Profs. Discuss Amazon’s Potential Arrival in Atlanta

Atlanta has earned a spot on the list of 20 potential cities for Amazon’s second headquarters. The major company will announce the city it chooses by the end of 2018 and will invest $5 billion into the city with the potential to support as many as 50,000 “high-paying” jobs, according to TechCrunch. The Emory Wheel interviewed Senior Lecturer in Organization and Management Andrea Hershatter, Professor of Marketing Doug Bowman and Senior Teaching Professor in Organization and Management Kevin Coyne, who shared their thoughts on potential benefits and drawbacks of Atlanta winning the bid.

This is part of of the “Round table” series, which aims to clarify and explain modern issues by compiling interviews with individuals who specialize in relevant areas. 

Valerie Sandoval, The Emory Wheel: Is Atlanta a good fit for Amazon’s new headquarters? What makes Atlanta stand out from other cities on the list, such as Washington, D.C., or New York City?

Andrea Hershatter: [Yes,] I do. I think that if you look at the list of things that Amazon has said it is seeking in terms of a vibrant city center, a place where they can have the size facility they want with the talent pipeline. They are in search of a place with proximity to the country’s largest airport, and a city that is willing to grow and accommodate a vibrant corporate player. [Atlanta] has a proven track record across … those dimensions, and it’s receptive to that sort of influx. Atlanta has a more affordable cost of living and a capacity to physically grow and expand in ways that have already been more saturated than those two geographic areas. I think not unlike [the site of Amazon’s current headquarters] Seattle, it’s a medium-sized city full of young people that is a very good match for the culture in which Amazon has already been thriving.

Douglas Bowman: Atlanta seems to do well on public transit. The best thing about Atlanta is we have this sort of capability and logistics — so there’s three [large] companies [headquartered in Atlanta] … UPS, Home Depot and Coca-Cola. With Coca-Cola you’ve got to move products to stores, so that would be a workforce here. Georgia Tech has so many engineers … so that idea of a workforce is in Atlanta’s favor. The other good thing about Atlanta is we actually have some space. If you look at some of the other cities that are on the list and at the size they’re going to need and public transit, it’s not happening. On top of that, Atlanta is relatively affordable compared to some of the other cities. From a branding perspective, one of the knocks that Seattle gets is that they are coastal elites. If you look at the short list there’s very few west of the Mississippi, and we’re east of the Mississippi and in the South. The other thing Atlanta has going for it is the airport. There’s direct flights to Seattle, New York and Boston.

EW: What are the benefits and drawbacks if Atlanta is chosen?

AH: I think the benefits are enormous. One, Amazon itself obviously is a phenomenally interesting employer, not just in terms of the number of people that it hires but also the range of opportunities in terms of engineering, analytics, computer science and all of those things. If you look at all of the business farms that Amazon is involved in, it is really intriguing; retail, of course, and now the whole grocery food and beverage, it creates absolutely fascinating possibilities for an ecosystem to grow up around it. I think in addition to that, there are a lot of signals that … would give [Atlanta] credibility to its current positioning as an emerging ecosystem for entrepreneurially minded, technologically advanced companies. Amazon [would] seal the deal on Atlanta being established. If, in fact, Amazon’s presence creates real estate pressures that drive up rent and housing costs and drive out lower income or affordable housing, that would be a huge drawback. Similarly, traffic and population growth, if not supported by a commensurate increase in infrastructure, would be an issue. Finally, as is the case with any large taxpayer or employer in the city, the city’s health and wellbeing is tied to the health of its largest companies, so Atlanta’s stability would be linked to Amazon’s.

DB: Obviously jobs, and potentially infrastructure. The nice thing is if it is any of those three locations, they’re all sort of primed for revitalization, and so just having Amazon go to any one of those locations would revitalize not just the direct area that Amazon chooses but then sort of the surrounding areas as you get people who want to work and live in close proximity.

KC: The obvious one is 50,000 high-paying jobs that I assume would come over the course of two to five years — they don’t all come in one year. But that’s about two-thirds as many new jobs as Atlanta creates in an entire year. Atlanta creates about 70,000 jobs a year. So from that standpoint, it’s quite good. I think the more important thing is the kinds of people and …  atmosphere that comes with Amazon.

EW: What about transportation effect on Atlanta? Housing prices? Population increase? Demographics?

DB: It’s a sizable chunk of folks coming into town at once. The subway is kind of underutilized … so there would be an opportunity to … develop more public transit options. We’re always kind of playing catch up with some of the other cities. With more people earning fairly sizable incomes you would imagine that housing prices, certainly in the areas around where Amazon chooses, will probably go up. You will probably get more young people, and the nice thing is if you kind of look at the cities they selected it looks like ones where there’s a lot of participation in the workforce, a lot of younger folks, and so you can imagine that Atlanta would sort of be continuing that.

KC: I think it depends entirely on how close the elements of the 50,000 people would be to each other. In other words, if you spread the 50,000 people because there is the administrative center here and the technology center here and there’s the fulfillment center there and they’re all spread out, I think Atlanta can handle it without too much stress. If you instead say, “I want a single campus,” I think it will cause a lot of difficulty wherever it goes because Atlanta’s road system … is near capacity in every major sector of the city, so no matter where you put it, it will make that road system be over capacity and it will cause a lot of traffic problems. Population increase is actually quite small. I calculated 50,000 workers is about 2 percent of what’s in Atlanta already. My guess is the average size of the family for an Amazon worker will on average be smaller than that of those who already in Atlanta just because of the nature of the job and the likely age distribution.  I think it will cause less than a 2 percent change population. Therefore, I don’t think in terms of overall demographics it will shift things very much at the Atlanta scale. In the particular area that it occurs, I think it will cause housing prices for homes in the nearby area and in the sort of nearby but cool areas to go up disproportionally.

EW: Emory was recently annexed into Atlanta — what impact do you think this will have on Emory and the Emory community?

AH: We have so much talent [at Emory], and Amazon is such a rich laboratory for the deployment of a lot of that talent that I would expect to see very good and effective working relationships between the company and the school. I also happen to know some people at University of Washington (UW) and have watched how effective that relationship has been between UW and the company. I think Amazon has proven to itself to be a very good partner to educational institutions.

DB: There’s going to be a lot more people that value education in the city and sort of in the community itself. You can imagine it being a source of jobs for students. There will be the highly technical engineering jobs, but there’s a full gamut that a larger employer like that would bring in. There will be spin-offs, obviously; there will be suppliers to Amazon that could potentially help out Emory.

KC: I think it will take longer to have an effect on the Emory community than most think because it will take time to build it. They’re not going to put 50,000 people here all at once — it’s going to grow slowly over time. But I hope there is an indirect effect where, again, by Atlanta becoming a more entrepreneurial-mindset town, becoming a center rather than a backwater of new economy type jobs. Because, no disrespect to those who do those jobs in Atlanta, but Atlanta is not considered leading edge in those types of jobs. I think it can have an effect on the kinds of students that we draw. I think it can have an effect on creating a more startup culture in the city. It can attract venture capital which Atlanta doesn’t really have a good infrastructure for venture capital … and I think that can have a very positive effect on the Emory community.

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