Two hundred and eighteen cities may have lost out on their bid to secure Amazon’s second headquarters, but they’re not done trying to please the ecommerce giant.
This week, the Wall Street Journal reported that Amazon has made calls to roughly 200 of the cities who didn’t make the list of the final 20 cities, about why the company didn’t chose them. And some of them are reportedly already acting on Amazon’s desires. From the Journal:
Cincinnati and Sacramento, Calif., are restructuring workforce development programs to focus on tech talent. Orlando, Fla., is considering starting a community fund to invest in local tech companies and draw more entrepreneurs. In Detroit, elected officials and business leaders are pushing a ballot initiative for a new regional transportation network that would connect outer counties to the city.
Amazon’s HQ2 RFP gave cities a great overview of what kind of things they should be thinking about when trying to build an environment that’s friendly for tech companies. It’s not enough to provide tax incentives — cities also need to have a robust talent pool, be an attractive, vibrant place to live for young professionals, while also offer reasonable home prices and good education systems that will appeal to senior executives with families.
However, what’s good for Amazon might not always be good for other companies in the city. And if the HQ2 rejects aren’t careful, they might end up offering programs that are carbon copies of one another, and aren’t tailored to the unique characteristics of their own communities.
Let’s start with the idea that cities need to structure workforce development programs to focus more on local tech talent. What kind of tech talent? A city that’s home to a strong advanced manufacturing sector is going to need different types of tech talent then one that’s home to a burgeoning SaaS hub. Cities should take note of what kind of historical strengths they have, what jobs of the future those historical strengths might align well with, and double down on areas where they are seeing the most job growth. For example, a February analysis from Quartz found that the Midwest is home to a burgeoning number of mid-tech jobs — those that don’t require a college degree, while those types of jobs aren’t growing as much in traditional tech hubs like Silicon Valley or Seattle.
While a fund (I’m assuming a venture capital fund, though the Journal story doesn’t explicitly say) to invest more in local tech startups sounds like a good idea in theory, these types of funds can easily fall flat if they don’t have fund managers with the right expertise, or aren’t tailored to the needs of the city’s startups. One Cleveland entrepreneur, in sharing his assessment of his city’s startup scene with VentureBeat, noted that even though the state of Ohio has a number of state-funded programs that invest in early-stage startups, the capital can be difficult to access because it takes longer for the state-funded programs to do due diligence and interview people than traditional angel investors.
Amazon may be right in encouraging cities to do more to fund early-stage startups, but cities need to do more homework on their own to figure out what will work for them — and that requires talking to their own entrepreneurs, not just Amazon.
Additionally, Amazon has proven that it doesn’t always know what’s best for the own city it is currently headquartered in. Yes, Amazon has helped add more high-paying tech jobs to Seattle — the company employed roughly 5,000 employees in Seattle in 2010, and now employs more than 40,000, making it the largest employer in the city. But many in Seattle blame Amazon for driving up housing prices, and in turn worsening the city’s homelessness crisis. Now, according to the New York Times, Amazon representatives are speaking with HQ2 finalists about how they could be proactive about curtailing some of the economic issues that have plagued Seattle as the company continues to grow.
What Amazon’s input might be good for is getting other stakeholders in community on board for economic development initiatives that the city or county has already been pushing for. Khalil Rahal, an official with Wayne County, where Detroit is located, told the Journal that the lack of a regional public transportation network was one of the reasons Amazon said it passed over Detroit. Wayne County had previously tried to pass an initiative that would assist with the creation of such a network in 2016, but it failed. Now, Wayne County has a prominent piece of anecdotal evidence to tout when others in the county might question why they should invest more in public transportation.
In sum, the leaders of HQ2 reject cities should think of Amazon’s feedback as a starting point. Talk frequently with the startup founders and CEOs in your community about what their biggest talent needs are. Take note of exacerbating housing problems in tech hubs like San Francisco and Seattle, and remember that bringing in more tech jobs won’t solve all of your city’s economic woes. It may be too late for these cities to attract Amazon, but they can build the next Amazon.
