If it seems like everyone you meet is an entrepreneur these days, there’s a reason for that.
Miami has one of the highest rates of new entrepreneurial activity in the country, nearly twice the national average, according to a 2016 Global Entrepreneurship Monitor report released Monday by Babson College.
While 12.6 percent of Americans were starting or running new businesses during the past two years, 22 percent in Miami were doing so, according to the GEM report. And they are likely to be older and more educated with a higher income than their counterparts in many other cities.
Miami has long depended on small businesses more than large corporations. For the past decade, it has been a hotbed for new business creation — a trend that has caught fire as tech-related startups have increased. In South Florida, as in other areas of the country, organizations and universities have been focused on accelerating entrepreneurship with new programs, mentorship, pitch opportunities and co-working spaces. Even Babson itself has launched an accelerator for women and graduate programs in Miami recently.
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For the first time, the highly-watched study included a city-level analysis of entrepreneurship in Boston, Miami and Detroit to provide a window into how entrepreneurship thrives locally. “It’s important to identify and monitor a city’s needs and monitor progress relative to entrepreneurship, whether that means, for example, supporting women or youth entrepreneurs or assisting ventures that introduce innovations or create jobs,” said Donna Kelley, a Babson College professor and co-author of the report.
The American Dream is alive and well, according to the study. Nationally during the past two years, more than 25 million Americans were starting or running new businesses in the United States. More than half of Americans see good opportunities around them for starting a business. That’s 57 percent versus 41 percent globally — a sharp rise from the depths of the recession in 2009, in which just 28 percent saw good opportunities.
In Miami, 65 percent perceive good opportunities around them and more ventures have international aspirations than a lot of other areas.
However, the report isn’t all sunny. Miami entrepreneurs start businesses out of necessity and don’t last more than a year more often than the nation as a whole. Miami also trails in innovation.
Here are some of the GEM report’s national and local findings about Americans who are starting or running new businesses:
▪ It’s not all millennials in hoodies eating ramen noodles, and that’s not because of the weather. Those most likely to start or run a new business in Miami are in the 35-54 age group and in the highest income category, above $100,000. Miami entrepreneurs are also more likely to have some graduate school education than the nation as a whole.
▪ U.S. entrepreneurs are driven most by opportunity (88 percent). Those who started businesses out of necessity nationally dropped to 11 percent. However, in Miami, nearly one in five entrepreneurs — 19 percent — are driven by necessity rather than opportunity.
▪ Thirty-seven percent of all U.S. entrepreneurs are developing and delivering innovative products or services, the highest level on this indicator in 15 years. However, in Miami, that level is just 24 percent, compared to 46 percent in Boston and 43 percent in Detroit.
▪ Miamians are most likely to start business in professional services, followed by wholesale/retail and manufacturing/transportation, the study found.
▪ The gender gap is wider in Miami — 28 percent of males versus 16 percent of females are starting or running new businesses than in the nation as a whole. Still, the slight overall rise in U.S. new entrepreneurial activity is because more women entered entrepreneurship last year than the year before, while this level has remained the same for men.
▪ Compared to national averages, Miami and Boston have more than twice the proportion of entrepreneurs who plan to have more than 25 percent of their total sales go to international markets. And in Miami, more new businesses have international aspirations than established businesses.
▪ Miamians are bullish. They are more positive about their entrepreneurial capabilities and report a lower fear of failure than the nation as a whole. More expect to add employees, too.
Now in its 18th year, GEM is the largest single study of entrepreneurship in the world. The GEM U.S. team, based at Babson College in Massachusetts, is one of 65 national research teams that conducted an annual adult population survey in their economy in the summer of 2016.
The survey results tracked similar trends found in the Kauffman Foundation’s reports, which showed the Miami metro area as No. 1 in the country for new business creation. However, Kauffman’s reports also ranked Miami near the bottom of 40 metro areas for growth entrepreneurship.
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