When Amazon announced that it was inviting cities to bid for its second headquarters (HQ2) in the US it released criteria to guide city bids.
Amazon’s criteria included being a city/metro area of more than 1 million people, with a stable business environment, attractive to technical talent, excellent universities, near an international airport, with direct access to mass public transport. It wanted a site that exemplified sustainability and had fibre internet connectivity. Along with a good cultural/community fit and a high quality of life they specifically asked about things like bike lanes and pedestrian access, local schools, and creative programs with the universities.
Amazon’s offer was to host Amazon’s second headquarters with 50,000 employees on an average $100,000 pa salary.
Cities across America took the opportunity to pitch. You can just imagine how these bids were developed- the sense of urgency and hope that cities ‘on the economic edge’ might have a chance.
It’s no wonder. The impact of these 50,000 jobs would have been incredible. A study indicated that it would add $17 Billion per annum to a city economy.
That pushed cities into a bidding frenzy. Many offered billions in incentives (Maryland offered up to $8.5 billion)– through tax breaks and cash payments. Atlanta offered to rename streets after Amazon products along with an ‘elite lounge’ at their hub airport for Amazon employees. Fresno offered Amazon say in how its taxes would be spent.
But Amazon’s ultimate decision(s) showed that ‘superstar’ companies are looking for certain qualities that require secondary cities to read between the lines of any formal criteria.
Firstly, the CEO has to like the place. If they are expected to spend a reasonable amount of time in a city, then the CEO will want to enjoy the experience. So will their partner and family. So will their executive teams. So will their highly paid talent. They will want friends in the area and access to activities they like to do.
These are the soft factors only hinted at in the formal criteria. Jeff Bezos wanted easy access to the types of key decision-makers you’ll find in ‘superstar’ cities not in secondary cities. After all, he owned homes close by already.
How much did cities know about Amazon employees and what mattered to them?
Secondly, desperation in secondary cities is not an attractive quality. It reduces confidence in them, it doesn’t build it. A confident city is bold enough to go against the grain, to have a perspective on itself. It has insight on the sort of business fit that makes sense.
Thirdly, cities have been deluded for years that you can ‘invest’ in ‘buying’ companies in and they will overlook your lack of investment in your own city quality. This may work for companies looking for low value locations – but it is really outdated.
Cities have to stand for something beyond their own self-interest and desperation. This can’t change with every election cycle. Squabbling over silly, small-town issues in small-town ways is no recipe for facing the future.
So a small town city resents every trip made by politicians and bureaucrats overseas. Ambitious cities know that these trips are essential – to play in global ideas agendas is as important as any piece of physical infrastructure.
Political leaders need to see their competition. Check out the smart things cities are doing. Check out the urban qualities offered by cities in Europe. Check out the public transport systems in South America. Check out how environmental legislation feeds innovation agendas and grows local manufacturing. Check out the ways cultural assets and creative people create a certain vibe that change the way people feel about themselves. Look at how cities are inspiring their own citizens.
Old economic outlooks advocate reducing taxes as key to incentivising business. But businesses will pay more tax for in the right locations. Our models are all confused.
So what do ambitious secondary cities need to do?
Well recognise that superstar companies are not interested in them. The best way to get a superstar company is to grow it yourself. We know that companies will often, not always, keep a major presence in their city of origin. Treasure your difficult, weird and passionate people.
Invest in your urban quality (public transport, parks, public housing, cultural facilities, schools, bike superhighways) and find a way you can contribute to the world. What can you test? Where can you experiment?
Make your city a place for human creativity. Make it happen city-wide. Commit to high risk/highly important missions that will benefit the world and the local city.
Be open and engaged in the world.
Remember how it feels when you can’t help yourself to join in an experience. When you have to go to a certain concert no matter what. You have to own a certain thing no matter what. You have to meet a certain person no matter what. Cities offer that too.
Be the sort of place that employees would lobby their company to move to. Be the sort of place where people want to be a part of the experience you offer. Tell a story you that is much deeper and more nuanced that the one you are likely telling now.