The Daily Parker

Politics, Weather, Photography, and the Dog

Thanks for playing

Richard Florida demonstrates how Amazon's HQ2 competition was rigged:

A detailed analysis undertaken by Patrick Adler, my colleague at the University of Toronto’s Martin Prosperity Institute, and Adam Singer, a graduate student at the university’s Rotman and Munk schools, took a look at how all 238 HQ2 applicant cities and the 20 finalists lined up on Amazon’s RFP criteria. While it can be difficult to measure whether a given city adheres to each criterion, their analysis shows that many of the finalist cities do not even fit the most obvious ones. What’s more, several of the rejected cities seem to fit Amazon’s criteria for its HQ2 city better than some of the finalists.  

[I]t’s worth asking why these 20 cities were selected as finalists, even if others would appear to be better candidates according to Amazon’s own criteria. Our analysis suggests the finalists may have other things in common that are not listed on the company’s RFP.

For one, the finalists are more likely to be farther away from the company’s original home base in physical distance, reflecting the predominance of East Coast cities on the list. Last year, an Amazon executive was quoted as saying that Amazon would like to build HQ2 outside of the Pacific Northwest, to attract a more diverse set of employees.

Finalist cities are also likely to have a larger share of tech workers. And they are more likely to have non-stop flights to the company’s current home base in Seattle.

But one factor is even more interesting. Our analysis found that shortlisted cities had more U.S. senators with considerable seniority.

At the end of the day, none of this should surprise us. Like all corporate site selection, the HQ2 process is a rigged game, where the company knows the answer in advance and sets up a fictitious competition to wrest maximum incentives.

Besides the political advantages, there are many signs that Amazon’s HQ2 is heading to the greater Washington, D.C. region—the fact that its CEO has a multi-million dollar mansion there (currently undergoing a $12 million renovation, with large public rooms for social events) and already owns the Washington Post; the fact that three area jurisdictions made the shortlist; and the fact that the person running Amazon’s search previously ran an economic development agency in the region. Perhaps four other metros on the list are serious contenders—New York, Boston, Chicago, and Toronto—with Philadelphia, Denver, Atlanta, and Dallas having an outside chance.

Chicago, however, will be less likely to play the race-to-the-bottom game.

Add comment

Loading