3 Reasons Why Austin Will Be Amazon’s HQ
Amazon is on the hunt for a second location in North America, deemed “HQ2.”
With bids from over 200 cities, Amazon recently cut the list down to just 20 candidates.
Amazon intends to make a decision by the end of 2018. The Jeff Bezo’s behemoth could bring 50,000 high-paying jobs and $5 billion in investment to the winning city, which has all signs pointing to Austin:
1. Austin is Built for Business
Austin is on the rise to becoming one of the top tech sectors and it’s become an ideal location for business powerhouses.
Tech companies such as Apple, Google, Facebook, Microsoft, and Samsung have offices in Austin.
It’s no wonder, given the states generous business incentives. In fact, in a Moody’s Analytics study, Austin came in first place among the cities for its business environment:
“The top three metro areas ranked by business environment are Austin TX, Nashville and Dallas. All three rank highly for job growth and have the highest possible scores for state and metro credit ratings. Austin and Dallas also benefit from the state’s generous use of business incentives.”
This is certainly in line with Amazon’s request for a “stable business climate for growth and innovation.”
Amazon already has a large presence in Austin by way of its acquisition of Whole Foods which still has it’s headquarters in Austin.
2. Culture and Capital
Austin is well-known for its odd, but delightful amenities. Think Tex-Mex food, ACL, Dirty 6th Street and at least 40 other random perks for travelers and locals alike.
Not only does Amazon want to be amidst an innovative culture for their employees, but they’re going to require a lot of human capital to run their business in the location they choose for HQ2.
Austin offers a giant pool of possible candidates for the 50,000 jobs that HQ2 will bring.
In fact, according to the Austin Chamber of Congress, there are 425,000 college students in the region offering a perfect base of talent for Amazon to pick from.
This means that Austin not only has an ideal location in terms of its culture, but also in its supply of human capital, which will be necessary for such a large initiative.
3. Cost
Given Amazon’s track record for being frugal, Austin’s ratio of quality to cost is excellent.
Compared to places like Los Angeles and New York, I have to admit that Austin might not have as much to offer in terms of amenities.
Regardless, the cost of living in these locations is far above that of Texas inhabitants. As Moody’s puts it in their analysis:
“…the trade-off between quality and cost is clear, as these cities are ranked among the most costly.”
With Amazon being a company that runs on extremely tight margins, it’s in their best interest to save money wherever possible.
Austin offers a solution that will allow their employees to live less expensively, therefore reducing operating costs overall.
What do you think?
Austin certainly has a lot to offer Amazon, but is it enough?
Amazon HQ2 has presented quite the competition for city officials across North America, and now that we’re in round 2 of this bidding war, it will be interesting to see which of the 20 remaining cities will come out on top.
My guess is Austin, but with so many cities offering major tax breaks and incentives for the company, it’s certainly up for debate.
Where do you think HQ2 will land?
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