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February 15, 2019
The PR bout between Amazon CEO Jeff Bezos and Democratic Congresswomen Alexandria Ocasio-Cortez has been settled, with the internet giant cancelling plans to open a New York office.
HQ2, as it had come to be known, was supposed to be Amazon’s attempt to expand its corporate footprint, opening a new, secondary, headquarters outside of Seattle. After a year-long search, the decision was made to split duties between Virginia and New York, with each eventually playing home to 25,000 employees promised Amazon. It seemed like an attractive proposition, but political and residential opposition killed the idea.
“After much thought and deliberation, we’ve decided not to move forward with our plans to build a headquarters for Amazon in Long Island City, Queens,” the company said in a statement. “For Amazon, the commitment to build a new headquarters requires positive, collaborative relationships with state and local elected officials who will be supportive over the long-term.
“While polls show that 70% of New Yorkers support our plans and investment, a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward with the project we and many others envisioned in Long Island City.”
Amazon has been on a year-long road trip to figure out which city would effectively bribe it the most to become the home of the next corporate headquarters. The ‘bribe’ would come in the form of tax incentives and relief for investing in a region, and while this might have looked like a coup for New York and the district of Queens, there has been political opposition.
Ocasio-Cortez was the spearhead, objecting to the billions of dollars’ worth of benefit the internet giant would realise, all at the expense of the tax payer. Opponents to the development also questioned how much of a benefit Amazon would be to the city, as many locals would not be qualified for the newly created positions.
Although there are arguments on both sides of the equation, you have to wonder whether this is a short-sighted move from a politically naive representative. Firstly, New York has not shown itself to be particularly welcoming to technology, the fastest growing segment of the global economy. And secondly, just because people are not qualified for these roles today, doesn’t mean the generations of tomorrow won’t be qualified.
Starting with the first point, many cities across the US are attempting to make their own region appear more attractive to technology companies. This is always for the same reason; politicians and bureaucrats recognise the growth potential of the technology industry and the greater impact this can have on the city. In taking such a strong and aggressive stance against Bezos, New York has given itself a slight technophobe image.
Of course, what is worth noting is the city should not be taken advantage of. This is what many feel Amazon has done, using the immense promise of jobs, investment and prosperity to bleed the city dry. Whether you look at the tax incentives as a pragmatic move or abuse of the system depends on your political swing, but there are fair arguments on both side of the equation.
The second point of opposition is down to the jobs which will be created. Many have suggested these would not be suitable for the local population of Queens, instead outsiders would stream into the area, potentially bringing with them higher house prices and pretentious coffee shops. There is certainly some validity to this position, though you have to wonder whether this is short-sighted.
The first generation might not be the most qualified, but in bringing a new type of job to the area, future generations have another target to aim for. Companies like Amazon also like to run initiatives like coding clubs in local schools, offering young students an opportunity to learn a future-proofed skill which might not be available to them otherwise. There is also secondary employment brought to the district because of the presence of Amazon.
Amazon is also a leader is the quickly prospering field of artificial intelligence. Although engineering and innovation for AI would almost certainly be based in Silicon Valley, the presence of such a massive office in New York would allow the city to create a hub of excellence for AI. Considering the role this emerging segment will play in the future, this is potentially a massive missed opportunity.
There are arguments on both sides of the equation, but we believe this is a short-sighted campaign of opposition. More effort should have been made to renegotiate the terms, as much more is lost than gained with New York snubbing Amazon.
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