Portland economist predicted Amazon HQ2 split months ago
It was more than a lucky guess.
When Amazon.com announced a nationwide hunt for a location to build its second headquarters — dubbed HQ2 — credulous journalists and analysts largely took the e-commerce giant at its word.
One local economist, however, wasn't surprised when the company was revealed to be hedging its bets. In fact, he predicted Amazon would split the apparent $5 billion investment across two cities way back in January.
"I don't think it should be a surprise to anybody," prognosticator Joe Cortright told the Tribune. "Strategically, it makes a lot of sense."
Cortright published his predictions, "Two things everyone's missed about Amazon's HQ2 decision" on the online think tank he oversees: City Observatory. The gist of his argument made two points:
• Amazon doesn't want to clone its Seattle campus. It's looking for locations that can specialize as the company grows its numerous offshoots, such as robotics, telecommunications, media and web hosting.
"Its business strategy (is) to pick places that aligned not necessarily with what the company has done in the past, but what it wants to do in the future," Cortright said in an interview.
• Publicly picking just one winner would leave Amazon in a terrible bargaining position — especially when its grassroots opponents learn what local politicians have promised.
"This has been far too lucrative a game for Amazon for them to say, 'We're done now. We're locked into this one location,'" added Cortright. "By having two 'winners,' it can keep them both honest."
As the world learned earlier this month, Amazon plans to divide its new headquarters between Arlington, Virginia and the Queens borough of New York City. It's a likely indication that the company foresees hiring plenty of new lobbyists to work in the nation's capitol, and may hope to use Madison Avenue street smarts to grow its web advertising revenue.
Portland submitted a perfunctory bid for HQ2 along the downtown Broadway Corridor site when the contest began in September, 2017, but never really expected to win. Cortright notes that Amazon wants to attract new types of talent — and for reasons that are alien to us — some people just don't want to live in the Pacific Northwest.
"Portland is too much like Seattle," Cortright said.
But binge-shoppers shouldn't feel too bad. Amazon's data centers gulp down power in Prineville and its shippers keep warehouses ticking in Troutdale, Salem, Hillsboro and Portland. The Amazon Web Services subsidiary AWS Elemental works on streaming video solutions in Portland as well.
Cortright says he plans to write up his own conclusions about the Amazon decision soon, so be sure to check out his website here.