Few places on Earth invoke the kind of economic envy that Northern California’s Silicon Valley does. So much so, that hopes of being the “next Silicon Valley” have spawned scores of wannabes worldwide such as Silicon Oasis (Dubai), Silicon Cape (Cape Town) and Silicon Sloboda (Moscow). In the U.S., “Silicon Beach” is coveted by five cities, among them Miami.
Obviously, all these places share the same ambition: to attain the lucrative concentration of fresh talent, disruptive ideas and venture capital that has driven Silicon Valley’s technological innovation and financial success over the past 50 years. The problem is that there’s only one, and will always will be only one, Silicon Valley.
Should places like South Florida, with the means to foster technological innovation locally, abandon their ambitions? In a word, no. Some, like Israel’s Silicon Wadi, have gone beyond pretension: The Economist ranked it second in the world to Silicon Valley in the concentration of home-grown, high-tech companies, with U.S.-based global firms such as IBM, Microsoft, Hewlett-Packard, Google, Cisco and others having research facilities there.
Did Silicon Wadi happen overnight? No, it took about 40 years, with roots established even earlier than that. Did the Israeli government help? Yes, with low-interest loans and substantial grants, many notably from Israel’s military. Was academia involved? Indeed, Israel’s Technion – Israel Institute of Technology – and its Weizmann Institute of Science are ranked among the world’s top 20 academic institutions in computer science. Venture capital? Yes, that helped accelerate the region’s success, too.
In the late ‘90s, Latin American entrepreneurs flocked to Miami, considered the Americas’ crossroads. The Lincoln Road promenade teemed with Latin notables, such as StarMedia Network, Yupi.com, Patagon.com, DeRemate, Viajo.com, eritmo.com and El Sitio, while others, like Zona Financiera and Telefonica de Espana’s Terra Networks were nearby. Although South Florida wasn’t a tech hotbed then any more than now, IBM’s Boca Raton campus was where the PC was born and still employed more than 10,000 people. Fort Lauderdale’s Citrix Systems went public in 1995 and ended the decade with more than 1,000 employees. In 2001, the Terremark NAP (Network Access Point), which carries nearly all of Latin America’s Internet traffic to and from 148 countries, opened in downtown Miami.
So what happened to Miami’s Silicon Beach community when it seemed to be percolating so nicely as we entered the 21st century?
We became complacent. We took the sprouts of innovation for granted rather than cultivating them. Then came the great dot.com bust of 2000, which tightened the reins on venture capital for years. The Great Recession of 2008-2011 was the near knock-out blow.
In my conversations with Latin-based startups over the past several years, I’ve found that, sadly, almost none have expressed interest in a regional headquarters in Miami. Today’s successful Latin American technology companies look to Sao Paulo, Brazil, as the launching point for a regional expansion strategy. And they’re much more likely to open an office in Palo Alto than in Miami as a next step.