a PhD thesis itself, but let’s have a go at it now. There are a variety of viewpoints on this and some emerging research as well. Often, its based on “Necessity Entrepreneurship” at theory that basically says entrepreneurs start new firms because they have to do so, because they are “pushed” into it. No one will hire them or they can’t find jobs. Another reason is that they simply don’t want to return home to less-than-ideal circumstances. Many of them also have come from working class families with strong work ethics, and they carry through that work ethic to the new country that they now call home. They don’t assume privilege from the state, and often can’t qualify for any social benefits anyway.
From the Miami Herald article cited above we here from one such immigrant entrepreneur:
That Hispanics are more likely to take risks and start businesses doesn’t surprise Mike Fernandez, the billionaire serial entrepreneur from Miami, who shared his story about arriving with his family from Cuba at age 12, working nights and weekends throughout high school, and being inspired by his father who “had a sixth-grade education but an incredible work ethic.” Though he never finished college, Fernandez — now chairman of MBF Healthcare Partners — went on to found or run 24 businesses. “Many of us are not afraid of failure because we can’t go back to where we came from or we don’t want to,” Fernandez said. “This is our new home.”
The Kauffman report cited above had this to say about immigrant entrepreneurship:
“Because immigrants are far more likely to start businesses – particularly high-tech companies – than are the native-born, their importance in the U.S. economy is increasing,” said Dane Stangler, vice president of Research & Policy at the Kauffman Foundation. “As America seeks to grow more high-tech businesses, this research provides strategies and policy implications for cities and states that want to attract highly skilled immigrant entrepreneurs.”
This takeaway is just as important to Scotland and other countries as it to the United States of America. Immigrants CREATE jobs through new firm formation and innovation.