Miami: Is there any magic left?

BY RILEY KINSER & SITAN ZHANG - 07 SEPT 2021

                                       

                                   

Miami got its nickname, “The Magic City”, from its rapid population growth over the past few decades which practically made it a city overnight. This was noticed by winter visitors who remarked that the city grew so much so quickly that it was like magic.

During the pandemic, The Magic City has taken on a whole new meaning, as Miami is now billing itself as the Next Great Tech Hub. There is certainly great diversity to Miami’s population; they boast strong Hispanic and Asian communities, and tech workers are no exception. By our estimates 31% of tech workers in Miami are Hispanic. A population like this cannot be found in any other major tech hub.

However, that is where the magic ends.

The reality is, Miami’s tech (specifically software engineering) population is stagnant, growing just a meager 0.6% in the last 12 months (LTM) ending April 2021 according to our data. In comparison, Seattle and Vancouver both grew more than 7% over the same period and a host of other much larger tech hubs who experienced 1% or more in growth. While these other cities grew, Miami’s stagnant headcount is aligned with our data showing software engineering talent moving to Seattle (7.4%), Austin (6.2%), Atlanta (2.3%), Denver (6.3%), or Silicon Valley (3%) in the past year according to our data.



Population growth is made up of two large components - younger/older people entering/exiting the workforce and transitory employees flowing into and out of the workforce. A deepdive on the inflow/outflow of talent in Miami showed that while Miami did experience a slight net-inflow from New York (12% of all inflows into Miami are from New York) and Washington D.C (6.3%), these by no means offset the greater outflow of people into other cities. Our data indicates an exit of 1.15 people into other cities like New York, Orlando and Atlanta for every 1 person flowing into the Miami workforce.

A deep dive into the numbers at Miami’s top tech employers also show that the city is not growing its tech talent. Citrix, Miami’s largest employer of software engineers, grew only at 3.1% LTM. Ultimate Software, the 2nd largest employer saw a 34.1% decline in LTM headcount. The weighted average LTM growth for the top 60 employers in Miami was only 0.2%. In contrast, more established tech hubs like Seattle’s largest tech employers Microsoft and Amazon saw headcount growth of 7.2%/10.3% over the LTM respectively. Even other up-and-coming tech hubs like Denver saw growth of 8.2%/6.7% from its largest tech employers (Lockheed Martin, Charter Communications). These Miami statistics do not indicate a strong tech presence, nor does it display the groundwork for a new tech hub. Over the last year during the pandemic, Miami did not experience a tech renaissance, and there is no indication such an event is imminent.


While many prominent investors and entrepreneurs in tech have already moved or declared intentions to move, the numbers do not add up. Overall Miami experienced a small net outflow during the pandemic. The largest net inflow to Miami is New York City—no surprise considering the long history of population movement between the two states. However, Seattle and Austin both drained from Miami enough to offset these moves. Overall, there is no significant trend in the data, running counter to the popular belief that tech workers from all over are coming to Miami and staying for the lifestyle and cost-of-living advantages.

The Magic City is still as it was before the pandemic. Warm, friendly, and culturally diverse. However, looking behind the curtain reveals the illusion portrayed in the media regarding Miami’s tech scene. It is not the next Silicon Valley and maybe far from reaching that goal. It may happen in time, but that time is not now.

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