Why Amazon Focused on Specialized Talent in HQ2 Search
When Amazon chose Long Island City in Queens, New York, and Crystal City in Arlington, Virginia, as the sites between which to split the company’s second headquarters, I kept hearing that the choice was all about talent. Or, according to the title of an analysis from Brookings: “talent, talent, talent.”
Of course it was about talent. To be more precise, the company made its decision by selecting locations with specialized kinds of talent that meet certain needs.
What’s critical is that Amazon gets very different kinds of talent between New York City and the D.C. metro area. New York is a center for global finance and the headquarters of many international companies; it’s also a media center and budding tech hub. New York is the place to be for global management talent. As Stacy Mitchell put it in an article for The Nation, Amazon’s ambition spans more than a single market; its aim is to become a “radically new kind of monopoly with ambitions that dwarf those of earlier empires.” With that in mind, it’s easy to imagine why Amazon would want to attract the best talent in management. Jeff Bezos wants Amazon to dominate, and he needs great managers for that.
Crystal City, in the D.C. metro area, puts Amazon closer to tech talent, but also to government leaders, cloud customers, and the U.S. Department of Defense.
Revisiting the list of Amazon HQ2 finalists, it’s clear (at least by now) that it isn’t really a list of potential sites for a second standalone headquarters. Sure, New York, D.C., Boston, Chicago, Dallas, Atlanta, and Toronto all make sense for a second HQ. But Pittsburgh and Austin are tech hubs. Columbus, Indianapolis, and Nashville have the logistics capacity. Miami is the Latin American gateway.
A corporate locational strategy does not mean optimizing for one thing only. Rather, it means searching across a broad economic landscape to find matches between specialized kinds of talent and location.
When we look at Amazon’s HQ2 process through this lens of corporate locational strategy, we see that it was never about finding a single site for one more headquarters. Instead, it was Amazon’s way of crowdsourcing information on sites, their specialized types of talent, universities, training programs, transportation, and so on. And it shouldn’t be overlooked that another central goal was to extract maximum concessions, incentives, and leverage from state and local governments.
Amazon’s corporate locational strategy makes sense for Amazon, but that doesn’t mean it makes sense for the cities granting incentives, nor the people who currently live there. Press coverage of the negative potential of Amazon coming to town also hurts the company’s brand. Recode titled one of its recent podcast episodes “Amazon’s HQ2 was a con, not a contest.” New Yorkers organized anti-Amazon protests on Black Friday and Cyber Monday. For a consumer-facing company whose customers are average people, Amazon’s brand should be worth even more than the $3 billion in tax incentives it’s reaping from New York.
CityLab editorial fellow Nicole Javorsky contributed research and editorial assistance to this article.