In a recent post in Marginal Revolution Tyler Cowen states:
"Some economic sectors are distributed everywhere, like every city has its dentist[s], and other sectors are quite clustered. Banking is pretty clustered — New York, London, Hong Kong. Tech has been evolving in a pretty clustered way; I don’t mean simple software support, which is more like dentistry, but big, grand projects — the next Google, the next Facebook, Uber. We see those come out of quite a small number of places, so Skype coming from Estonia is quite the exception. Even then, it was improved by people in the clusters.
I think any location, not just Canada, has to ask itself, ‘are we going to be one of those clusters or not’? And the correct answer may be ‘no’. It may also be the sector evolves so it’s less clustered and more like dentistry, and then everywhere including Canada would partake. But maybe the future is Canada will have a knowledge sector doing small-scale things like software design for local projects but not anything like its own Silicon Valley. I guess at this point that seems likely — that Canada will not be a huge innovative part of the knowledge economy."
While the Internet Age floats all boats and the standard of living improves in most U.S. cities, not all cities will be centers of entrepreneurship. Critical mass is important, but some comparative advantage is also required to create an entrepreneurship cluster. It is the failure to focus on developing comparative advantage which will undermine the popular entrepreneurship efforts in many cities.
Where can Miami find comparative advantage:
- Medical and healthcare (the number of promising early stage companies is much greater than most people realize and we have two medical schools as resources)
- Environmental science (a very dispersed market with no leading city; Miami has Rosenstiel and the FIU Engineering College where a lot of research on the subject is being done)
Such a targeted view looks a lot like the "investment thesis" approach of many VCs. Must be a coincidence :)