International business location advantages in South Florida

International Business in South Florida

Premise and Conclusion

The location of any business entity, but especially one engaged in international commerce, is a complex and critical pre-condition for serving customers, providing a nurturing and productive environment for employees, and achieving profitable operations. Of the many factors management must consider, the following are generally thought to be the most influential: access to capital, favorable tax advantages, excellent transportation and technological infrastructure, and a skilled multilingual and multicultural workforce. (web eFlorida 2010)

South Florida, comprising Miami-Dade, Broward, and Palm Beach counties, does not present a perfect record on any of the success factors, but a close examination of the efforts made and the resulting accomplishments leads to a favorable recommendation for the formation or expansion of international business functions in the region.

Access to Capital

Depending on the stage of company development, a business may need venture capital, commercial bank lenders, or access to government programs to fuel its growth. While Florida does not match the supportive start-up environments of Silicon Valley in northern California or the Route 128 corridor in Massachusetts, its capital-formation infrastructure appears to be adequate to match existing needs.

Venture Capital (VC): Venture capital investment in Florida companies is boosted by a number of initiatives, such as the Florida Opportunity Fund, the Institute for the Commercialization of Public Research, and Enterprise Florida, Inc. (a public-private partnership devoted to statewide economic development.) EFI's stated mission is: "to diversify Florida's economy and to create better-paying jobs for its citizens by supporting, attracting and helping to create businesses in innovative, high-growth industries." (web eFlorida 2010) Enterprise Florida provides services to businesses that are interested in Florida as a base to expand into the international marketplace. EFI helps by:

Offering export counseling and advice, making available on the eflorida.com website quarterly analyses of international trade trends and detailed import/export reports, organizing and executing overseas trade missions and shows, supplying trade leads through an online database, assisting Florida companies in marketing their products and services overseas, and offering financial assistance for export transactions to small- and medium-sized Florida companies. (web eFlorida 2010)

According to eFlorida's web site, some 36 private angel investors and venture capital firms are operating in Florida. More than 750 venture capital deals have closed in the state since 2000, resulting in nearly $6.3 billion in total venture capital spending. (web eFlorida 2010)

Lenders: The Florida International Bankers Association web site reveals that "Florida is home to more than 300 commercial banks with $325 billion in deposits, and nearly 50 savings institutions with $54 billion in deposits." (web FIBA 2010) International financial institutions in the state, including foreign banks and Edge Act corporations (U.S. institutions with a special charter from the Federal Reserve to conduct international banking operations,) support local companies in the conduct of international trade by issuing letters of credit, providing currency exchange, and making trade-related loans. (web FIBA 2010)

Government Programs: While the Florida government does not give away free money for starting or expanding businesses, programs are available that provide businesses with some financial aid. The most notable and successful is the Enterprise Bond Program which offers tax-exempt, low-interest bond financing to financially sound manufacturing organizations through Florida Development Finance Corporation, a state authorized issuer of industrial revenue bonds. (web eFlorida 2010)

Tax Advantages

Florida has preserved a stable and business-friendly tax climate in good times and bad. The state legislature has consistently passed laws ensuring that Florida remains a worldwide hub for new and expanding businesses. Florida has low corporate tax rates and no personal income tax. The state also administers a wide variety of incentives to attract high-impact businesses. (web eFlorida 2010)

Workforce Talent

The knowledge economy demands a highly educated and skilled employee base. As presented by eFlorida, Florida's labor force is the fourth largest in the United States with 9.2 million workers: (web eFlorida 2010)

Florida's labor market is particularly strong in high value-added businesses, including high-tech industries and international trade. Ranked 4th in the nation for high tech employment by TechAmerica's Cyberstates report, Florida boasts more than 292,000 high-tech workers. The talent pool is also deep in workers with advanced degrees. South Florida is home to Florida International University, University of Miami, and the University of South Florida.

Florida's workforce is one of the most diverse in the nation, both culturally and linguistically. Nearly 3.5 million residents were born outside the United States, and many speak one or more of over 90 languages. Florida has a particularly strong representation of Spanish, French, and Portuguese speakers.

Florida is one of only ten states with a right-to-work provision in the state constitution. Florida also has one of the lowest unionization rates in the country at about 5.8%, and the second lowest unionization rate in manufacturing at 2.5%. (2010)

Finally, Florida is currently a leader in international trade and investment. eFlorida.com asserts that "the total value of trade flowing in and out of Florida has nearly doubled in the last decade, reaching $103 billion in 2009. Total foreign direct investment (FDI) amounts to $33.6 billion, making Florida one of the top states for FDI and related employment." (web 2010)

A recent (2008) study conducted by the Beacon Council and WorldCity Business tallies nearly 1,200 multinational companies, 41 of them billion-dollar companies, collectively managing over $200 billion in revenue from their bases in South Florida. "While companies from Europe and the United States have long seen Miami as the gateway to the Americas, the data show that a large number of multinational companies originated elsewhere." The study found 27 companies from Canada, 116 from Latin America and the Caribbean and 76 from Asia. Europe accounts for 305 companies while the United States for 659. (web South Florida Global Economic Impact Study, 2008)

The evidence is undeniable. For all the incentives and public-private efforts, or perhaps just for the year-round sunshine, businesses have flocked to south Florida to conduct international commerce. There is good reason to expect that the long-term future is bright.