Spotlight: Amazon shifts to U.S. East Coast tech hubs

Source: Xinhua| 2018-11-15 16:30:22|Editor: huaxia
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WASHINGTON, Nov. 14 (Xinhua) -- After a 14-month search for a second home, U.S. e-commerce giant Amazon finally decided to locate its new headquarters in New York City and Arlington County, Virginia, signaling a major shift in its center of gravity to the East Coast.

The company, based in Seattle, said on Tuesday that it will invest 5 billion U.S. dollars and create more than 50,000 jobs in the areas, with more than 25,000 employees each in the two locations.

The decision to split its new headquarters between two cities came as a surprise to some, but many believe it makes sense.

"We're talking about them hiring upwards of maybe 50,000 people and finding the one city that has that much talent, even for New York, would be really difficult," David Reibstein, a marketing professor with Wharton School at University of Pennsylvania, told Xinhua.

In September 2017, Amazon announced that it would open a second headquarters by building "HQ2," attracting bids from a whopping 238 candidates across North America.

Jeff Bezos, founder and CEO of Amazon, also highlighted the talent factor in making the final decision. "These two locations will allow us to attract world-class talent that will help us to continue inventing for customers for years to come," Bezos said.

Virginia's bid to Amazon included its promise to double the number of college graduates in computer science and related fields each year, while New York City will certainly facilitate Amazon's efforts to better connect to the global market, with its office located in Long Island City, just across the East River from Manhattan.

Arlington might not be a name that rings a bell for some, but it's directly across the Potomac River from the capital, and is part of the Washington, D.C. metro area, which some observers believe will expand the company's presence in the political arena.

Anyhow, selecting two locations as its new headquarters will give the company more bargaining power. "There were concessions that were given by both cities and rather than take one concession, they ended up getting two concessions," Reibstein said.

Virginia will grant 550 million dollars of direct incentives over 12 years as long as Amazon creates 25,000 jobs with an average wage of over 150,000 dollars in Arlington. New York State, meanwhile, will offer more than 1.5 billion dollars in credits and incentives if the company meets job creation and building occupancy targets.

The huge amount of incentives has also drawn fire from critics. Nevertheless, some believe that the high-profile move is expected to boost local economy for the two places.

Stephen Moret, president and chief executive of the Virginia Economic Development Partnership, said the project is a "transformational opportunity to diversify the economy" of Northern Virginia, which now focuses on government contracting.

On the downside, it could lead to increased traffic congestion. Also, the likely price increase of houses is not likely to please everyone. Just as Democratic Senator Mark Warner of Virginia put it, "People love to have Amazon here, but they are concerned about the affordability of housing."

Amazon, currently the world's third-most valuable company, joins a crowd of tech giants that compete to build offices outside the West Coast, which is traditionally known for its "high tech clusters."

But the East Coast is catching up, as tech workers are increasingly drawn to cities like New York, Boston and Atlanta, all of which have a strong higher education sector.

Google has 7,000 employees in New York, and Facebook has more than 2,000. According to official statistics, tech sector employment in the city grew by 65 percent to reach an estimated 134,700 from 2010 to 2017.

As for Arlington, this could be a game changer. "The choice of Crystal City in Arlington County as one of the winners cements Northern Virginia's reputation as a magnet for business and will potentially reshape the Washington region into an eastern outpost of Silicon Valley over the next decade," said an article from The Washington Post.

Amazon is not alone in making its strategic plan across the East Coast. Google is reportedly making preparations for its expansion in New York City, which could add space for more than 10,000 staff. Enditem

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