Amazon and Apple couldn’t have taken two more drastically different approaches when choosing where to build a second campus and create thousands of jobs.
Apple announced on Thursday it will invest $1 billion to create a new campus in Austin, Texas, that will initially add 5,000 jobs, but have the capacity to grow to 15,000. There was no public battle between cities to see who could throw the most tax incentives at Apple, nor were there promises from local politicians to change their first name to “Apple” if they won the campus.
By contrast, Amazon’s highly publicized search for a second headquarters has been called absurd, a beauty pageant, a game show and a farce, among many other choice descriptives.
“The amount of hours and time spent by the public sector [to try and win Amazon] was a lot. I find it to be disrespectful, in that regard,” said Andy Levine, president and chief creative officer at Development Counsellors International, a firm that specializes in economic development marketing. “I’m a fan of the Apple approach. It’s much more respectful to the communities.”
Twitter users also noted the stark contrast between how two of the most valuable companies in the world handled their search for a second home.
When Apple announced its intention to invest in a new campus outside of its Cupertino, California, headquarters earlier this year, Chief Executive Officer Tim Cook said he didn’t want it to turn into a contest, where there was “a winner and a lot of losers.”
In the case of Amazon, there were 236 losers. The company accepted 238 proposals, narrowed it down to 20 in January and then announced in November that it will split HQ2 between New York City and Northern Virginia, leading some people to wonder whether Amazon made its choice a long time ago and was simply playing the game to squeeze more benefits out of cities.
Some of the publicity stunts cities pulled may have been seen as “a public embarrassment,” said Patrick Moorhead, principal analyst at Moor Insights & Strategy. However, the outsized impact that the new campus promises to bring to its new home city does mean “very different proportions,” he noted.
Amazon committed to invest $5 billion in its new headquarters and create 50,000 new jobs. While Apple’s investment of $1 billion and the capacity for as many as 15,000 new jobs is a big deal, it’s just a fraction of Amazon’s investment.
Moorhead said it’s likely Apple already had a shortlist of cities. The iPhone maker also already has 7,000 employees in Austin, its largest site outside of Cupertino, so it was in already in a position to “try before you buy,” said Moorhead.
When it comes to Amazon, “the way they did it was necessary,” said Moorhead. “I don’t think they asked for TV commercials, but that was the way that ended up. I feel like Amazon had to get the data it needed in order to make a decision.”
For all of the hoopla generated by Amazon’s search, Levine said the company likely made a shrewd business decision by keeping its HQ2 search so public.
“Maybe they were negotiating more effectively by having a public auction,” he said.
