One of the predominant migration trends that has been accelerated by the COVID-19 pandemic is the rise of new financial and technological hubs. Startups and established companies alike have sought refuge in states with lower costs, favorable business legislation, and an increasingly highly-skilled workforce. In tandem, high earning professionals and their families have pooled together in lesser-known metropolitan centers across the country, either due to their company’s relocation or a newly-minted freedom to work remotely in a location with lower cost-of-living.
This influx of capital and its ripple effects present exciting opportunities for the future of these cities. In this post, we’ll take a closer look at two cities which have frequently been dubbed “new Silicon Valleys” - Austin, Texas, and Miami, Florida.
The “Silicon” moniker isn’t new for Austin - it has technically been something of a “tech hub” since the 80s - with some even dubbing it “Silicon Hills.” Dell Computers was founded in Austin, and the city has always attracted its share of newcomers with its music and culinary scenes. Recently, however, that growth has exploded. Austin grew 30% between 2010 and 2019 - the largest such growth of any major metropolitan area in the country.
The boom is new for Miami, however. While it has always been known as a metropolis providing a commercial and physical gateway to Central and South America, only recently has it experienced the surge of technological, financial, and creative capital that it has seen in the past 3-5 years. Fueled by lower cost of living, its tropical climate, and recently enacted business-friendly legislation, the influx into Florida has been rapid, as we previously discussed in our blog post, Miami Migration Trends: Who’s Moving to Miami, and Why?
California is a unique draw in the global landscape. It has always attracted - and will continue to attract - companies and individuals of all types with its one-of-a-kind cultural significance, its economic strength and stability, socially-responsible legislation, and the overall “California lifestyle.” Even with the rise of these new hubs, California still dominates when it comes to committed capital - and that’s not likely to change anytime soon.
The above notwithstanding, Californians and California-based companies make up a massive contingent of the recent influx into these new economic centers. From an economic standpoint, it’s not hard to see why. It boasts the third most expensive cost of living in the U.S. as well as the second highest median home price. California has some of the strictest labor laws in the country, and high business as well as personal income taxes. Many businesses and individuals without a compelling prerogative to be in the state are beginning to see the above as an unnecessary premium to existing there - and with pastures becoming greener elsewhere, it’s beginning to make more and more sense for them to make the move.
According to data from the Federal Reserve Bank, California cities accounted for three of the top 6 origin cities for new Austin residents during the pandemic, and four of the top 10. Los Angeles County and the Bay Area topped the list. “Probably 5 out of 10 of my clients are Californians, and [my colleagues] could say the same thing,” said Susan Horton, President of the Austin Board of Realtors. The net population loss by California to Texas overall during the pandemic was double the pace of the past decade.
While Miami’s overall new migrant population was driven in greater part by migrants from places like New York and Chicago, the California-to-Florida pipeline still ranked third in state-to-state moving patterns during the pandemic.
Business-friendly legislation, good climates, and young creative talent pools are drawing businesses big and small from across the country to Austin and Miami.
Here are some highlights from the Austin area:
According to a report from trade group CompTIA, Florida added more tech companies in 2021 than any other state. It has also seen a meteoric rise as a hub for financial, cryptocurrency and blockchain companies. Here are some highlights from the Miami area:
Another angle fueling the tech and financial renaissance of Miami is its gradual transformation into the nation’s crypto capital. Led in part by Miami mayor Francis Suarez, Miami has been on the forefront of municipal crypto adoption - including even going so far as to launch its own municipal digital currency, dubbed “MiamiCoin.” The city even has its own crypto task force, the Miami-Dade County Cryptocurrency Task Force, comprising municipal stakeholders, designed to research and enact crypto legislation to benefit local residents.
Miami has already attracted its share of notable crypto projects and companies, such as:
To anyone paying attention, the recent influx is no surprise as both cities have made efforts to make themselves attractive for businesses and individuals alike. “Capital goes where it is welcome, and stays where it's well treated” were words spoken by the late Walter Wriston, chairman and CEO of Citicorp. Both Florida and Texas have made major efforts to create an economic environment that rewards businesses placing their faith by choosing to relocate to their cities, and they are bearing the fruits of those efforts.
While neither city is likely to approach the breaktaking scope and scale which led to Silicon Valley becoming the force that it is today, Austin and Miami are guaranteed to play a massive role in shaping the future of culture, finance, and technology for years to come. Fund.me moved our headquarters to Miami from Orange County, CA in late 2021, and we’ve seen firsthand the signs of an exciting future here in South Florida.