Wednesday, August 15, 2018
Business

The big change: Can Florida grow internally, rely less on newcomers?

One of the deans of the Florida economy held court Friday, forecasting a slowly improving business scene while predicting the Sunshine State will enter an era based more on internal growth and less on recruiting new people from afar.

"In the 1970s, Florida had very few Fortune 500 companies," said Mark Vitner, Wells Fargo senior economist in Charlotte, N.C., who has analyzed Florida ever since the 1980s as a junior economist at Barnett Banks in Jacksonville.

"Now we have many more sizable businesses headquartered or operating in Florida. So more growth should be starting to happen internally here," Vitner said in a 90-minute conference call dedicated to Florida's economic outlook.

One of those internal growth engines in Florida is the life sciences cluster. The industry got its substantive start here when former Gov. Jeb Bush assembled half a billion dollars and secretly recruited California biotech giant Scripps Research to open a research facility on Florida's east coast.

That bold (and expensive) act sparked other big-name biotech organizations — from the Max Planck Institute and Torrey Pines Institute for Molecular Studies to Sanford Burnham Medical Research Institute — to expand to Florida.

All that life science activity and the huge recruitment sums have generated few new jobs, Vitner concedes. But he thinks that will soon change. He credits the high caliber of the biotech organizations here for reaching a tipping point that will produce new and better-paying jobs. Internally.

"Life sciences is what everybody's shooting for, and there is a lot of hype," Vitner said.

"It is real in Florida."

If Florida can grow more internally, the state may one day be able to shuck its unfortunate nickname: the Ponzi State. The state was so dubbed for its historical dependence on the wealth of newly arriving people to sustain the costs of the ones already here. "Ponzi State" headlined a 2009 New Yorker magazine story by George Packer (who credits USF history professor Gary Mormino for the Ponzi reference).

The state missed an earlier opportunity to grow internally in the 1980s when IBM developed the personal computer in Boca Raton. Rather than leverage that event, Florida ignored the possibilities and lost them.

Now Florida is fighting to save some of the engineering skills on its Space Coast, as NASA shrinks and private sector space businesses emerge. While the role of Florida in the future space business remains unclear, Vitner says the state is doing all it can.

The economist also identified geographic winners and losers in the coming recovery. Cities like Sebastian (on the East Coast), Naples, Tampa and Miami are on the mend, while Punta Gorda, Daytona and Pensacola are laggards.

Vitner likes what he sees in coastal southwest Florida. When the housing bubble sent area home prices soaring, Midwesterners who had served as prime buyers for that part of the state got priced out of the market.

Not anymore.

"Some people recognize Florida is a bargain again," Vitner says. People are buying housing here and can even do so now without the need to sell their own homes.

So what is Florida's biggest change ahead? Responds Vitner: "We will be less dependent on growth itself."

Contact Robert Trigaux at [email protected]

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