More Than Cash, What Amazon Really Looked for in Deciding H2Q

Amazon.com Inc. chose NYC and Northern Virginia as the locations for its new headquarters, referred to as H2Q. Understanding why Amazon chose these cities is crucial to understanding the trends of corporate America. Many would think that Amazon chose NYC and Northern Virginia because they offered the company the most financial incentive: $3 and $2.5 billion, respectively. The leading article on H2Q from the WSJ headlined, “Cash, Promises Won Amazon.”

However, as a later WSJ story indicates, Amazon’s search considered a host of other factors. This is especially true knowing that other cities offered more financial incentive than the elected cities. For instance, New Jersey and its industrial city, Newark, offered $7 billion, and Maryland offered $5 billion. So what were the other factors?

The factors that motivated Amazon’s decision illuminate the growing divide of big cities from the rest of America. Amazon’s list finalists included America’s major cities, which – according to Shayndi Raice and Janet Adamy of the WSJ – contains the accumulation of tech talent, wealth, the Democratic Party, and ethnic diversity in America. The accumulation of these elements continues separating America’s biggest cities from the rest of America.

Amazon stated that diversity was a key factor in its decision. Commenting on H2Q, Joseph Parilla, a fellow at the Brookings Institution, says, “For those that were watching [the Amazon competition] and using it as some sort of bellwether for how the coasts and the heartland are doing, they are coming away saying we’re still in an era where the rich are getting richer both in terms of people, companies and now cities.”

The bottom line is that as America’s biggest businesses continue to accumulate in the biggest cities, smaller cities will find an even greater difficulty catching up and attracting top businesses.