ProBeat: Tech company expansions need to be less arrogant and more transparent

Amazon’s HQ2 beauty contest, which yesterday culminated with the company canceling its New York plans, will be analyzed and disseminated for years. It’s the perfect case study of how not to expand your corporate offices. But Amazon isn’t alone.

The New York cancellation completely dwarfed another tidbit of news yesterday from Google’s parent company Alphabet, which via Sidewalk Labs is testing smart city features in Toronto. The Toronto Star obtained internal documents indicating that Sidewalk Labs “wants a share of the property taxes, development fees, and increased value of city land that would normally go to city coffers.”

Amazon’s HQ2 idea was unique, but it is part of a much bigger trend. As they grow, tech companies are interested in expanding to where their business will benefit most. That’s fine. But their approach leaves a lot to be desired. Like all powerful corporations, they know local and regional governments can be played and swayed.

And while it is true that city officials can be convinced to offer tax breaks and other incentives, their citizens are not so eager. Because tech companies offer popular products and services, they assume that they will be greeted with open arms.

It’s extremely arrogant.

Amazon, Google, and all the other tech giants expect excitement regarding their arrival. And while it is exciting to have a tech giant show interest in your home, it’s your home. And this isn’t a guest — it’s someone who plans to stay permanently. This brings feelings other than just excitement.

Sidewalk Labs should be focused on asking Torontonians what they think their city needs most and figuring out how to offer that. It should be clear about what the tradeoffs will be. Instead, it’s assuming that the technology it brings will be immediately appreciated, and it’s already trying to figure out how to be rewarded. Had Sidewalk Labs been transparent from the start, there would not have been controversial documents to leak.

Amazon’s decision to split its HQ2 into two non-HQs across Queens, New York and Arlington, Virginia was the perfect bait and switch. Yesterday’s news turned it into a train wreck.

And it all could have been prevented. Amazon could have done the work itself: picked a handful of cities for possible expansion and engaged them in a good-faith dialogue.

This kind of economic development, pitting one community against another, is one of the more sickening aspects of latter-day American capitalism. Amazon still managed to kick this abusive competition up several nauseating notches.

— Chris O'Brien (@obrien) February 14, 2019

Unfortunately, if you start a relationship as a good corporate citizen, it’s difficult to get local governments to bend over backwards.

ProBeat is a column in which Emil rants about whatever crosses him that week.