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Nov. 18, 2018
The New York City, Washington, D.C., and Nashville areas are about to experience a different sort of “Amazon effect.”
The e-commerce giant announced last week that it would expand operations in all three cities, with an estimated 500,000 to 1 million square feet of office space expected to be ready there for workers starting next year.
It likely will lead to an even tighter housing market – good news for those existing homeowners who probably will see appreciation, not such good news if you’re trying to rent or buy. And it will be interesting to see whether workers begin gravitating in even greater numbers to those areas.
Sioux Falls, not surprisingly, would not have made the short list of contenders, lacking basic criteria such as a minimum of 1 million people in the metro area and an international airport with direct flights to Seattle.
It’s also a little bit of a letdown, no doubt, for the cities that did make the final 20 – places such as Columbus, in my home state of Ohio, or nearby Indianapolis or Pittsburgh – where the Amazon effect likely would have served as a greater catalyst for worker attraction than in places such as New York and Washington, which have abundant workforces already. Of course, that was a key factor in the decision behind locating there.
Amazon estimates 50,000 jobs will be split between New York and Washington.
In Nashville, which is getting a smaller operations center that still will bring an estimated 5,000 jobs, it was interesting to read about how local tech firms now fear losing workers.
An article in the local newspaper, The Tennessean, estimated the city’s unemployment rate in the tech center as “effectively zero” while local leadership rushed to remind the community of the “rising tide” theory and suggested short-term losses would be made up by greater worker migration.
The New York Times ran an interesting column about the decision, quoting Tom Stringer, head of site selection for business consulting firm BDO.
Amazon’s choice, he said,“only reaffirms and cements the idea that we have two countries right now, the coasts and the interior.”
“There’s a herding instinct,” he continued. “People in creative fields — medical research and technology, law, financial services — they all want to be in the same mix. That’s what makes them good. And for companies, their value-added quotient is rare, and it’s what everybody wants.”
I thought about that last week when I spoke at 1 Million Cups, a weekly event highlighting area entrepreneurs. After giving an update on SiouxFalls.Business, I answered questions. The last one asked me to draw on my experience in city government to talk about the direction I believe Sioux Falls needs to go as a community.
Lucky for them it was the last question or who knows how much of the program I might have spent answering it.
Part of my response involved the need to continue to diversify our economy, particularly with what I called next-generation jobs.
While Amazon offers those jobs, so do a growing number of our homegrown companies.
Those are places like SAB Biotherapeutics, which recently opened a “pharm” that’s the first of its kind in the world. If you have not familiarized yourself with this company yet, read the piece below. It’s positioned to take our bioscience economy to a level few likely would have imagined at the start of this century.
Then I told the audience about Farmers Business Network, which we reported last week is planning for a major office campus. The growth options their leaders shared with me include enough space for hundreds of employees.
We just published an update on Carsforsale.com, a tech company that started in the auto industry but is expanding into other tech-related ventures.
I hope that if we amass enough of these companies, large and small, a critical mass of skilled workers will come. People need to know they have options and opportunities in their field at many organizations without having to leave town.
I think this takes all of us doing our part. So last week, we also announced a new program through SiouxFalls.Business called Learn to Launch. You can find out more by clicking below, but essentially it’s a three-hour workshop for those of you considering starting a business or in the very early stages of one.
I firmly believe, and research increasingly has shown, that a community’s best economic and workforce development starts closest to home.
Which leads me to the other “Amazon effect” – and a timely reminder.
From what I’m hearing, this hasn’t been a great fall – certainly not a great October – for many local businesses.
A particularly negative election season, down stock market and unseasonably cold weather aren’t a great combination as far as encouraging customer spending. And, of course, the erosion of in-store sales from e-commerce competitors is an ongoing challenge.
If you’re the exception to this, let me know, but many businesses I talk to kind of look down and shake their heads a bit when I ask how the past couple of months have gone.
I think there are positive signs lately, though. I spent part of our recent 50-something-degree day stopping at many downtown businesses. Almost all had shoppers inside that weekday afternoon, and most told me their business had started to pick up in November.
This is an especially important time of year to support local businesses. As I walked downtown last week, one owner shared numbers with me that showed how critical this upcoming Thanksgiving weekend has been historically for the store.
Please remember to include our locally owned retailers, professional service providers, restaurants and corporations as you make your personal and corporate spending decisions — not just this holiday season but all year.
They are the ones who give Sioux Falls its unique flavor and experience, but they can deliver that only if we support them.
To that end, also consider stopping by the annual 605 Made Holiday Market from 10 a.m. to 4 p.m. Dec. 1 in the underground parking level of Cherapa Place downtown.
You’ll be able to shop for handmade items from more than 60 talented area makers and leave with one-of-a-kind holiday gifts or treats for yourself.
You’ll likely be amazed, as I always am, at the talent we have in our community.
And I doubt you’ll find anything there that can be bought on Amazon.
As Amazon announces the locations of its new headquarters and the holiday season nears, there are multiple reasons to invest in locally grown businesses.