A year ago today, Amazon announced its plans for a second headquarters, HQ2. The announcement kicked off a bidding war among American cities, all competing for the jobs and prestige Amazon would bring to town. In January 2018, Amazon announced that it had narrowed down the potential sites for HQ2 to 20 cities. Today, we’ll explore the five cities ranked most likely to win the Amazon HQ2 lottery to see how their relationship capital stacks up.
The Contenders for Amazon HQ2
The list of finalists for Amazon HQ2 includes 19 US metropolitan areas and one in Canada: Boston, MA; New York, NY, Newark, NJ; Pittsburgh, PA; Philadelphia, PA; Montgomery County, MD; Washington, DC; Raleigh, NC; Northern Virginia; Atlanta, GA; Miami, FL; Austin, TX; Dallas, TX; Los Angeles, CA; Nashville, TN; Denver, CO; Chicago, IL; Indianapolis, IN; Columbus, OH; and Toronto, ON. Business Insider aggregated seven expert rankings and identified the five cities with the best chance to be the location for Amazon HQ2. These cities are:
- Denver, CO: Experts at The New York Times cited Denver’s affordability, young tech talent, and thriving start-up scene.
- Washington, DC: DC’s quality of life earned high marks from experts.
- Austin, TX: Austin is a top contender due to its low cost of living and high quality of life, combined with Texas’s business-friendly environment.
- Boston, MA: Boston’s concentration of highly-skilled tech workers, powered by the nearby presence of Harvard and MIT, work in its favor.
- Atlanta, GA: Atlanta, the #1 contender on Business Insider’s list, has “a deep and rapidly growing tech talent pool,” low cost of living, and a “long-standing presence of companies with leading supply chain technology.”
Each of the top cities on this list – as well as the fifteen other finalists – has much to recommend it as a location for Amazon’s second headquarters. But how do they compare in terms of relationship capital, the intangible asset that makes businesses and communities successful? To explore this question further, we used RelSci data to analyze each city’s connections in two key areas: (1) connections to technology leaders and (2) connections to Amazon.
A Thriving Tech Scene
Business Insider’s ranking cites a thriving tech scene as an advantage of Denver, Boston, and Atlanta. One way to measure a city’s tech scene is to count the number of tech companies headquartered in the area. RelSci’s database of influential companies includes:
- 592 technology companies in Austin
- 439 technology companies in Atlanta
- 419 technology companies in Boston
- 244 technology companies in Denver
- 171 technology companies in Washington, DC
On this metric, Austin is a clear front-runner. A second way to look at a city’s tech scene, however, is to explore the relationships the city’s business leaders have within the tech community. A city with tech-friendly business leaders will generally be a more welcoming environment. RelSci data on the relationships between CEOs in each city and CEOs of technology companies shows that Boston comes out on top.
- Boston. Boston’s CEOs have direct relationships to 4,716 tech CEOs. The most connected CEOs in Boston are Peter Y. Chung, CEO and Managing Director of Summit Partners; Les Yetton, CEO of Deep Information Sciences; and Ram Metser, President and CEO of ScaleBase.
- Austin. Austin’s business leaders are not far behind Boston’s, with relationships to 4,375 tech CEOs, including IBM’s Ginni Rometty and Apple’s Tim Cook.
- Atlanta. Atlanta’s CEOs connect to 3,541 distinct tech leaders. Foundation Capital founder Bill Elmore, a well-connected player in Silicon Valley, also heads up Coca Cola Ventures in Atlanta.
- Washington, DC. DC’s CEOs boast 2,968 tech CEO connections. Heavy hitters like Washington Capitals owner Ted Leonsis and former AOL CEO Steve Case top the most connected list for DC.
- Denver, CO. Despite its thriving tech scene, Denver ranks last on this metric, with only 2,151 connections to tech CEOs.
How the Top Finalists Connect to Amazon
Locating in a city that’s plugged into the tech world isn’t the only factor that will help Amazon HQ2 succeed. Wherever Amazon decides to build its new headquarters, it’s going to have a noticeable presence in the city, so it’s important that the city’s business and political leaders have a good relationship with Amazon itself. Again looking at each city’s CEOs, we examined their connections to Amazon executives and board members. To account for political leadership, wee also checked for relationships between Amazon and each city’s home state governor.
Using RelSci’s Path Finder tool to find connections between Atlanta and Amazon surfaces Eric B. Hinkle, President and CEO of Ionic Security. Amazon’s investment in Ionic connects Hinkle to its corporate leadership, and he has a particularly strong connection to Jeffrey Wilke via mutual career history at Honeywell International.
Other Atlanta executives have strong connections to Jeff Bezos via intermediaries in the finance world.
Georgia Governor Nathan Deal, an attorney who has been in politics since the early 1990s, connects to Bezos through former Delaware Governor Jack Markell. Markell sits on the board of the Bezos-owned Graham Holdings (formerly the Washington Post Company), and formerly served on the Southern Regional Education Board with Deal.
Austin’s business leadership recently became much closer to Amazon following Amazon’s acquisition of Austin-based Whole Foods Market. Although there have reportedly been some tensions between the two companies, Whole Foods CEO Jeff Mackey reports that he’s all-in-all pleased with the relationship, saying that while he doesn’t love everything about Amazon, “I love like 98%.”
Business Insider’s recap gives Texas’s business-friendly environment credit for Austin’s high rank on their list. Texas Governor Greg Abbott embraces this reputation, proclaiming proudly on the governor’s office website that CNBC named Texas “America’s Top State for Business” in 2018. Unfortunately for Austin’s chances at an Amazon headquarters, RelSci’s Path Finder doesn’t reveal any close connections between Abbott and Amazon executives.
RelSci reveals a number of direct connections between Boston’s business leaders and Amazon executives. Many are via investments,as Amazon has invested in a number of Boston-area-based technology companies, including Acquia, Basis Technology, and Sonian.
Unlike some of his fellow governors, Massachusetts Governor Charlie Baker has a background in business. In between stints in politics, he served as CEO of both Harvard Vanguard Medical Associates and Harvard Pilgrim Health Care. Baker has several paths to Jeff Bezos via his involvement in the insurance industry, including a connection through former Amazon CFO Thomas Szkutak.
Boston has benefited from Amazon’s investment in the past. Could Amazon’s new headquarters be in its future?
Several high-ranking former Amazon executives have gone on to careers in Washington DC, creating strong ties between the city and the company. For example, Nuala O’Connor, President and CEO of the Center for Democracy and Technology, recently worked at Amazon as Vice President of Compliance and Consumer Trust. As in Boston, Amazon has invested heavily in the DC tech scene, including an investment in online marketplace LivingSocial.
DC doesn’t have a home state governor, but DC mayor Muriel Bowser does have a connection to Jeff Bezos via Don Graham at Graham holdings.
Denver has fewer direct connections to Bezos and Amazon than its competitor cities. Denver’s executives are still well-connected in the tech world, however, and could easily secure an introduction. Jacqueline Hinman is President and CEO of CH2M Hill, an engineering and environment consultancy headquartered in the Denver suburb of Englewood, CO. Her high-profile connections include J.P. Morgan’s Jamie Dimon, former Xerox CEO Ursula Burns, and Johnson & Johnson CEO Alex Gorsky, all of whom have a direct path to Jeff Bezos.
Colorado Governor John Hickenlooper, like Charlie Baker in Massachusetts, has a background in business. Hickenlooper founded Wynkoop Brewing Company in 1988 after leaving the petroleum industry. His connections to Amazon, however, are all several degrees removed.
Which Contender Has the Most Relationship Capital?
Each of the top five contenders for Amazon HQ2 – Denver, Boston, Austin, Atlanta, and Washington DC – can make a strong case for why Amazon’s second headquarters should be located there. Looking at two key dimensions of relationship capital, however, Boston, Massachusetts emerges as the front runner. Boston is home to a lot of tech companies, and its business leaders are well plugged into the tech community. Amazon has repeatedly demonstrated an interest in Boston’s tech scene, investing in many of its start-ups and enabling the city to build relationships with Amazon executives. And although Massachusetts isn’t considered the most business-friendly state, Governor Charlie Baker has a business background and some potential connections to Amazon and Bezos.
RelSci’s platform enabled us to explore the key players in these five cities and examine their relationship capital. Want to learn more about how RelSci can help your firm do business with important decision makers? Request a demo today and discover how your organization can maximize its relationship capital.