These Amazon HQ2 finalist cities could have an edge on the competition, according to experts

  • In early 2018, Amazon unveiled a list of 20 finalist cities for its second headquarters, HQ2.
  • The company listed a highly educated workforce as an important factor in its decision.
  • The Brookings Institution conducted a study that analyses which HQ2 finalist cities have the most educated millennials.
  • Boston, Massachusetts; Washington, DC; and New York, New York ranked highest in the study.

In January, Amazon narrowed down its top 20 picks for the future home of its second headquarters, called HQ2. The $US5 billion campus will generate 50,000 jobs over the next two decades, according to the company.

In its RFP, Amazon outlined several requirements for prospective cities. These include a population of over 1 million, access to mass transit, proximity to an international airport, up to 8 million square feet of vacant space, economic incentives, and a highly educated labour force.

“A highly educated labour pool is critical and a strong university system is required,” the RFP reads, adding that the location should have “the potential to attract and retain strong technical talent.”

A new study from the Brookings Institution looks at which of Amazon’s top 20 cities surpass that criteria. Analysing the 100 largest metros, the researchers found the locations with the highest percentages of college graduates ages 25 to 34 in 2015.

Just five HQ2 finalists – where over 45% of millennials graduated college – made Brookings’ top 10. They are Boston, Massachusetts (58%); Washington, DC (54%); New York City (47%); Raleigh, North Carolina (47%); and Denver, Colorado (46%).

The Boston area, which ranked first on millennial education, is home to dozens of schools, including Harvard University, Massachusetts Institute of Technology, and Northeastern University. Washington,DC also has several prestigious institutions, like Georgetown University, George Washington University, American University, and Howard University.

Overall, Amazon chose 11 locations with the best-educated millennials in the country, according to the study. The potential HQ2 locales with the lowest millennial college graduate percentages were Los Angeles, California; Dallas, Texas; and Miami, Florida, which all have average college-education levels in the 32% to 35% range.

There’s reason to believe that education will be a big factor in Amazon’s decision. Amazon mentioned education three times as a “key preference and decision driver” in its request for bids. The company also asked cities to include a list of partnerships with higher-education institutions; a list of nearby universities offering computer science degrees; and the number of students graduating with those degrees over the last three years.

The company estimates that the annual salaries for those 50,000 jobs at HQ2 will average more than $US100,000, which means that it will probably hire employees with a high educational level.

The San Francisco Bay Area remains the top spot for STEM jobs in the US, but that growth could be slowing and moving to other regions. From 2006 to 2016, Silicon Valley saw a 33% growth in tech jobs, or around 3% per year. But as The San Jose Mercury notes, that annual rate has declined to 2% in the past two years.

None of the applications for HQ2 in the Bay Area were selected as finalists.

“Clearly, the Amazon finalists are skewed toward places with very high concentrations of college graduate millennials,” the Brookings researchers write. “However, other such places were passed over, presumably in the quest for different qualities.”

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