HQ2 Winners and Losers

Posted by on Oct 11, 2017 in Uncategorized | No Comments

vacant land build to suit

HQ2 applications are due October 19. Cities are falling over themselves to woo Amazon, but everyone will win this contest. Amazon is giving North America a crash course on the making of a digital enterprise and it couldn’t come soon enough.

In mid-August, before HQ2 was announced, I was in St. Louis where employment, any employment, was seen as success. The St. Louis unemployment rate is double that of Seattle. And the jobs aren’t as lucrative. The average salary in St. Louis is $52,508 versus $70,618 in Seattle.

St. Louisans are pitching Amazon. They want to activate thousands of citizens in new jobs. They want to attract highly skilled workers to develop the technologies of tomorrow. Who doesn’t?

But they and every other applicant is learning that the application is trivial compared to the resources required to win. Some applicants may think that the proposal is about available land and tax breaks. Those are commodities.

What’s not a commodity is attracting and retaining the world’s best software developers. It costs $30,000 to recruit a talented software developer in Seattle. This is on top of her $150,000 salary. Amazon is looking for, among other things, faster and unfettered access to the world’s smartest software developers as indicated in the RFP.

Amazon’s request includes input on the labor pool

Include specific opportunities to hire software development engineers and recurring sourcing opportunities for this type of employment. Please include all levels of talent available in the MSA, including executive talent and the ability to recruit talent to the area.

Please also include a list of universities and community colleges with relevant degrees and the number of students graduating with those degrees over the last three years. Additionally, include information on your local/regional K-12 education programs related to computer science.

Any city hall or statehouse can manufacture tax breaks out of thin air. They cannot manufacture computer science professionals.

The University of Washington graduated 364 computer science students last year. The University recently raised $110 million to build a 130,000-square-foot computer science school and will begin graduating more than 600 students per year. Seattle has the highest concentration of software developers in the U.S. The city is home to engineering centers of the top three cloud computing platforms — Amazon, Microsoft and Google. Seattle’s software development ecosystem is second only to that of the Bay Area.

But Amazon didn’t select Seattle for HQ2, regardless of the city’s software bonafides. Seattle’s quality of life and diverse population didn’t do it either, which is saying something. And St. Louis is no slouch. Washington University in St. Louis graduates 576 computer science students each year (and major extra credit to WashU since 25% are women).

That’s why Seattle, like every other North American city, benefits from a larger discussion about what it takes to create a successful digital enterprise.