Amazon's HQ2 has cities in the U.S. going crazy. What can we learn as an ecosystem?

26/01/2018

Amazon is opening its second HQ in the United States. After announcing an application process to look for the ideal location for 'HQ2', local governments did everything to catch the attention of the e-commerce behemoth. Now, Amazon has narrowed down the candidates from 238 to just 20. Which five criteria can we identify? And if this were to happen in Western Europe, how would Leuven MindGate compare?

It goes without saying that the presence of Amazon HQ2 represents a boost for any local economy. "Amazon HQ2 will bring billions of dollars in up-front and ongoing investments, and tens of thousands of high-paying jobs", Amazon founder and CEO Jeff Bezos said. The company intends to invest more than $5 billion in construction and to create up to 50,000 high-paying jobs on what is called a “a full equal to our current campus in Seattle.”

After 238 cities and regions made their bid, Amazon published a list of 20 cities who made the cut.

Copyright: Amazon

Atlanta, Austin, Boston, Chicago, Columbus, Dallas, Denver, Indianapolis, Los Angeles, Miami, Montgomery County, Nashville, Newark, New York City, Northern Virginia, Philadelphia, Pittsburgh, Raleigh, Toronto and Washington D.C. have been chosen.

Amazon will start to work with each of these 20 locations to further investigate their proposals and evaluate the feasibility of their bid. The results will be made public later in 2018.

In terms of criteria, Amazon stated in it's Request for Proposal that it is "looking for stable and business-friendly metropolitan areas with a population of at least one million people (...) with the potential to attract and retain strong technical talent.” Let's have a closer look.

Proximity

With Brussels Airport a mere 15 minutes away, Leuven is as near to an international airport as can be.

Amazon logically aims for the best accessibility and mentioned that it would like the site to be within 45 km of a population center, preferably the center of a region, and within 45 minutes of an international airport. Its future site should also have on-site access to public transport and shouldn't be further away than 3 km from major highways. 

How would Leuven MindGate compare?

With Leuven as the center of the Leuven MindGate region and Brussels Airport closer to its doorstep than Brussels itself, Leuven MindGate already fulfills those requirements. Sitting on the junction of two major European highways (E40 and E314) and a dense network of public transportation, the region is as accessible as ever

Space

The saturated center of Leuven lacks the requested space, although an alternative might be just around the corner, literally.

A whopping 45 000 m² of existing office space and up to 750 000 m² total site space is the minimum required by Amazon. Bearing in mind that cities with talent usually having a lack of space while cities with enough space probably don't have that amount of talent, this isn't as easy as it looks. 

Larger metropolitan areas should be able to fit this space in their agglomeration. To counter this, several bids were partnerships between multiple communities, with Montgomery County and Northern Virginia being the most notable example where HQ2 would be spread across several cities. On the other hand, the Bay Area did the same but did not make the cut, presumably because of the high competition for office space and talent. 

How would Leuven MindGate compare?

Together with Leuven MindGate member cities Aarschot, Tienen and Zoutleeuw, as well as communities like Bekkevoort and Bierbeek, the region houses expertise in different domains. While Leuven might be the talent hub of the region, space can be more easily found in nearby cities like Aarschot and Tienen. An HQ2 bid of Leuven MindGate would thus only stand a chance if the site could be spread across several locations in the region. Not impossible since both Montgomery County and Northern Virginia proposed the same and even Amazon's current HQ in Seattle is spread over no less than 33 buildings. 

Talent

In order to find 50 000 skilled workers, Amazon wants to make sure its new headquarters is in an area with a significant pool of talent. The company prioritizes a strong higher education system. It asked cities to list their universities and community colleges with relevant degrees plus the number of students who graduated with those degrees in the past three years. Amazon also wants information on computer-science related R&D programs in the area conducted by either knowledge institutions or research institutions. 

How would Leuven MindGate compare?

As far as talent goes, Leuven MindGate is the ideal spot. Housing Europe's most innovative university and a leading University College provide the region with a steady output of talent. Add in the oldest tech transfer office of Europe and hundreds of spin-off companies from either the university or strategic research centers like imec, VIB and Flanders Make and it's clear that Leuven has all the talent required to make any multinational mouthwater. 

The groundbreaking research conducted in the region offers an ideal playground for researchers all across the globe and attracts them to a region with a growing international character. 

Population

Amazon is targeting areas with a population of at least one million to sustain the projected workforce of 50 000. That's probably why bids from Billerica, Massachusetts (pop. 40 000) and Edwardsville, Illinois (pop. 25 000) got rejected. Raleigh, North Carolina is the contender with the smallest population of half a million. Just like the space criterium, Montgomery County in Maryland (just over 1 million in population) and Northern Virginia (2,7 million) joined forces and successfully made the final cut. Perhaps strength lies in numbers?

How would Leuven MindGate compare?

The Leuven MindGate region has a population of about 600 000 inhabitants, ranking our region between Nashville and Atlanta. In percentage this means about 5,5% of the population of Belgium. In the U.S., this would represent about 2 million inhabitants, almost the same as Austin, Texas, one of the cities who made Amazon's top 20. In proportion, the region's population would seamlessly sustain such a workforce. 

Culture and quality of life

Amazon is looking for a fitting culture. By this, it means a diverse population, strong higher-education system, and a local government “eager and willing to work with the company.” In order to demonstrate this, Amazon also mentions it "encourages testimonials from other large companies”.

The new headquarters should be in a place "where people want to live". Amazon is interested in daily living and recreational opportunities for people. It also requests statistics on housing prices and availability, general cost of living, and crime statistics.

How would Leuven MindGate compare?

One of Leuven MindGate's core activities is establishing a region where it's nice to study, work and live. All aforementioned criteria are being met in order to do so. The region is no stranger to larger companies the likes of AB Inbev, CommScope, Deloitte, Siemens and Sony among others, who most likely all have made testimonials on the region in the past. 

With 90,1% inhabitants of Leuven claiming to be happy with their life in the city and a whopping 96% of expats declaring the same, Leuven has the necessary facts to back the talk of the town (pun intended). By winning the European Green Leaf Award for its efforts in sustainability and quality of life and announcing a bid for the title of European Capital of Culture in 2030, Leuven is setting its eyes towards the horizon and becoming a city which will continue to woo both individuals and corporations.