On Wednesday Claure and Suarez announced that SoftBank will invest $100 million in Miami-based startups. The mayor says the new fund is part of his plan to improve the lives of all Miamians, a quarter of whom live below the poverty line. “I don’t know another way to try to deal with income inequality than actually having entrepreneurs and inventors creating the kind of jobs that allow your residents to be successful and provide for their families,” Suarez told WIRED on Thursday.Suarez is, of course, not the first mayor to imagine this future. As Silicon Valley emerged as the country’s preeminent destination for talent and capital, dozens of American cities have tried to replicate its success, down to the aspirational nicknames: There’s Silicon Beach (Los Angeles), Silicon Forest (Portland, Oregon), Silicon Hills (Austin), Silicon Basin (Columbus, Ohio), and Silicon Slopes (Salt Lake City). Politicians have courted the tech industry with tax breaks and elaborate marketing campaigns , hoping that it brings new jobs, vast amounts of wealth, and a burnished reputation. But despite these efforts, the technology industry has remained remarkably concentrated in a few select cities. A Brookings report from December 2019 found that just five metro areas—three of them in California—accounted for more than 90 percent of the growth in “innovation” sectors.
Miami’s tech scene has been on the rise for years, but hasn’t come close to becoming a power player. Cities with fast-growing technology sectors tend to have a few things in common: They have high-caliber universities that produce talented engineers; they have strong economies with business-friendly regulations; and they have a few larger tech companies headquartered nearby. Bill Gurley, the venture capitalist, recently suggested that to develop a tech ecosystem, a city needs at least “three independent public companies north of $10 billion market cap that were founded in the region.” South Florida has only one: Chewy.com, the pet food delivery company, based in Dania Beach. (It was acquired by PetSmart in 2017 for $3.35 billion.) Unlike Austin or Boston or Raleigh, Miami doesn’t have top-tier universities feeding it star talent. And while a growing number of venture capitalists have moved to Miami, it’s not clear how many of them are reinvesting in the local startup scene. Last year, less than 1 percent of venture dollars landed there, according to Pitchbook data. Miami is the seventh largest metro area in the US in terms of population, but it didn't even crack the top 10 for VC activity. In a 2019 survey by the Miami Downtown Development Authority, local founders said that securing funding and finding talent were the two biggest challenges of operating a business in the city.