What Amazon is Looking for in HQ2
We’ve all been on a bad blind date. Your aunt swore that you had something in common, but you show up holding your dog-eared copy of “The Hobbit” and she’s toting Dan Brown’s “The Da Vinci Code.” You just know you’re in for two hours of awkward pauses and forced small talk.
Even worse: You connect with someone and think there’s a spark, but the interest isn’t mutual. Your texts are met with stony silence, and you’re left to wonder if it was you, not her.
This is the situation now facing the applicant cities that failed to make the cut as finalists for Amazon’s HQ2. They went on a blind date, put their best face forward … and Amazon swiped left.
This first round of the Amazon dating game has created two very different conversations. In one, the finalist communities are weighing the concerns about bringing the internet mammoth and its 50,000 jobs to their hometowns. They’re debating the impact this corporate expansion might have on equitable job growth, displacement of low-income residents, whether Amazon’s scale is too large for any city to support, and the use of public funds. In the other conversation, the spurned non-finalists are asking: “What can we do differently to contend for the next business, big or small?”
A unifying theme among the non-finalists is the need for talent. More than subsidies, access to land, or high-quality infrastructure, a strong talent base and a stronger talent pipeline are seen as keys to being competitive.
Detroit is staging a remarkable comeback by most accounts, and while landing Amazon HQ2 would have been another win, missing the finalist list may be better in the long run. While some local leaders cite an inability to attract new talent as a reason for Detroit’s failed bid, others are focusing on cultivating the talent in their own backyard.
It’s not often that Detroit, Houston, and Charlotte are seen as similar; but in truth all three have recently faced a similar challenge: fostering local talent. Houston has seen a significant growth in higher education attainment in the STEM fields, but that city also fell short in the HQ2 race. Turns out a general focus on STEM education tends not to emphasize the deep skill in technology that many new careers demand.
Charlotte, on the other hand, is openly asking itself if its residents are educated enough. Despite Charlotte’s growing technology workforce, leaders there wonder if the city can compete with places like the nearby Research Triangle that have many higher education institutions nearby.
The answer is yes. Yes, Charlotte, you can compete despite not having major research institutions in your city. Yes, Houston, you too can attract new business by responding to the call the Houston Chronicle made.
First, invest in talent development with those dollars and subsidies you wanted to use for your Amazon bid. For many cities and communities, it is not realistic to attract the talent you need to support expanding business.
Instead, take those public dollars and provide them to high-quality post-high school education providers. And no, Charlotte, they don’t need to be traditional higher education institutions. Take a cue from towns across Indiana that have invested in Goodwill Excel Centers—sites that provide adults with both a high school diploma and an industry-recognized certification in a high-demand field.
More than just training, adults enrolled in Excel Centers are placed on a pathway that leads beyond their first certification, deepening the local talent pool. Scalable models like Excel Centers are affordable to taxpayers—costing far less than the billions offered to Amazon—and responsive to local labor needs. And those cities that do boast traditional colleges and universities should invest in talent development by helping those institutions educate more adults. In the hyper-competitive higher education market, the historic focus on traditional students—unencumbered 18-year-olds—just isn’t enough to build a region’s talent pool.
Second, engage in cross-sector partnerships. Connect businesses with education providers to develop strong talent pipelines for the workforce of the future. Businesses large and small invest in their workers through direct training and by offering tuition reimbursements. The return on investment for tuition reimbursement dollars is well documented, and through partnerships with education providers, those dollars can be more effectively leveraged to upgrade adults’ skills.
In Indiana, the Achieve Your Degree program is a partnership between Ivy Tech Community College and local businesses to leverage tuition assistance programs. Thanks to direct-billing relationships between the community college and business, and deferred billing arrangements that delay tuition payments to the end of the term, employees avoid many financial barriers as they earn certificates and degrees.
Finally, if you can’t attract talent from other cities, cultivate your own talent pool and make your hometown a destination for business, not new people. Especially during a labor shortage, increasing your local talent base and providing effective pathways for those outside the labor pool will attract the investment you seek. Small and rural communities should take note of Elkhart County, Ind., where business and education providers have launched one of the nation’s first dual-language apprenticeship programs that lead to both employment and college credit.
Though it’s unlikely that a new Amazon is coming anytime soon, plenty of businesses are ready to scale, relocate, and expand. At the very least, Amazon helped us all learn a lesson in leading with talent—because when a community leads with talent, business swipes right.