While 218 cities may have lost out on their bid to secure Amazon’s second headquarters (HQ2), some of them are still trying to please the ecommerce giant.
This week, the Wall Street Journalreported that Amazon called roughly 200 of the cities that weren’t included among the 20 finalists to talk about why the company didn’t choose them. And some of those passed over suitors 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 the kinds of things they should consider when trying to build a tech-friendly environment. It’s not enough to provide tax incentives — in addition to having a robust talent pool, cities also need to be seen as an attractive, vibrant place for young professionals to live, while offering 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 tech companies in a particular city. And if the HQ2 rejects aren’t careful, they could end up offering programs that are carbon copies of one another, rather than 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 a burgeoning SaaS hub. Cities should take note of their historical strengths, consider what future tech jobs those align well with, and then 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 quickly in traditional tech hubs like Silicon Valley or Seattle.
A fund to invest more in local tech startups (I’m assuming a venture capital fund, though the Journal story doesn’t explicitly say) sounds like a good idea in theory, but these types of funds can easily fall flat if they don’t have managers with the right expertise, or they 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 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 it would for traditional angel investors.
Amazon may be right to encourage everyone to try harder to fund early-stage startups, but cities need to do more homework to figure out what will work for them — and that requires talking to their own entrepreneurs, not just outsiders like Amazon.
Additionally, Amazon’s track record proves it doesn’t always know what’s best for the city it is currently headquartered in. Yes, Amazon has brought 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 to proactively avoid some of the economic issues that have plagued Seattle.
What Amazon’s input might be good for is getting stakeholders in a community to support economic development initiatives that the city or county has already been pushing for. Khalil Rahal, an official in 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 on the city. Wayne County had already tried to pass an initiative that would assist with the creation of such a network in 2016, but that effort failed. Now, Wayne County has a prominent piece of anecdotal evidence to tout when others in the county question the need to invest more in public transportation.
In sum, if you’re the leader of a city passed over for HQ2, 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 growing 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 to attract HQ2, but you can get right to work building the next Amazon.