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Amazon鈥檚 two-site HQ pick suggests graduate skills shortfall

In selecting its new bases, the massive online retailer rewarded areas rich in highly educated talent but also showed no US city yet produces enough such people

Published on
November 16, 2018
Last updated
November 20, 2018
Amazon warehouse
Source: Getty

Amazon鈥檚 highly public for a new headquarters served as a massive advertisement for the value of investing in education and also as a signpost for where US universities still fall short.

In selecting sites around Washington DC and New York 鈥 two cities ranked among the nation鈥檚 most highly educated 鈥 Amazon made clear the seriousness of its oft-stated commitment to talent as prime in its search criteria.

And Amazon鈥檚 11th-hour move to split the final decision聽between two locations might show that US universities, for all their talk of educating a robust 21st-century workforce, might not yet have figured it all out.

鈥淢y sense is they were looking for a broad array of talent, and they couldn鈥檛 find it in one city,鈥 said Jamie Merisotis, president of the Lumina Foundation, which specialises in higher education and workforce needs. 鈥淎nd that may say something about how we produce talent in this country.鈥

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Amazon, the world鈥檚 largest internet-based retailer and one of the three most valuable companies globally, its plans to establish a second headquarters to complement its base in Seattle in September 2017. It promised the selected area a massive infusion of 50,000 jobs, paying average full-time salaries of $100,000 (拢77,000), as part of a two-decade investment worth $5聽billion. The company listed a 鈥渉ighly educated labour pool鈥 among its chief requirements.

Amazon was founded 24 years ago by Jeff Bezos as an online bookseller, but it now markets almost anything conceivable, and it is increasingly creating its own products and services. Its mission now to have evolved into an open-ended bid to combine knowledge of human behaviour, marketing, artistry, artificial intelligence and more into directions not yet imagined. As such, it is asking higher education not just for volume and quantity, but for uncharted realms of interdisciplinary thinking.

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That prioritisation of talent appears baked into Amazon鈥檚 operations, even its lowest-paid workers. The company covers 95聽per cent of tuition fees and textbook costs for hourly employees seeking to acquire certain high-demand skills.

A total of 238 US cities and regions lodged bids to host Amazon鈥檚 new headquarters by the company鈥檚 October 2017 deadline. Applicants emphasised educational and non-educational factors, such as transport capabilities and tax incentives. Amazon trimmed its candidate list to 20 in January. At that point, a Washington or New York selection seemed likeliest, given that those were the only locations with multiple finalists.

The winners this week are the northern Virginia town of Alexandria, across the Potomac River from Washington, and an industrial area of Long Island City, across the Hudson River from Manhattan and the United Nations headquarters.

Washington was likely helped by being the nation鈥檚 political capital and a chief home for Mr Bezos, who owns both The聽Washington Post and a $23聽million mansion in the city鈥檚 Kalorama neighbourhood. New York, the nation鈥檚 financial capital, leads the US with both its 8.6聽million population and its 70 of the world鈥檚 Fortune 500 companies.

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The two locations, however, also had strong educational credentials, scoring well above even the averages of the finalists on degree attainment, both generally and in technical fields. New York also has two of the nation鈥檚 top聽15 business schools and one of its top聽15 computer science schools.

That technical expertise is an area where the Washington聽region now appears ready to bulk up. Alongside Amazon鈥檚 announcement this week, Virginia Polytechnic Institute and State University (Virginia Tech) outlined to a $1聽billion, 1聽million square foot (92,900聽square metres) technology-focused campus 2 miles (3.2km) from the Alexandria site. Other local institutions, including George Mason University, also described plans for new facilities. Amazon鈥檚 commitments in New York include providing space for a technology start-up incubator and for a new school.

The two US cities with arguably better higher education credentials, San Francisco and Boston, both may have had major shortfalls that Amazon could not overlook, including already intense competition for technical talent. San Francisco may have been too close to Amazon鈥檚 present Seattle home. Boston may have been too . Either way, Amazon already has significant and growing creative presences in both cities, among others.

That distributed model may have foreshadowed the fact that, for all the hype over their search for a new headquarters, Amazon executives had long concluded that no single city could provide everything it wanted.

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and universities now to lessons from Amazon鈥檚 search. As they do, Mr聽Merisotis said, it may be reasonable to ask whether US higher education has been given a failing grade so far on its ability to train Americans for a 21st-century workforce.

鈥淚 don鈥檛 know what the narrative will be for higher education about Amazon,鈥 he said. 鈥淓xcept that higher education has got to do a better job of producing the talent that society needs, whether it鈥檚 for a company such as Amazon or for the long-term future of what鈥檚 needed in these communities.鈥

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paul.basken@timeshighereducation.com

POSTSCRIPT:

Print headline: No prime pool for US talent, Amazon hints

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Reader's comments (4)

Awarding massive salaries to exploit ordinary workers, it seems. Check out the GMB action against the conditions at 'Fulfilment Centres' in the Uk, not least Rugeley. Similar reports have emanated from Germany.
If this case tells us anything about talent it's about the attractions of the huge diverse labour markets in global cities, not so much to do with universities. The bigger lessons in this case are about the power of monopolistic corporations over the State and the ordinary citizens.
Correction to "Long Island City, across the Hudson River from Manhattan and the United Nations headquarters." It is across the East River from Manhattan.
Those 283 cities gave, for free, Amazon a lot of data about its citizens, at what cost? Why are we so beholden to Amazon, which has done everything it can to destroy booksellers, amongst others, in order to monopolise markets? Why should universities take any 'lessons' from this company, which exists only to make enormous profits regardless of the cost to anyone or anything else?

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