Editorial Board

Amazon's Losing Cities Can Still Win

The contest to become the company's next home should be a pathway to sustainable growth.

Pack up the sign, guys.

Photographer: Justin Sullivan/Getty Images

Congratulations! There is a very good chance your city is one of 237 runners-up in Amazon.com Inc.'s competition for a second North American headquarters. True, your town, city or region won't be getting 50,000 new jobs, an estimated infusion of $38 billion to its economy or a skyline dotted with crystal biospheres. But don't despair: This bidding process for Amazon's affections will yield benefits down the road -- if your leaders learn the right lessons from rejection.

The 238 bids for HQ2 have come from 43 U.S. states and 11 provinces and territories in North America. The proposals include everything from promises of Hyperloop stations in the Midwest to a Georgia city's offer to rename part of itself "Amazon." The mayor of Kansas City, Missouri, made his pitch by posting 1,000 product reviews. Other politicians were more conventional, dangling tax incentives for meeting job-creation targets.

For all the gimmickry, Amazon's choice will likely be made from a short list of usual suspects. For the also-rans, the competition should serve as a jump-start for economic development and civic renewal. Tailoring huge incentives to entice specific companies to relocate rarely makes sense; in most cases, the potential for job creation won't offset the loss of revenue to local governments, and the process has the effect of privileging one employer over others. Cities passed over for HQ2 should focus on existing businesses and modifying policy (not only on taxation but also on such issues as zoning and occupational licensing), to encourage economic growth and dynamism generally.

Amazon's request for proposals emphasizes the importance of human capital: the need for cities to make smart investments in transportation, culture and environmental sustainability. On education, the company asks bidders to detail their K-12 computer science programs and to list partnerships between employers and local colleges and universities. Strengthening both is critical to building a workforce that can compete for well-paying jobs in knowledge-based industries.

The interest generated by Amazon's competition will likely spur other companies to hold reality-TV-style contests of their own. Instead of pandering to the whims of the next corporate suitor, cities should use their HQ2 bids as blueprints for changes that can fuel long-term growth.

    --Editors: Romesh Ratnesar, Michael Newman

    To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net .

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