By Stephany Rojo

The Miami-Dade County has a budget of $7.4 billion[1] for fiscal year 2017-2018. It includes four main strategic areas of concentration, including economic development. Of the allocated monies, only 3 cents of every dollar[2] goes toward economic development. The efforts are important because they tend to cater to marginalized communities like minority business owners. Therefore, it would be prudent for the County to look into giving these small business owners a fair shot at success by investing an appropriate amount of resources.

The Kauffman Index found Miami was the metropolitan area with the highest level of startup activity[3] in the nation. At the same time, we know that Miami-Dade County has a significant minority population based on statistics from the U.S Census Bureau[4]. In fact, it is a place where 51.7% of the population was born in a foreign country. Minorities tend to deal with unique challenges for the very nature of beingimmigrants[5] and others for being part of traditionally disenfranchised communities. The County has the following demographics: 67.7% Hispanic, 18.5% African American, 13.8% White (not from Hispanic origin), 1.5% Asian, 1.2% Two or more races, and American Indian 0.3%. According to statistics, only 26.9% of people hold bachelor’s degrees or higher in Miami-Dade.

Minorities often[6] start a business as a way of improving their current situation. Indeed, this can be attributed to the fact that some may be “locked out of traditional jobs due to the lack of access to social capital, poor educational systems, broken transportation systems and/or systemic racism, these entrepreneurs create businesses out of necessity”, as Melissa Bradley[7] from the Kogod School of Business, American University explains. Further, minority small business owners tend to have a harder time accessing capital because of historical circumstances like red lining[8] and other systemic realities[9] affecting many people of color and women. This can result in not qualifying for a bank loan or line of credit.

From the context discussed above, it shouldn’t be surprising that even though Miami is doing very well in startup and small business activity in general, the businesses are not scaling. Arnobio Morelix from the Kauffman Foundation says that “when we look at how firms grow after they start, we don’t see Miami doing very well.” The 2016 Kauffman Index of Growth Entrepreneurship[10] actually ranks Miami in the 39th place from 40 metro areas in the country. It is self-evident business owners in the County need access to education programs that will give them the tools they need to succeed, but also access to the capital that traditional lending institutions are not giving them to create healthy enterprises that will prosper in the long run.

The Miami-Dade County budget, within the strategic area of economic development, clearly states the growth of entrepreneurial development opportunities in Miami-Dade County is an important goal. In fact, one of the objectives of the budget is the creation of new small businesses. Again, this is particularly important because we know Miami is doing well in that respect, but we need to concern ourselves with the reality that these businesses are not scaling. We need to tackle the issue if we want Miami businesses to have a good chance at growing after they start. After all, sustainable healthy enterprises in the long run are the ones that will catalyze socio-economic growth in the lives of entrepreneurs, their families, and communities by building assets and creating quality economic opportunities.

As a County, most of us are aware that we are composed of minorities. Therefore, we need to bring the struggles faced by minorities to the front and center of the discussion if we are to implement solutions. The struggles they face trickle down to all other aspects of their lives, including small business and entrepreneurship opportunities. We settled that many minorities tend to create small businesses out of necessity. Therefore, our concern as a County should not simply be the aspiration of being named ‘the metropolitan city for startups’. Again, many of these startups are surfacing based on need and the desire for finding a better life. Let’s honor this and make sure we are giving the right tools for these small business owners to start, grow, and expand their businesses. The Miami-Dade County should invest or affiliate itself in projects that educate entrepreneurs and harvest collaboration like Goldman Sachs 10,000 Small Businesses, StartUp FIU, WIN Lab, Prospera, and Branches. At the same time, it should preoccupy itself in making sure the entrepreneurs have access to capital to bring their ideas into scalable fruition through community lenders and microfinance institutions when banks cannot or are not willing to lend. These efforts bring the promise of job creation, building a thriving local economy, and a resilient small business community.

 

Sources:

[1] CBS Miami (2017). Miami-Dade Mayor Announces Proposed Budget For 2017-18.miami.cbslocal.com/2017/07/11/miami-dade-county-proposed-budget/

[2] Miami Dade County (2017). Budget in Brief. http://www.miamidade.gov/budget/library/fy2017-18/proposed/budget-in-brief.pdf. (p. 11).

[3] Startup Activity (2017). http://www.kauffman.org/kauffman-index/reporting/startup-activity.

[4] U.S Census Bureau. QuickFacts: Miami-Dade County, Florida (V 2016). https://www.census.gov/quickfacts/fact/table/miamidadecountyflorida/POP060210.

[5] Bailey, Sarah (2016). The so Called American Dream. The Migrant Crisis. https://scholarblogs.emory.edu/themigrantcrisis/2016/09/21/the-so-called-american-dream.

[6] Ecarious, Daniel L (1994). The “Black Economic Self-Help” Solution: Advancing a Practicable Approach to Community Economic Development. Penn Law: Legal Scholarship Repository.http://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=1024&context=jlasc.

[7] Bradley, Melissa (2016). Kauffman Foundation. http://www.kauffman.org/blogs/growthology/2016/02/investing-in-minority-entrepreneurs-an-economic-imperative-for-the-us.

[8] Domonoske, Camila (2016). Interactive Redlining Map Zooms In On America’s History Of Discrimination. The Two Way: NPR. http://www.npr.org/sections/thetwo-way/2016/10/19/498536077/interactive-redlining-map-zooms-in-on-americas-history-of-discrimination.

[9] Barr, Michael (2015). Minority and Women Entrepreneurs: Building Capital, Networks, and Skills. The Hamilton Project. https://www.brookings.edu/wp-content/uploads/2016/07/minority_women_entrepreneurs_building_skills_barr.pdf.

[10] The Kauffman Index: Entrepreneurship Series. Kauffman Foundation. http://www.kauffman.org/kauffman-index.