Amazon HQ2 is shaking up site selection for good – here's why that's good for Columbus
A real estate economist and futurist thinks the way companies go about choosing relocation and expansion sites will forever be altered by how Amazon.com is conducting the search for a city to host its coveted second headquarters.
And that bodes well for Columbus.
K.C. Conway, chief economist for the commercial real estate trade organization the CCIM Institute, authored a white paper in partnership with the Alabama Center for Real Estate that discusses how “Amazon’s HQ2 site selection process is more than just a point along a timeline charting its evolution as one of the world’s most transformative companies. It is a reset button that will likely have implications far beyond Amazon.”
In the report,Amazon HQ2: A Reset Button for Site Selection, Conway predicts that workforce availability and lifestyle issues will overtake subsidies and real estate incentives as the primary concerns of relocating and expanding companies.
“A close reading of (Amazon’s) RFP reveals that the search seems less about incentives and more about workforce solutions and corporate culture fit,” he wrote. “Other rising and transformative technology companies may use similar criteria for future site selections.”
In addition to its numerous colleges and a relatively low cost of living, the Columbus region also benefits from one other key factor: It lies in what Conway calls the “Golden Triangle” from Lake Erie to Texas to northeast Florida that
“produces approximately 50 percent of the U.S. annual GDP and an abundance of the skilled workforce that technology, e-commerce, and logistics companies are in desperate need to recruit.”
“Due to the remaking of North America’s supply chain, retail disruption, the growth of e-commerce, and a focus on workforce availability and affordability by technology and logistics companies, the Golden Triangle has become a new frontier for growth, not just for Amazon, but also for other technology, auto, aerospace, manufacturing, and logistics companies,” he wrote.
Even beyond Amazon, Conway identified Columbus as one of three cities in the U.S., along with Pittsburgh and Atlanta, that will be the “top contenders for corporate site selections in the coming years.”
“(Columbus) is the epicenter for the National Center for the Middle Market companies – the small- to mid-size businesses that Amazon so covets and which account for 35 percent to 40 percent of U.S. GDP and job growth. Plus, Ohio State University pioneered today’s graduate programs in logistics,” he said.
It’s worth noting that Ohio and the Columbus region are already pretty good at attracting investment. Site Selection magazine last year ranked Columbus the No. 8 metro region in the country, and Ohio the No. 2 state, in its closely watched annual report tracking new and expanded business facilities. It was the fifth year in a row that Columbus made the top 10.