Evanoff: 50000 Amazon jobs? Wait a minute – The Commercial Appeal
LetÃ¢Â€Â™s say Amazon lands in Memphis.
Fifty thousand workers are hired or move here over the next decade.
Apartments fill up. House prices double. Office rents triple.
The country finds out what we know Ã¢Â€Â“ this is a cool city.
Millennials pour in.
FedEx becomes the metro areaÃ¢Â€Â™s No. 2 employer, behind Amazon.
It canÃ¢Â€Â™t compete with AmazonÃ¢Â€Â™s cheap prices.
WeÃ¢Â€Â™re an Amazon town.
Steaks on fancy menus reachÃ‚Â $80.
Kelly English can make more cash as celebrity chef for Amazon MemphisÃ¢Â€Â™ executive staff. He shuts Restaurant Iris.
Delta crawls back to us with round-the-clock New York, Seattle, Shanghai and Washington non-stops.
St. Jude IT techies jump to Amazon for higher pay.
You overhear the sous chef at Char debate sense-and-avoid flight software in Amazon drones.
Kids flood the University of MemphisÃ¢Â€Â™ engineering school.
Mississippi State University puts a satellite engineering campus in Whitehaven.
Ole Miss reorients the DeSoto County branch to engineering.
NashvilleÃ¢Â€Â™s envious mayor launches the Ã¢Â€ÂœMoon MissionÃ¢Â€Â to mimic our growth.
ThatÃ¢Â€Â™s great. And it gets better.
‘Get into college’
General Electric installs a 3,000-employee assembly line for delivery drones in the Memphis Regional Megasite, the stateÃ¢Â€Â™s long-time boondoggle west of Jackson.
FoxconnÃ¢Â€Â™s flight-software factory opens on the old Firestone grounds in North Memphis. Nikkei MC’s aluminum die cast plant arrives in Bartlet to supply GE.
Taobao, ChinaÃ¢Â€Â™s bigger version of Amazon, puts a hub in Collierville. ItÃ¢Â€Â™s like the Eastern and Western railroads bridging the Mississippi at Memphis a century ago.
FedEx places an order for 100 more jet airliners.
When moms tell their teens, Ã¢Â€ÂœGet good grades or you wonÃ¢Â€Â™t get into college,Ã¢Â€Â™Ã¢Â€Â™ the children pore over the calculus text until midnight.
Shelby County Schools flourish.
Wait a minute, now
This is fun thinking about what if.
No wonder Memphis City Council offered to marshal $60 million in cash.
Memphis joined mayors, governors, senators, schemers and dreamers from around the country offering incentives for AmazonÃ¢Â€Â™s so-called H2Q — a promised 50,000-employee office complex.
Do we have a chance?
IÃ¢Â€Â™d say we could land among the final dozen cities.
But I asked John Lettieri what he makes of all this.
He doubts weÃ¢Â€Â™ll make the short list.
‘Winning the lottery’
Ã¢Â€ÂœWhoever wins it, itÃ¢Â€Â™s akin to winning the lottery. ItÃ¢Â€Â™s a rare event. Most places cannot win,Ã¢Â€Â Lettieri said. Ã‚Â Ã¢Â€ÂœMost places do not have what it takes to win.Ã¢Â€Â
Lettieri isnÃ¢Â€Â™t really an odds maker for this type of thing.
He does have, though, a special insight into both the high-tech economy and how it has left behind dozens of struggling American cities clamoring for Amazon.
“I think Amazon will go to a place that is already doing pretty well,” Lettieri said. “They’re looking for a set of attributes thatÃ‚Â when they’re added up they tend to reward the places that already haveÃ‚Â a lot of tailwind in terms of the local economy and investment in human capital and education.”
Some background: Lettieri, a Wake Forest grad, was foreign policy aide for former Sen. Chuck Hagel, R-Neb. Later he was a vice president at the Organization for International Investment, a kind of chamber of commerce in Washington for high-profile foreign companies. Its backers include Japanese automaker Toyota, German apparel giant Adidas and South Koran industrial conglomerate Hanjin.
Today, heÃ¢Â€Â™s co-founder and senior policy director of Economic Innovation Group, a tech-heavy Washington think tank urging the Trump administration and Congress to reform the U.S. tax code.
Ã¢Â€ÂœThereÃ¢Â€Â™s not much Washington can do specifically for Memphis,Ã¢Â€Â Lettieri said. Ã¢Â€ÂœBut one thing it can do is change the incentives so thereÃ¢Â€Â™s more opportunity for investmentÃ¢Â€Â to flow into Memphis from other parts of the country.
Ã‚Â Regarded as a kind of face in D.C. for rich Silicon Valley entrepreneurs, the Economic Innovation Group was ginned up two years ago by tech financier Ron Conway and Napster file-sharing co-founder Sean Parker, later a prominent executive at Facebook.
Tech firms poured more than $50 million into Washington lobbyistsÃ‚Â last year, with Google leading the way to beat down any threat of anti-trust action against it. Conway and Parker wanted to go beyond the lobbying. They envisioned EIG as a place of new ideas. One of the first subjects the think tank took on was economic growth among U.S. cities.
Recently, the group released its 2017 Distressed Communities Index. Among the 100 largest cities suffering the most economic stress, Cleveland ranked first, one of seven rust belt cities making the Top 10. Memphis placed sixth.
Memphis routinely makes all manner of lists measuring economic failure and human despair. What came to the fore in this EIG study, though, was a point rarely acknowledged.
What holds us down, or rather, what helped pushed us up to No. 6, was the lack of entrepreneurs. This isnÃ¢Â€Â™t the metro area of 1.34 million people under the microscope, this is the city of 657,000 population at the heart of it. Over the years tallied by EIG, the number of businesses open in the city declined by 2.7 percent.
Lettieri, in an interview, mentioned this statistic again and again. The devastating recession ended eight years ago. But wide swaths of the nation have failed to generate new businesses to replace what was lost. Americans are grasping for solutions.
Ã¢Â€ÂœThe solution is really, we think, rooted in entrepreneurial dynamics,Ã¢Â€Â Lettieri said. Ã¢Â€ÂWeÃ¢Â€Â™re a capital-rich country, but 80 percent of the venture capital goes to three states and 90 percent of it in those states goes to white men. Our argument is too many places are missing the boat when it comes to local entrepreneurs and their access to capital.Ã¢Â€Â
Look at all the adults living in the nationÃ¢Â€Â™s most distressed neighborhoods, he said, and more than 41 percent are not working (compared to 32.5 percent in MemphisÃ¢Â€Â™ most distressed Zip Codes, according to the EIG report).
Ã¢Â€ÂœThis is really the fundamental issue of our time,Ã¢Â€Â Lettieri said. Ã¢Â€ÂœIf we donÃ¢Â€Â™t get this right, broad national problems are harder to solve, and local issues are impossible to solve.Ã¢Â€Â
True, Memphis has serious initiatives under way like EPICenter, launched in 2013 to create 1,000 small businesses in 10 years.
But the initiatives all suffer for the lack of capital.
That’s why Lettieri touts a piece of proposed legislation favored by Sen. Cory Booker, D-N.J., and Sen. Tim Scott, R-S.C.
Named the Investing in Opportunity Act, it would spur investors throughout the nation to put money in so-called opportunity zones, and pool capital together among investors to diminish the risk of investing in these zones.
Ã‚Â Is this what we need in Memphis?
I’d say itÃ‚Â looks more promisingÃ‚Â than betting on the lottery.
Ted Evanoff, business columnist of The Commercial Appeal, can be reached at firstname.lastname@example.org and (901) 529-2292.
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