Employees at big tech companies may be trading in their beloved Patagonia vests for sunglasses and shorts as the sector continues to migrate to warmer climes.
Traditionally, America’s entrepreneurial centers have centered around New York City and Silicon Valley.
But over the past decade, and especially since the pandemic, Miami has risen in the rankings to become a powerhouse in its own right.
The Sunshine State is now home to some of the country’s best-known brands across a variety of industries.
In finance, Citadel and Ken Griffin’s Citadel Securities have made Miami their permanent headquarters, and JPMorgan Chase CEO Jamie Dimon highlighted the redevelopment of the company’s Tampa offices and the $210 million it will bring to the local economy in his annual letter to shareholders.
Companies such as Microsoft, Amazon and now Apple are also reported to be increasing their presence in the region.
The post-pandemic shift of major tech companies moving to South Florida began with Microsoft, which announced in 2021 it was moving its Latin America regional team to the coastal Brickell area of Miami.
A couple of years later, Amazon announced it was hunting for another 50,000 square feet in the area, following its Seattle-based founder Jeff Bezos.
In November 2023, Bezos announced he was leaving his longtime hometown of Seattle for a “billionaire’s bunker” on Indian Creek Island in South Florida, where he now owns three mansions.
Most recently, it was reported that Apple had joined the tech exodus to Florida, occupying 45,000 square feet (4,181 square meters) in a new building in Coral Gables, an affluent suburb south of Miami.
Apple did not respond to Fortune request for comment.
venture capital money
New York and San Francisco have long been considered leaders in entrepreneurship development, and venture capital data confirms this.
Between 2019 and 2021, 27.8% of venture capital investments went to the San Francisco, Oakland, and Fremont metropolitan areas (one of the Silicon Valley cities).
Per data from PitchBookAnother 8.1% of venture capital funds went to other parts of Silicon Valley, such as Santa Clara and San Jose.
Following San Francisco, perhaps unsurprisingly, was New York, which received 14.4% of venture funding over those three years.
This dynamism correlates with the talent base available in both metropolises, which have several of America’s best universities on their doorsteps.
This human capital, combined with billions of dollars of investment, has allowed both areas to establish seemingly unassailable reputations as centers of power for two of the largest U.S. industries.
It may seem impossible that Miami, with its pleasant weather and beach lifestyle, will ever be able to truly compete.
However, according to experts Luck According to the source, the South Florida region also has what it takes to shake up the current situation.
Why is Florida becoming so popular?
While 250 days of warm weather may be a perk of living in the Southeast, it’s not nearly enough to attract the attention of entrepreneurial titans.
First, and perhaps most obviously, Florida. does not have personal income taxwhich may be especially attractive to people with high incomes.
But Kenan Fikri, research director at the bipartisan public policy organization Economic Innovation Group (EIG), says it could go even further.
He explained, “The intensity of the pandemic has really changed a lot, especially in net losses from New York to South Florida.”
Moreover, people who traditionally moved to the South tended to be of retirement age, but the pandemic has forced young people to reconsider their lifestyle and leave the Big Apple in search of larger homes with more amenities.
Because these people are still in the prime of their working lives, they have acquired skills and purchasing power, accelerating a trend that Fikri believes was bound to happen over time.
EIG tracks “economic dynamism” of the states, which means the growth rate of companies, the number of start-ups, the number of entrepreneurs per capita, the outflow of labor and the labor force participation rate.
New York’s national ranking dropped from 35.9 in 2000 to 23.4 in 2024, while Florida’s national ranking jumped from seventh to fifth.
“Population growth and economic growth feed off each other, so as New York deepened its decline, its relative attractiveness diminished. Florida continues to grow, attracting more workers and capital investment,” Fikri added.
Investing in local education
One of the many people who have recently moved to Florida is Professor David Andolfatto, chairman of the Miami Herbert School of Business at the University of Miami.
Andolfatto moved to Florida in 2022 after working as senior vice president for research at the Federal Reserve Bank of St. Louis and said skills and talent are readily available thanks to the “high caliber” student body at UMiami.
“I don’t think the southeastern United States has the same tradition of academics as the northeast and California, but I see great potential in developing partnerships between the corporate sector and the university. [of Miami],” He said.
“I am very excited about the prospect of our students meeting the needs of new firms. It’s a great influx of talent, but a lot of that talent is being nurtured locally,” Professor Andolfatto added.
And while business schools in Florida are not as common as on the East Coast, that could be changing.
Citadel CEO Ken Griffin, for example, has already invested in the University of Chicago’s economics department and in April made a $9 million donation to make a school-backed math program available to public school students in Miami.
“It would be a good signal if you saw people investing not only in companies but also in institutions,” Fikri said.
“It’s a good signal that places are attracting people not only because of the lower cost of living, but are looking to invest in the place and its future.”
How to Avoid San Francisco’s Doom Spiral
South Florida may want to ensure its moment in the sun doesn’t replicate the problems plaguing rival regions.
San Francisco, for example, has been repeatedly criticized by Tesla CEO Elon Musk, who has said the area is in a “doom spiral,” called it a “disaster,” and compared it to a “deserted zombie apocalypse.”
Musk’s criticism comes as the city’s high violent crime rate, as well as the drug abuse and homelessness crisis, come into play.
Fortune spoke with experts who believed the influx of investment needed to be spread across infrastructure—or, as Professor Andolfatto calls it, “the core.”
“What do people want?” He said. They need a safe and secure environment in which they can raise their families and peace of mind with access to decent healthcare, basic education and affordable housing. These are eternal problems. And then just allow people to take advantage of the opportunities that are given to them and the freedom to choose what they want to do.”
If Florida can increase its investment without increasing inequality, it also has a chance to retain people for the rest of their working lives.
Fikri explained: “The idea of being a place where you don’t just get your first years in the job market and then leave, but a place where you can build an entire career and afford to stay as long as you want would be very attractive. .
“Many people who have left expensive city centers over the last couple of years would have preferred to stay but felt they couldn’t so felt they needed to move.”
Lifestyle, talent and investment are bait for finance and big tech
While Andolfatto’s career goals prompted him to move to Miami, the lifestyle didn’t hurt either.
“I haven’t worn a jacket since I moved here,” he says. Luck. “The weather is beautiful, there are no mango trees, the restaurants are exceptional, your complex has a beach or maybe a pool.”
A combination of lifestyle, talent and investment may allow Miami – and South Florida as a whole – to pick and choose the industries in which it wants to become famous.
“In general, I expect the community to develop both finance and technology. I’m not sure if the resources are currently available here, but I’m confident Miami will have no problem finding the talent needed to develop both. sectors,” Andolfatto added.
These factors are why cities like New York cannot afford to rest on their laurels, as Jamie argues. Dimon recently posted thisalthough New York is still “obviously” the financial center of the world, “no one, in my opinion, has any right to think that he has a divine right to success.”
Speaking this week at the Economic Club of New York, Dimon added: “You’ve seen it in cities, you’ve seen it in governments, you’ve seen it in countries – people are going the wrong way.”
The data shows that New York will already feel the pinch.
An EIG study found that $16.5 billion in taxable income has flown out of Manhattan during the pandemic, and $4.6 billion of that went to Florida.
Florida was the biggest beneficiary of the influx of investment between 2020 and 2021, receiving an additional $39 billion from residents moving from other states.
Fikri concluded: “New York has so many assets that cannot be replicated in any one place—it can afford to lose a few Citadels, but it cannot afford not to learn the lessons from those instances.”