Florida’s economy, although robust, depends heavily on tourism, real estate development and financial industries.
As Florida’s economy rebounded from the Great Recession a few years ago, employment in low-paying industries such as tourism has grown at a faster rate than employment growth in higher-paying industries.
While any employment growth is good, we must be careful not to build our economy on the backs of Floridians with lower-paying jobs.
Florida officials continue to look for ways to stimulate economic growth and development and diversify the state’s economy. This has been made more challenging with the recent reduction in economic development incentive funding that, for years, was used to attract businesses to Florida and to create new higher-paying jobs.
As a result, the focus has shifted from attracting new businesses to Florida to growing existing Florida businesses from within. This is important since, overall, business and job growth in Florida is occurring in small businesses, those with fewer than 100 employees.
Given the decision to grow Florida’s economy from within, two existing programs have proven themselves worthy of the continued investment of state funds.
The first is GrowFL, which works with “second-stage” companies to help them connect with resources that will allow them to make better strategic decisions and have a larger positive impact on our economy. A second-stage company is a company that has survived the start-up phase and is now focused on growth, expansion and creating new jobs.
Growing second-stage companies will be critical going forward because they are now responsible for more than 30 percent of Florida jobs and more than one-third of Florida’s sales.
Over the next decade, GrowFL is projected to create more than 43,000 high-paying jobs and generate more than $4.6 billion in additional personal income for Floridians.
One would think the absence of a personal income tax, affordable land and labor, streamlined permitting processes and a host of other pro-business tax policies and resources would attract manufacturing companies to Florida in droves, but they don’t.
Despite a business climate that is consistently ranked among the best in the U.S., manufacturing in Florida accounts for just over 5 percent of the total output in the state (gross state product) and employs just over 4 percent of the workforce.
This ranks Florida 45th among the 50 states and District of Columbia in terms of manufacturing’s contribution to the gross state product.
This is why programs like FloridaMakes, a statewide public-private partnership designed to improve the productivity and technological performance of Florida manufacturers, is so vital to growing our manufacturing sector. FloridaMakes functions as a network of statewide business associations and local providers to help small and medium-sized manufacturers grow their businesses through technology adoption and talent development.
FloridaMakes provides business advisors who work with client companies to assess their businesses, benchmark excellence and value and identify opportunities and challenges for each client.
The more than 100 manufacturers who have received services through FloridaMakes reported a combined total impact of $248 million.
This breaks down to $166 million in increased or retained sales, $25.5 million in cost savings, and $56.6 million in investments. More than 2,400 high-paying jobs have either been created or retained as a result of FloridaMakes.
The Florida Legislature has made clear its preference to grow Florida’s economy from within.
If growing Florida’s economy from within is going to be the linchpin of our economic development program, then a continued public investment in programs like GrowFL and FloridaMakes would be a wise investment indeed.
Dominic Calabro is president and CEO of Florida TaxWatch. He appears courtesy of FloridaPolitics.com.