The ReSET - Amazon Fever

9/18/17

Newt Fowler

Baltimore is jockeying with other jurisdictions for HQ2 – the new Amazon headquarters. The news this past week that Goldman Sachs is banking Sagamore’s Port Covington development makes this waterfront location a shovel ready contender. Incentives, workforce, accessibility are all going to play into the decision. But we have less than six weeks to figure out what can we do to win.

We’ve Made our Bed. Amazon recently opened a massive distribution center here and its logistics are tied closely with BWI Airport. Hopefully we have been obsessively, maniacally focused on addressing every need that facility has. Logistical solutions, workforce, transportation, regulatory hiccups, it doesn’t matter. Hopefully we haven’t waited for the problem to come knocking. Have we done everything we can to ensure they have the quality workforce they need? Have we removed very logistical delay we can from the moment a package is sealed to when it’s on a plane? Doesn’t matter what the challenge is – our paradigm hopefully has been that our public, nonprofit, corporate, educational sectors ensured that Amazon had such an exceptional experience in Maryland that it’s a no brainer that we should be top of the list for headquarters. They should already know what it means to do business in Maryland.

Create a Living Lab. Carnegie Mellon could have declared war when its autonomous vehicle research team was poached by Google. It didn’t. Instead the Pittsburgh region focused on how to turn a setback into an opportunity. While it freaks many residents out, Pittsburgh embraced Google’s desire to use its streets as an autonomous vehicle testbed. The result has been an ever-expanding presence by Google in the Steel City, with an influx of companies and talent focused on this next chapter in transportation.

What does this have to do with Amazon’s headquarters and Baltimore? The jurisdiction which creates an environment that embraces the innovation needs of Amazon should win. We should know what’s going to drive the future of Amazon as well as they do, and ensure we’re creating a regional culture symbiotically engaged in realizing it. Logistics? Drones? Smart transportation grids? Autonomous vehicles? A/I? Big data analytics? Can we convince them that our public sector will be a fast track test bed for such technologies? Can we commit to entrepreneurially intertwine the research talent at Hopkins and Maryland’s university system with their research?Can we align our startup tech community to engage in creative solutions?Can we demonstrate that we’ll obsessively address the challenges and opportunities in their future as if they’re ours – as hopefully they will be?

Reverse Those Incentives. What would I do if I were Amazon? As part of the package, how about a reverse incentive – a formula based on Baltimore City’s success in employing our less advantaged residents, reducing crime, improving schools and fixing transportation (at least to Port Covington). Amazon receives fewer dollars the better we fix these problems; if we come up short of the negotiated outcomes, they get more... Might be an interesting use of Social Impact Bonds. Richard Florida talks about how tech companies should own the solutions to the new “urban crisis” they’ve helped create. Amazon has a prime opportunity to profoundly change whatever community it expands to – beyond the inevitable increased cost of living and gentrification – why not have the incentives sought improve not only their bottom line but that of the community they’re going to live in? Six weeks isn’t a lot of time to figure out how to envision the next city that Amazon will profoundly reshape. But Amazon has the rare chance to recalculate a region’s double bottom line from their arrival, the likes of which we haven’t seen. Ironically Amazon might be just what we need to effect real change around here if they’re willing to think differently about the incentives they would consider.

With more than 30 years’ experience in law and business, Newt Fowler, a partner in Womble Carlyle’s business practice, advises many investors, entrepreneurs and technology companies, guiding them through all aspects of business planning, financing transactions, technology commercialization and M&A. He’s the pastboard chair of TEDCO and serves on the Board of the Economic Alliance of Greater Baltimore. Newt can be reached at nfowler@wcsr.com.

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