Miami-Dade’s problem: too few large businesses

Earlier this month, Beacon Council CEO Frank Nero was asked to leave after almost 17 years at the helm of the economic-development organization. Now, there’s the difficult task of finding a new leader.

More difficult still for the Beacon Council: finding a new direction.

When the Beacon Council was created in the 1980s, county leaders made business recruitment one of the organization’s central goals. It was a popular economic-development strategy throughout the nation at the time.

Times changed; our strategy didn’t.

That was made clear last year when the Beacon Council revised One Community One Goal, a multi-pronged plan for growing the local economy. Instead of using the opportunity to completely rethink its approach, the council rehashed an old plan that seemingly continued to make outside recruitment central to its mission. For example, it called for a $15-million marketing fund to lure businesses to our area.

Yet, in recent years, communities increasingly have been finding that their job growth is driven by local talent and existing businesses.

That’s not all we’ve learned in the almost three decades since we created the Beacon Council. During the ’80s, a researcher named David Birch argued that small businesses accounted for about two-thirds of new jobs in the United States. His was a politically popular thesis that overwhelmingly drove economic-development policy toward helping small businesses.

Since then, however, several studies have either found his conclusions to be outright wrong or, at best, exaggerated. Furthermore, other recent studies show large companies not only account for more jobs, but they also produce better-paying jobs and contribute more to innovation and productivity (a truly important indicator of a metro’s economic health).

You wouldn’t know that by listening to some of the recent suggestions that the county redirect its economic-development dollars toward mom-and-pop businesses and start-ups. Our problem isn’t a lack of small businesses. Our problem is a lack of large ones.

There are many good reasons to promote small businesses and startups, but I worry that the focus on them is coming at the expense of not focusing on the needs of the kinds of businesses we truly need in Miami-Dade: successful large companies.

Yet those are exactly the kinds of businesses we’re losing, many of them moving out. According to data from the Edward Lowe Foundation, a nonprofit that tracks business and job creation over time, during the past decade Miami-Dade County steadily has been losing large companies of 100-plus employees.

At the same time, from 2000 to 2010, the number of small commercial establishments in the county (one to nine employees) skyrocketed more than 240 percent. Much of that growth came from an explosion in the number of self-employed enterprises, where the number of workers amounts to just one person.

This is a significant, structural shift in the makeup of our local economy. It’s a trend that’s taking place throughout much of the country, but which is particularly pronounced in Miami-Dade.

After more than 20 years of analyzing companies, industries and local economies, I know the impact of that shift isn’t only on jobs, but also on a community’s levels of corporate philanthropy, ability to raise capital and general business culture.

If we truly want to improve the dynamics of our local economy, then Nero’s replacement at the Beacon Council not only will have to chart a new direction for the Council, but for our community as well.

Making a difference, after all, is Job One.

Jackie Bueno Sousa, a former Miami Herald metro columnist, specializes in business and regional competitiveness and is a contributing author of “City Competitiveness and Improving Urban Subsystems.”

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