I love former politicians. They learn to fly once their political parties no longer tether them to the ground. In the case of Alex Sink, it’s more like soaring than flying. Ms. Sink is the former CFO of the State of Florida and ran an unsuccessful campaign for governor two years ago. Before politics, she was a banker and a really good one at that. She enjoyed a reputation as someone who truly got to know her clients’ business.
With that as a background, it surprised no one when she founded the Florida NEXT Foundation last year. It’s mission? To “empower young people, entrepreneurs and small businesses so they can drive the innovation needed to enhance Florida’s economy and quality of life”.
I had the pleasure of hosting a luncheon at which Alex was in attendance last week along with my partners at The SCA Group. The attendees included business owners, professionals and executives. It was interesting to watch Alex hold court. Like all great leaders, she listens more than she talks.
We had a far ranging conversation covering education, business incubation and, most of all, how we keep our best talent from relocating to another state.
This last topic was of great interest to one of our guests, Dan Madden. Dan is COO/CIO of Lake Worth based Eastern Metal Supply. He is also a Ph.D. candidate at Nova Southeastern University and is in the process of founding a non-profit of his own. The “95 Research Corridor Alliance” would nurture technology businesses in Southeast Florida.
With everything he is involved with, I wondered why he would make time for this new initiative. “Because I don’t want to have to travel to Texas or California to visit my kids when they graduate from college,” he told me.
Those are two very interesting states when you think of nurturing business. California, of course, is home to Silicon Valley, highly concentrated with venture capitalists and tech entrepreneurs. Texas’ claim to fame in this regard is Austin, home to the University of Texas and a burgeoning tech incubator in its own right.
But, beyond that, the two states are very different. California – the Golden State – has been a center of innovation and cultural leadership for over a century. But, the emphasis here should be on the words “has been”. A recent report of the Federal Reserve Bank of San Francisco concluded, “economies of states ranked high on tax-and-cost indexes [meaning lower taxes and costs]… tended to grow faster than the states ranked lower”.
Meanwhile, low tax and low cost Texas – with its low propensity to provide social services and quality public education – is thriving. Now, before you conclude it’s all because of oil, I’ll tell you that the Dallas Federal Reserve Bank has reported that only 2.4% of Texas employment is in the oil and gas industry. And, Texas’ job growth has been more than triple that of California over the last 20 years.
So, how should Florida respond to Dan Madden’s desire to keep his kids closer to home? Should we become California with its first class public schools and infrastructure? Or Texas with its 19th Century pioneer spirit?
Well, my answer is neither. We shouldn’t pursue job growth so single-mindedly that we sacrifice efforts to improve public education. The workforce of the future will be better educated than past or even current employees or else they’ll be waiting tables.
In other words, the fundamentals of attracting businesses and high content jobs to Florida are low cost and low taxes coupled with a well-educated workforce. In a micro sense, Dan Madden’s 95 Research Corridor Alliance is focused on incubating businesses, especially high technology businesses – info, bio or nano. In the macro sense, Alex Sink’s Florida NEXT is about mixing the right cocktail of entrepreneurial energy, government policy and infrastructure.
Florida is a small business state. In the tri-county area that makes up the Miami metropolis, there are about 3000 businesses with more than $10 Million annual revenue. Of those, only 300 exceed $100 Million.
We keep hearing that small businesses drive job growth and that’s true. But, it’s not universally true. A November report by McKinsey & Company identified the top tier of job creators by industry – heavy construction, social services, industrial instrumentation, chemicals and utilities. So, should Florida focus on attracting those industries? And, how should we take into account the wave of mobile technology that is destroying jobs in airports, publishing and banking? What jobs will be created? What companies will thrive?
Whatever the answers are – and, I don’t think there is only one right answer – the LEADERSHIP provided by both Ms. Sink and Mr. Madden will be critical to our success.