Although Amazon’s new HQ2 is going elsewhere (Northern Virginia and Queens), Philadelphia leaders are analyzing the outcome of the decision so that they may learn from it.
Let’s start with some of the positives:
- 10 years ago Philadelphia would never have been in the running to compete for this project and yet we finished in the top 20 out of the 144 applying cities. The business and civic community galvanized around this process putting together an impressive package highlighting Philadelphia as a thriving metropolitan area conducive to attracting, retaining and expanding businesses. This increases our visibility and viability to the national and international business community.
- Amazon’s two new headquarters are bound to cause disruptions with congestion and higher prices and Philadelphia can take advantage of this ripple effect that will spread opportunities to other urban areas. Some companies and some workers will inevitably be priced out of these affected markets and forced to relocate; some companies and workers will now decide not to move to these cities. Philadelphia is well positioned to attract these companies from both a dynamic business climate and a geographical location.
- We now have time to continue to steadily grow our tech and pharma startups and deal with income inequality that has plagued other thriving cities.
Now, some thinking on why we lost out:
- Philadelphia continues to fall short when it comes to a skilled workforce. According to a Brookings Institute report, the City ranks 11th in the nation when it comes to the size of its tech workforce. We rank 39th in percentage of our residents with a bachelor’s degree; 24th with an advanced degree; and our metropolitan rankings are at 17 and 10th respectively. We have made significant progress increasing the number of graduates who stay in the region after graduating, but we must expand our supply of tech- skilled workers to remain competitive.
- We are strong in life sciences and bio – engineering, but we need to up our game in areas such as engineering, computer and data science, and business management.
A next step:
- There has been lots of talk about the use of tax incentives to encourage companies to locate to a particular city. What we learned through this Amazon process is it’s not always about money. Amazon defaulted to a strong workforce NOT tax incentives. We need to learn to use tax incentives reasonably and strategically to attract and retain small to midsize tech companies that will create jobs and add to the strength of our overall economy.
Drexel University president, John Fry, summed it up by saying the Amazon headquarters contest, “… was a great learning experience for all of us, one that will enable us to further dedicate ourselves to becoming a leading city of the 21st century.”