How is South Florida like Venice?

How is South Florida in 2012 like Venice in the 13^th century?

No, it’s not because of all the flooding on our beaches this season.  According to Kaufman, Rossin founding partner and CEO Jim Kaufman, the growing economic disparity we’re facing reminds him of the rise and fall of the Venetian Republic. This economic  trend  – and its consequences – was one of three that Kaufman highlighted in his 2012 year-end, all-staff seminar,  as Kaufman Rossin reached its 50^th anniversary.

Kaufman, Rossin is a proud member of Praxity, an international alliance of independent accounting firms. At the Praxity Global Conference in Vancouver last month, economist Dr. David Green identified three major upheavals that helped shape the current world economy and will have ramifications into the future: world poverty is in decline, economic disparity is growing, and education is undergoing an extraordinary upheaval.  Kaufman shared his reflections on the three revolutions.

World Poverty

First, world poverty is in decline. The Industrial Revolution brought prosperity to the West, but it wasn’t until about 20 years ago that developing nations finally started to see a decrease in poverty. Globalization has led to an increase in offshoring as more and more companies distribute manufacturing and processing of goods to third-world countries that offer infrastructure and cheap labor. It’s now common for components to cross borders several times before a product is completely assembled.

While outsourcing has been a boon for developing countries, it has led to weakening job growth and a flagging middle class in countries like the U.S.

Economic Disparity

Second, economic disparity has grown wider. The rich are getting richer, the poor are getting poorer and the middle class is languishing adrift. In the last 10 years, the average American middle class family has seen an income decrease of $3,800 in constant dollars. The top 1% now earns 18% of total available income.

The rise and fall of the Venetian Republic  illustrates the benefits of an open society and the dangers of highly concentrated political and economic power.Venice flourished as the mecca of world commerce in the 11^th and 12^th centuries. The Byzantine emperor granted Venice access to major trade routes and property rights, which created opportunities for its citizens and an influx of wealth. This incredibly inventive mercantile society, similar in many ways to our innovative entrepreneurial culture, produced the world’s first banks, debt markets and limited liability companies (LLCs).

But they got greedy. Toward the end of the 13^th century, the Venetians began passing repressive laws to shut out everyone but the wealthy from trade. Similar to the present-day Occupy movement, Venice saw revolts from an energized, polarized populace as a result of social and economic inequality. The elites’ power grab ultimately brought the downfall of the empire.

Education

The last social revolution Kaufman discussed in his seminar is the evolution of education.  In his view, this revolution is a powerful, positive global force.

The global adult literacy rate has climbed from 76% in 1990 to 84% in 2010, according to the UNESCO Institute for Statistics. Global literacy is projected to continue to increase, thanks in large part to the prevalence of technology. However, although education is more widely available and the cost to offer it has gone down, the price for students has actually gone up. Way up. Student debt is now approaching $1 trillion for U.S. colleges.   Like many others, Kaufman believes that technology may offer the solution.

“People drive the train, but technology lays the track,” he said. “And we’re going to drive it into the future.”

Sal Khan, founder of the nonprofit online school Khan Academy, is reinventing education with 3,400 instructional videos, plus interactive quizzes, and tracking tools that are available to anyone, anywhere, for free. Khan Academy has quickly become the largest school in the world, with more than 10 million students. And he’s not the only one doing it. Massive open online courses (MOOCs) have emerged on a number of sites, including Coursera, Udemy and iTunesU. Many elite universities are now offering free courses directly through their websites, including Stanford, MIT, Harvard and Yale.

Kaufman, Rossin, is also committed to a lifetime of learning. Andrew Phillips, leader of Kaufman, Rossin University, is continually developing new classes, identifying new instructors, and seeking new ways for our employees to learn – both online and in person.

The Future at 50

In December, the firm celebrated its 50^th anniversary with what one client termed “a splendid party.” Hundreds of guests enjoyed live bands, endless food, open bars and bustling dance floors while making new connections and renewing old relationships with fellow employees, clients and friends.

As we move into our second half-century, Kaufman, Rossin is determined to foster the education revolution and, through support to innovative businesses and individuals across South Florida, to keep our entrepreneurial community – unlike 13th century Venice – open to all who seek to succeed.