We Are Not Lost – Amazon Gave Us a Map

By John Gnuschke, Ph.D., Director,  Sparks Bureau of Business & Economic Research
The University of Memphis

Memphis is a long shot in the race for the location of the second headquarters of Amazon, but sometimes long shots win. However, win or lose, Amazon has given Memphis a great gift--a map that will define the future of the city.  Follow the map and the city either wins this race or the next one.  Don't follow the map and the city will be lost and disappointed. 

Sometimes Memphis seems lost and incapable of competing in an increasingly complex global economy.  Sometimes Memphis forgets that defining its future depends upon investing in the present.  Sometimes the demands of today obscure the path to tomorrow.

Memphis wants and needs employment and income opportunities such as those Amazon promises.  Putting the Amazon opportunity in context, if Memphis had created 3,000 net new jobs per year for the last 17 years, 51,000 jobs would have been created.  If Memphis had achieved the goal of 10,000 net new jobs set forth by the Memphis 2005 plan for the city, three Amazon-sized businesses or 170,000 new jobs would have been created.

Memphis can use its assets to change the city's path to a future of promise and prosperity.  The future of the city need not be defined by the past.  The future of Memphis is yet to be determined. The future will depend upon how the city prepares to meet the changes that are taking place today and those that will be taking place tomorrow.  The city's future will depend upon its ability to "just follow the Amazon map."

Amazon's list of demands should be an integral part of any Memphis plan for the future.  Amazon listed a number of major areas of interest that are key components of the map.  They were:

1.       A high quality university with strong programs in technology;

2.       A high quality public transportation system and an attractive site for the headquarters;

3.       High quality, affordable air transportation to primary market cities, including Seattle;

4.       A great quality of life and an attractive city for technology professionals;

5.       A well-trained labor force available to fill their jobs; and finally,

6.       An incentive program that makes the deal attractive.

Most research would suggest that the key factor in the location of Amazon will not be the incentive package provided by the city.  Amazon and other employers know that incentives cannot offset the absence of the other factors.  The most important factors in location decisions are related to the labor market and the attractiveness of the city.

Memphis can respond to every aspect of Amazon's wish list.   The quest for employers and jobs is a long one, but we have time to prepare for the future if we begin now.  For example, formal ties can be made to the University of Memphis and other local higher education institutions that enable the university system to develop programs and prepare the labor force needed by Amazon.  Amazon will not start with 50,000 jobs but may grow to that employment level over time.  Time is the key factor in meeting their needs and the needs of other employers.

We have time to respond to other aspects of the Amazon plan. The absence of direct flights to major cities should not be a barrier for Memphis.  City-to-city connections around the world can be purchased on an as-needed basis.  Memphis has a high-quality airport and the ability to customize its service mix to meet the needs of any employer. The airport area is perfect for transportation and logistics businesses seeking to be connected with the world yet needing to be protected from the pressures of larger, more complex cities. Easy access to the airport and abundant building sites should provide Amazon or other employers with great locations that minimize transportation, housing, and other issues.  The low cost of living in Memphis makes Memphis attractive for Amazon and other employers currently located in high-cost cities like Seattle.

Every employer considering expanding in or relocating to Memphis can be expected to present the city with a similar list of demands. A quality labor force, an attractive community, good transportation--both public and private--a quality building site, and tax incentives are common components of demands employers make. 

This list of demands is precisely the road map Amazon has provided for Memphis.  The map is not new--in fact, it is the latest version of a very old map.  The Memphis Chamber of Commerce, EDGE, the mayors, and all of our elected officials are familiar with the list.  The map is cut in stone--hard and fast--but it is sometimes hard to follow.  Educating and training workers without jobs takes a leap of faith.  Without jobs, our human capital feeds the growth of other communities such as Atlanta, Nashville, and Denver.  Making Memphis more attractive to employers requires creative thinking and a commitment to following the map. 

Memphis can create its own map with many of the directions identified by Amazon.  Memphis must build on its assets and knowledge about the changes taking place in a global economy. The Memphis map must identify the investments that the community must make to compete for Amazon and other employers.  If Memphis follows the map, the city wins no matter what happens with Amazon.