In September 2017, Amazon announced that it was planning to set up a second headquarters. It published a "Request for Proposal" that began:
Amazon invites you to submit a response to this Request for Proposal (“RFP”) in conjunction with and on behalf of your metropolitan statistical area (MSA), state/province, county, city and the relevant localities therein. Amazon is performing a competitive site selection process and is considering metro regions in North America for its second corporate headquarters.
The RFP suggested that within broad parameters, the search was wide-open. It is full of comments like " All options are under consideration" and "We encourage testimonials from other large companies" and "Tell us what is unique about your community." The quick overview of its requirements looked like this:
In choosing the location for HQ2, Amazon has a preference for:
HQ2 could be, but does not have to be:
Several hundred cities heard what Amazon said, and sent in proposals. Many of those were no-hopers, of course. Still, now Amazon has announced its choices: New York (technicallly Long Island City) and DC (technically Arlington, Virginia). Wow, some really radical open-minded out-of-the-box thinking there! It seems as if a more accurate list of criteria for Amazon's Request for proposal might have had three elements.
2) Should either be near the nation's major center of government or near the nation's major center of the financial industry. Or maybe we'll just do both.
3) Should be one of the top two cities for total number of people already employed in computer and mathematical jobs. Alan Berube at Brookings offers this useful table.
There's nothing wrong with these actual criteria. Having a corporate headquarters near the residence of the CEO, especially when the CEO is as closely identified with the company as Bezos is with Amazon, is a long-standing practice. There are obvious advantages to being in New York and DC.
But I do wonder if the folks at Amazon have any clue about how annoyingly cozy this looks to the several hundred other cities that took the time to put in bids. Sure, places like Columbus, Ohio, or Indianapolis, Indiana can get a pat on the head for being on the "short list." The day before the decision was announced, the major of Jersey City tweeted: "Of course #jerseycity would benefit if it’s in NY but I still feel this entire Amazon process was a big joke just to end up exactly where everyone guessed at the start. No real social impact on a city, no real transformation, no inspiring young residents that never had this" The next time Amazon starts talking with cities about locating a facility anywhere, this process will be remembered.
In the RFP, Amazon talked a good game about the importance of a " local government structure and elected officials eager and willing to work with the company." It talked about a fast permit process for building, and about the importance of smoothly functioning transportation infrastructure. If Amazon becomes mired in the local politics, regulatory disputes, and traffic jams of New York and DC, it shouldn't expect much sympathy from hundreds of other places across the country.
A version of this article first appeared on Conversable Economist.
Timothy Taylor is an American economist. He is managing editor of the Journal of Economic Perspectives, a quarterly academic journal produced at Macalester College and published by the American Economic Association. Taylor received his Bachelor of Arts degree from Haverford College and a master's degree in economics from Stanford University. At Stanford, he was winner of the award for excellent teaching in a large class (more than 30 students) given by the Associated Students of Stanford University. At Minnesota, he was named a Distinguished Lecturer by the Department of Economics and voted Teacher of the Year by the master's degree students at the Hubert H. Humphrey Institute of Public Affairs. Taylor has been a guest speaker for groups of teachers of high school economics, visiting diplomats from eastern Europe, talk-radio shows, and community groups. From 1989 to 1997, Professor Taylor wrote an economics opinion column for the San Jose Mercury-News. He has published multiple lectures on economics through The Teaching Company. With Rudolph Penner and Isabel Sawhill, he is co-author of Updating America's Social Contract (2000), whose first chapter provided an early radical centrist perspective, "An Agenda for the Radical Middle". Taylor is also the author of The Instant Economist: Everything You Need to Know About How the Economy Works, published by the Penguin Group in 2012. The fourth edition of Taylor's Principles of Economics textbook was published by Textbook Media in 2017.