25 January, 2018

The Corporate City Looming Part II: The “smart” City competes

Last week, Amazon.com announced that it has arrived at a short-list of preferred cities for its second headquarters (HQ2), after reviewing the incentives offered from 238 contestants (see Part I of this post). Listed in alphabetical order (it wouldn't want to play favourites), Amazon.com announced that the twenty runners-up that will move to the next level are: 

Atlanta, Austin, Boston, Chicago, Columbus, Dallas, Denver, Indianapolis, Los Angeles, Miami, Montgomery County (Maryland), Nashville, Newark, New York City, Northern Virginia, Philadelphia, Pittsburgh, Raleigh, Toronto, Washington D.C.

Holly Sullivan, on behalf of Amazon was gushing with well wishes: “Thank you to all 238 communities that submitted proposals. Getting from 238 to 20 was very tough – all the proposals showed tremendous enthusiasm and creativity. ... Through this process we learned about many new communities across North America that we will consider as locations for future infrastructure investment and job creation.”

This issue confirms that the search for for a place to build the HQ2 is a striking case of locational choice and related dynamics – a case that reveals current processes and power relations much, much, better than any textbook in economic geography or planning. Even though the shortlist consists mostly of the usual suspects and now doesn’t bear any big surprises, the full list of candidate cities and the different ways they sell themselves was rather revealing in this respect.

And what about the firm? Effectively, Amazon.com "expects" a number of things (nothing is promised, of course): It expects to create 50,000 high-paying jobs and invest over $5 billion in the city where it will open the HQ2; It expects that that the HQ2 will create billions of dollars in additional investment in the surrounding community; It expects to make a decision in 2018.

Furthermore, the firm is well aware that instead of simply bargaining with a mayor and then making a decision, this 2-stage selection process provides much more value in terms of the economy of attention. First, the competition works as a sort of theatrical staging, a huge show that provides massive PR for the firm. Second, it obviously allows another round of exploitation and race-to-the-bottom negotiation with candidate cities. There is much speculation around (and some indication as well) that the price is high for attracting Amazon.com to one's municipality’s territory. The unusually high share of local taxes in the North American system for instance, compared to other parts of the world, offers the right space for manoeuvre. Third, discursive upgrading is part of the story. So as we learn from a critical observer, HQ2 in Washington D.C. wouldn’t be seated in a mere business park, but on a “Campus” to which also an Amazon “University” be added.

So, at the end of the day, tech-firms will not only provide jobs and business solutions, but will actually replace municipalities and states in the process of city-building, infrastructure and higher education policy. It is part of a major transformation that was recently so nicely illustrated by the urban design magazine Bauwelt

Is this the future that we really want?

Markus Hesse and Constance Carr

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