Miami Is Now Number Two for Startup Activity
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So long, San Jose. According to the latest startup rankings from the Annual Kauffman Foundation Report, Miami has overtaken the California city in startup activity. San Jose fell from number one in 2014 to number three this year. Formerly the bronze medalist, Miami moves up to second place, while Austin, Texas, takes the top spot. San Francisco is also down one spot from last year to sixth. Denver and Los Angeles round out the top five.
However, we should explain that the Kauffman Report has nothing to do with tech per se, despite "startup" being something of a techy buzzword. The report defines a startup as any firm launched in the past year that employs one person in addition to the owner.
So this doesn't signal the arrival of South Florida as some sort of actual tech hub. It's just that we have a lot of entrepreneurs here.
The report found there was a 0.52 percent rate of growth in new entrepreneurs over the past year. In 2014, the rate was 0.49. However, compared to other cities in the top ten, it appears many Miamians started their own firms because they may have had fewer opportunities.
The Kauffman Report also uses a measure known as the "opportunity index." That's a measure of startup owners who were previously employed elsewhere before starting their new firm and an indicator of how strong the economic and startup scene is in the city if entrepreneurs are willing to give up their previous jobs to strike out on their own.
In Miami, that rate was only 73.9 percent. It's the second lowest in the top ten. San Jose's, by comparison, was 91.2 percent.
On the flip side, Miami does have the highest concentration of startups by population of the entire 40-city list. Our startup density was 247.6, which means there were that many startup businesses over the past year for every 100,000 residents. No other city's startup density was greater than 200.