From labor disputes cases to labor and employment publications, for your research, you’ll find solutions on Bloomberg Law®. Protect your clients by developing strategies based on Litigation...
By Alex Ebert
Amazon.com Inc. is telling contender cities for its second headquarters that a consistent factor held them all back: a lack of local tech talent the company needs to fuel it’s $5-billion, 50,000-worker expansion.
Representatives from heavy-hitters like Detroit, Cincinnati, Baltimore, and Charlotte, N.C., said Amazon left their cities out of the final Top-20 because of a dearth of local technology workers. Yet, several mid-sized metro areas with emerging tech employment such as Columbus, Ohio, Indianapolis and Austin, Texas, made the cut—signaling to some experts that the company is placing quality of skilled tech workforce high in its priorities for the largest headquarters competition in U.S. history.
Amazon didn’t return requests to comment for this story. However, industry experts and researchers said tech talent is a driving force and primary disqualifer for most of the big cities that didn’t make the final list.
Cities that didn’t make the cut characterized the loss as a call-to-action to create a more robust tech economy.
“If you’re going to hire 50,000, and you need 30 applications to fill each job, that’s 1.5 million just to apply,” Mark Williams, board chair for the Site Selectors Guild and president of Strategic Development Group, told Bloomberg Law. “That’s every Tom, Dick, Harry and grandmother for smaller cities. You either have to have the people there or you have to move in a couple million more.”
When Williams helps clients select a new corporate base, he said getting the right workers is always a key factor in where companies go. If a company can’t find the right type of talent within a 45-minute drive of a new location, it’s probably not a fit.
“To attract tech talent, you need quality of life, presence of universities, and other employers to create a base and a momentum where you can exchange ideas and maybe exchange employees,” he said. That means nearly all of the cites which applied had no shot due to small populations and tech economies.
While there are pockets of emerging tech talent across the country, the majority of tech workers are centralized in few tech clusters on the West and East Coasts, Mark Muro, senior fellow and policy director at the Brookings Institution, told Bloomberg Law March 8. Unless the tech industry can be jump-started in a middle-American city, that area will have difficulty attracting new technology companies like Amazon over the coasts, regardless of lifestyle or other factors, he said.
“It’s sort of a chicken and an egg dynamic. Digital skills attract digital companies that attract more digital workers,” he said. “There’s a winner-take-all dynamic and the digital rich seem to keep getting richer. They seem to get richer in all skill sets.”
While Amazon’s request for proposal seeks more than just tech workers, “companies like Amazon, Facebook, Google and Apple are unique in that talent dwarfs everything else,” Calandra Cruickshank, founder and CEO of StateBook International, a company that supplies data analytics for site selections, told Bloomberg Law in a March 8 email.
“Workforce is the number one factor driving site selection decisions, today,” she said. “As with Amazon, companies are more broadly seeking communities that have the skilled labor they require, as well as a strong university pipeline and a high quality of life that will enable them to attract and retain the workforce they need.”
All of Amazon’s Top-20 finalists have elite tech talent. A ranking of cities based on tech employment by global commercial real estate firm CBRE places all of the cities within the top 50 markets in the United States. Only two cities, Miami and Nashville, Tenn. are outside the firm’s top 30.
However, even among finalists, there is a gulf between the top and bottom. Three of those finalist—Washington, Toronto, and New York—each have more than 200,000 locals working high tech jobs. Six finalists—Columbus, Ohio, Pittsburgh, Indianapolis, Nashville, and Miami—each have fewer than 50,000 tech employees, based on 2016 U.S. Bureau of Labor Statistics data.
While Columbus might be seen as an underdog, its high concentration of engineering students from 15 local universities means the city can’t be counted out, David Williams, dean of The Ohio State University’s College of Engineering, told Bloomberg Law March 8.
As part of the city’s bid, Ohio State offered to build specialized programs to create a pipeline of talent needed for Amazon’s operations, Williams, who helped create the bid, said. Ohio State started a similar program to lure IBM to nearby Dublin, Ohio. That program in data analytics is now the largest of its kind in the country.
“There are only two cities in the United States that have a population over one million, a flagship university, and the state’s capital—Columbus and Austin—and they are both finalists for a reason,” he said. “Centralized Ohio makes sense for a logistics company such as Amazon and there are 40,000 engineering students in Ohio alone.”
Some of the cities that didn’t make the final 20 now hope to take steps to ensure they can better compete in the future.
While Las Vegas hasn’t had a post-rejection conversation with Amazon, Jonas Peterson, president and CEO of Las Vegas Global Economic Alliance, told Bloomberg Law in a March 9 email that the organization believes “a robust transit system and pipeline of tech talent” were the key things the city needs to keep developing. He said the region is taking its rejection as a “lesson” and impetus to identify targets for building up specific tech sectors.
In a similar move, Michigan Gov. Rick Snyder (R) has renewed his push for a $100 million “Marshal Plan for Talent” that would prioritize trades and high tech skills learning. The plan was brewing before Amazon’s request for proposal, but it first appeared in Detroit’s bid to Amazon as one of Michigan’s selling points.
“When large employers expand or locate in Michigan, they will know that we have the talent to meet their needs immediately, thanks to education that focuses on the skills, technology and equipment most in demand right now and in the future,” Snyder told Bloomberg Law in a March 8 email.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)