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Amazon's HQ2, Telecommuting, and Online Education

Corporate welfare, superstar cities, and the tyranny of geography.

November 19, 2018
 
 

There are two dominant narratives surrounding Amazon’s decision to split its HQ2 across NYC and Northern Virginia.

The first narrative is to express disbelief at the corporate welfare that Amazon is set to receive.  Amazon will collect over $2 billion in rebates, tax credits and other incentives to locate in these cities. This figure does not include indirect subsidies such as promised infrastructure improvements.

The second narrative is captured in headlines such as In Superstar Cities, the Rich Get Richer, and They Get Amazon. This analysis concludes that while subsidies play some role, the real reason that Amazon chose NYC and Northern VA is because these are places where knowledge workers are thick on the ground. Cities with high densities of tech talent can enter a virtuous cycle, as human capital is multiplied through both attraction (educated workers moving in) and network effects.

I find the subsidy story depressing (standing with Matt Reed), and superstar city analysis persuasive. There may have been no level of cash and real estate that medium or small cities could have thrown at Amazon to land HQ2. Place, it seems, matters most.

Where does the Amazon HQ2 story leave the majority of us who do not live and work in superstar cities?

Should anyone who wants to work with the smartest people on the most exciting projects resign themselves to conducting their own HQ2 competition, and of moving to whatever area offers the densest mix of talent and opportunity?

It was not supposed to be this way. Technology was supposed to allow us to overcome the tyranny of geography.

Telecommuting and online education are not customarily bundled together, but I see them as two sides of the same coin. They both hold out the promise of accomplishing remotely what once could only be done locally. Telecommuters and online students can work anywhere. Or at least anywhere with enough reliable bandwidth.

In the world of work, it seems as if both the importance of headquarters and the adoption of telecommuting are both on the ascent.  Companies such are willing to spend enormous resources to build fancy corporate campuses.  (Apple spent $5 billion on Apple Park).

At the same time, the companies are building showcase headquarters, the number of full-time (non-self-employed) telecommuters has grown dramatically. From 2005 the telecommuting population has increased 140% from 2005 to 2016, to over 4 million employees.  Telecommuters may make up only 3 percent of the workforce, but they are over-represented in knowledge industries.

Online education also continues to witness high rates of growth. Today, over a third of students take at least one online course, up from a quarter in 2012. One-in-six students study exclusively online.   

Perhaps the growing focus that companies are putting on creating appealing corporate campuses is related to the growth of telecommuting.  The physical places that workers gather must provide some added value to what can be derived from working remotely. If you want people to want to come to work at a place, then that place better be worth the cost of living close by and commuting.

A similar trend may be occurring in higher education. Physical campuses continue to evolve and improve.  Classrooms are being renovated into active learning spaces, with flat floors and areas designed for collaboration.  Academic libraries are becoming hubs for social learning.  Higher education seems to be in the middle of a building boom.  Again, if you want residential education to be part of the education on offer, then that residential setting better offer something beyond than what can be found online.

There is some degree of irony to the idea that the technologies that were intended to eliminate the hegemony of place ultimately end up reinforcing their value.

I have no idea how many Amazon employees work remotely. I have a hard time believing that all the best talent wants to live in Seattle or NYC or Northern VA. There must be superstars who don’t want to live in superstar cities.

As for online education, perhaps it is time that we leave behind the idea that distance and residential learning are opposite sides of the postsecondary continuum.  One modality may reinforce the other.

We should be interested in the Amazon HQ2 story. The story of corporate handouts and live in super expensive cities is always interesting. I only hope that we also engage in a conversation about all those who choose to work and to learn at a distance.

Are you living in one place and working in another?  Why did you make this choice?

Are there any meetings or associations that combine the study of telecommuting with the analysis of online learning?

Do you also wonder if you may need to relocate to one of the cities on the Amazon shortlist to have a big career?

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