Amazon: Are Virginia and New York ready for Prime Time?
After receiving 238 bids from across the country and over a year of searching, Amazon finally made their selection public this week. In choosing their two new locations of Crystal City, Virginia and Long Island City, New York, Amazon pledged to make $5 billion in capital investments and create 50,000 jobs between the two cities.
At 1776, we have always been bullish on Northern Virginia being a great place to foster innovation as we opened our Crystal City campus in 2016. In the three years since we opened, dynamic companies such as Mobile Passport (the app that lets you breeze through customs), Sandboxx (connecting our military community in a dynamic way), and Drone Airspace Management (a platform organizing and driving the UAS Industries), have benefited from our space and incubator services. Each of them are in a highly regulated industry, trying to provide solutions to some difficult and complex challenges. We’ve been able to help them access the larger ecosystem to allow them the ability to navigate customers, network with decision makers, and have access to a great pool of talent. Hopefully, with this announcement, more resources, experts in digital technology, and talent will make themselves available to all founders and entrepreneurs.
The decision by Amazon to plant their HQ2 in two locations received an array of immediate reactions from excitement to dread. It comes with challenges to ensure that each area is able to provide and maintain an exceptional quality of life for all and not a chosen few. It also provides numerous opportunities to further diversity an economy in the Greater Washington Area that has been too reliant on the government and a stronger foothold in the transformative digital economy.
In the Nation’s Capital Region, politicians from both sides of the aisle and across states lines, joined together in support of Amazon’s announcement. “Amazon in Arlington is a win for DC. We know that this opportunity will push us to work together on our biggest challenges like improving our transportation and infrastructure,” said Washington, D.C. Mayor Muriel Bowser. Maryland Governor Larry Hogan praised Amazon’s decision saying, “Amazon’s decision to locate one of its new headquarters facilities in Northern Virginia is a tremendous win for the entire Capital Region. Collectively, we will not only gain 25,000 corporate-level jobs, but also many businesses that are part of Amazon’s supply chain.”
Virginia Governor Ralph Northam credited the area’s quality work force and world class talent pool as one of the major factors in landing Amazon, “Virginia’s tech talent and stable business environment were keys to landing the project.” According to a recent study by the Greater Washington Partnership, the DC region has the third largest number of digital tech workers in the nation, and the second largest number on a per capita basis. One in every sixteen jobs in our region is in a digital tech occupation. But, there is a 35,000 gap between the digital jobs that are open and the talent pool to fill them.
So it was good to see that along with the announcement by Amazon, Virginia Tech also announced that they would be building a new $1 billion Innovation Center in the same Northern Virginia area. Along with the other 100 institutions of higher education in the region, this new innovation center will work to produce more students with degrees in computer science, software engineering, data analytics, machine learning and artificial intelligence. It will be a hub that will foster collaboration and provide support for research and informational better drive innovation. The future is digital and having the academic resources to support individuals and provide more resources is a positive step in filling the skills gap.
But there were also skeptics to this announcement. Many have criticized the financial and incentives packages given to Amazon – VA offered $796 million while New York leaders offered $1.85 billion. Critics would argue that is simply too much money. Newly elected New York Congresswoman Alexandria Ocasio-Cortez tweeted, “Amazon is a billion-dollar company. The idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need more investment, not less is extremely concerning to residents here.”
This decision will likely stress the infrastructure of the areas, accelerate the need to modernize their transportation offerings, and build affordable housing so all can benefit from this economic boom. How our elected officials, business leaders, and community activities respond and work together to improve and strengthen the areas will be critical. Ted Leonsis, CEO of Monumental Sports and Entertainment said it best, “we all have a great chance to continue to build around our common purpose; making this the best place in the world to live, work, innovate, and compete.”
We look forward to being part of the conversations and being a further resource to help entrepreneurs, risk takers, and innovators grow and succeed.