A key ingredient in Amazon’s selection process

Whether it be a tech giant or the federal government, the best approach in targeting big investment in one place is to ensure the local community has social cohesion and common vision.

New York Governor Andrew Cuomo and New York Mayor Bill de Blasio speak during a Nov. 13 news conference about Amazon's headquarters expansion to Long Island City in the Queens borough of New York.

In its selection of New York City as one of two places for a new headquarters, Amazon revealed a key necessity for such a big investment in one community. The tech giant first had to make sure that Mayor Bill de Blasio and Gov. Andrew Cuomo would get along in shepherding the project. The two politicians are rivals. Yet with a mutual incentive to uplift Queens’s Long Island City, the two decided to put aside their differences.

More than 200 places vied to be a second (or third) headquarters for Amazon. New York was hardly alone in discovering that it must show the whole community was engaged and on board. In many of the competing places, local leaders in business, education, and government came together to offer financial incentives, promise upgrades, and consider other inducements. In some cities, many of the proposed projects, such as transit improvements, may now go ahead anyway, simply out of newfound cooperation over a shared vision.

This is a key lesson learned after decades of attempts by governments, businesses, and foundations to target investments in particular places, especially distressed ones. Local stakeholders must show social cohesion and a sense of a common destiny. Tax breaks can be attractive. Having a good university may help. Commute times, housing costs, and nightlife for younger workers must be considered. But intangibles like trust, unity, and caring within a community make the ultimate difference.

Amazon’s 14-month selection process came at a good time. Under a new federal program embedded in the 2017 tax overhaul, investors of almost any kind will soon be granted a long-term tax incentive to put money into low-income areas known as “opportunity zones.” More than 8,700 such zones have already been designated by states and approved by Washington. Final rules for the investments will be in place early in 2019.

The tax incentives are so generous that the think tank behind the idea, the Economic Innovation Group, estimates that as much as $6.1 trillion now held by both corporations and households could be invested in both rural and urban communities. The concept builds on previous “place-based” investment schemes, such as President Barack Obama’s Promise Zones program. Scholars who study such programs say most have largely failed. They will be watching this latest – and bipartisan – effort closely.

What could succeed this time is that investors, who must put up money for more than a decade to get a big tax break, will be very careful in choosing a low-income community that has come together to support big and small investors. Amazon’s selection process was a very public model for this approach.

Amazon’s final selections of New York and northern Virginia’s Crystal City are not a model in one respect. The two places are already well on their way to becoming big growth centers. The purpose of the opportunity zones is to reduce regional inequality in the United States and the concentration of high-growth, high-tech megacenters like Boston and Silicon Valley.

Nearly 35 million Americans live in the newly selected zones, many of them in poverty and without higher education. Previous development schemes have failed them. But like the mayor and governor in New York eager to attract Amazon, they and their local leaders may now come together to bring in investments. Opportunity knocks. But will communities open the door?

You've read  of  free articles. Subscribe to continue.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to CSMonitor.com.

QR Code to A key ingredient in Amazon’s selection process
Read this article in
QR Code to Subscription page
Start your subscription today