Amazon.com is looking at adding a second headquarters. That's pretty impressive; so many companies haven't felt the need to leave their own main office. But then, I guess Amazon isn't like most tech companies in that they have a whole lot of world-wide logistics to take care of, and at some point you can't do all that from one campus in one place. So now they want a second headquarters; it didn't work so well for the Roman Empire, but they're going to try anyway.
What's amazing to me is watching various cities jockey for the position, and the tech/urbanist pundits try to handicap the race. All we know is that it will be in the U.S. or Canada. Presumably it will be some distance from their current HQ in Seattle. Good transportation is a must. There's also an assumption that high costs will take New York, Los Angeles and the San Francisco Bay Area/Silicon Valley out of the mix too. And since CEO Jeff Bezos is pretty hands-on, it will also have to be a place where he has or is willing to buy a home
It's an interesting question, and reminds us of how geography still has meaning in tech. The media talks about tech as though it all happens in Silicon Valley. And while it is remarkable how concentrated the industry is, the fact is that there are a number of smaller tech centres around the U.S. Amazon's current home in Seattle is one (also home to Microsoft) but there's also Austin, Washington D.C. and Boston, among others.
I've always been a little mystified by how tech companies choose to locate. The usual explanation is that they cluster together in these areas because they have to go where the talent is. But the counter-argument to that is that you're also going where other employers are. Whether you're in an area with lots of potential employees and lots of companies, or few potential employees and few companies hiring them, you'll probably end up with the same quality of employees. And the less-competitive job market has the advantage that less competition won't drive wages up.
But the truth is that there are many other reasons that tech companies huddle together. For instance, venture capitalists work closely with their investments, so they're much more likely to back a company that's local to them.
But we're not talking about a startup here, we're talking about a company that already has a reputation and a ton of money. So I figure they have a lot more freedom to go anywhere they want. They could probably go somewhere that doesn't normally have a big supply of tech employees, and just assume that their presence will draw applicants to the new place. Even the cultural accoutrements of tech employees will probably follow. That could be a boon for cities that are stuck in a rut, perhaps held back by a staid old populace unwilling to try new things. But add a bunch of young cosmopolitan folks with money to spend and you'll soon have all the ethnic restaurants and art installations you want. Having grown up in a culturally conservative city, I'd always fantasized that a tech company relocated there and disrupted the culture. Well that could be about to happen.
But that brings up the big disadvantage of winning the Amazon sweepstakes. You don't just get the good parts of Silicon Valley, like jobs and sushi. You'll get the bad parts too, like gentrification. Dropping a bunch of well-paid employees into a city will take supply and demand in unpleasant directions. As the San Francisco Bay Area found, just because you have a really advanced economy: 1. the people who already lived there aren't going anywhere, and 2. You're going to need people who do less glamorous jobs, who don't make a lot of money. So whoever wins the new headquarters won't fix all their problems, they'll just get lots of exciting new problems to work on.
No comments:
Post a Comment