"Amazon CEO Jeff Bezos, will end up picking Boston."
https://www.forbes.com/sites/peterc...ner-boston-will-win-amazons-hq2/#2a0fae0b712d
Peter Cohan, contributor
$108 billion man, Amazon CEO Jeff Bezos, will end up picking Boston -- which in its October 2017 bid touted the region’s top universities, skilled workforce, and possible locations including a 500,000 square foot development at the Suffolk Downs horse track -- for Amazon's second headquarters (HQ2).
How do I know? Of the 20 cities in the semifinals announced January 18, none have the quality of the Boston area's universities. And none of the contenders produce as many talented graduates with skills in engineering, science, mathematics, and business.
To be sure, Amazon -- which is looking to invest $5 billion and create some 50,000 over $100,000 a year jobs wherever it locates HQ2 -- has articulated other criteria for its decision besides talent.
It also wants a "metro area with more than one million people, a stable and business-friendly environment, and [the ability to] think big when it comes to locations and real estate," according to the Wall Street Journal.
There are many of the 20 candidates on the list with less expensive real estate and more room to expand. Columbus, Ohio -- with an average home price per square foot of $124 -- and Indianapolis (average price/sq. foot: $75) -- are among those locations.
But the reality is that for a headquarters location, the key question for Amazon -- and just about any company these days that depends on brainpower to compete -- is where does the best talent come from and where does it want to be.
For such locations -- including Boston (average price/sq. foot: $621), New York ($1,526), and Washington ($539), the real estate market is efficient. Specifically, high real estate prices and traffic-heavy roads are a negative byproduct of attracting the world's best talent.
In my view, the best talent is educated in the Boston area -- but Boston is not able to create enough jobs to keep them all.
For example, a 2016 report from CBRE, which analyzed U.S. tech employment between 2011 and 2016, "found that a significant portion of Boston’s highly-educated tech talent was leaving Boston for greener pastures, finding jobs in places like the San Francisco Bay Area, Washington D.C., and Seattle," according to the Boston Globe.
CBRE reported that Boston's 17,000 technology related degrees over that five year period beat any other top market. But a Boston Redevelopment Authority Study found that workers who voluntarily leave Boston -- some 50% of the total, according to a BCG report mentioned by the BRA study -- often cite "better job opportunities, unaffordable living situations, say they’re in search of a 'better city experience,' or want to return home."
Indeed my conversations with Boston venture capitalists make it clear that New York is considered a highly desirable location for many people educated in Boston (as is Silicon Valley which is not on the list of 20).
My guess is that Amazon will choose Boston because the New York area will be relatively indifferent to its presence whereas Boston will give Amazon more attention -- as it already has for GE -- ($150 million in incentives). As the Boston Globe wrote, "New York doesn’t plan to offer a ton of subsidies and tax breaks; Amazon would be a 'big fish in a big pond,' according to Mayor Bill DeBlasio."
Is Amazon already tipping its hand towards Boston? I don't know -- but it is looking for a million square feet in Boston separately from its HQ2 search, according to the Globe.
Amazon has over "1,000 people in Boston and Cambridge — mostly software engineers and developers — with offices open or under construction in Kendall Square, the Back Bay, and Fort Point. It expects to nearly double that number over the next few years," notes the Globe.
I would bet heavily on Boston to win -- its elite universities, huge pool of technology talent -- much of which has been leaking elsewhere, relatively affordable (compared to New York) real estate, and willingness to offer incentives to attract HQ2 make it hard to beat.
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