Amazon HQ2 Ditched In New York — How Will B-Schools Be Impacted?

THE PRESCIENCE OF VIRGINIA DARDEN

In its statement, Amazon, which is based in Seattle, noted that it already has more than 5,000 employees in Brooklyn, Manhattan, and Staten Island, “and we plan to continue growing these teams.” Meanwhile, the company’s plan to locate the other half of “Amazon HQ2” in Northern Virginia and an operations hub outside of Nashville — which never met the level of sustained opposition of New York — will continue. And now, instead of finding another city to replace New York, Amazon says it will simply move its entire HQ2 to the Northern Virginia site.

It’s unclear whether that means 50,000 jobs for Northern Virginia or the originally planned 25,000 — Amazon says only that it will “continue to hire and grow across our 17 corporate offices and tech hubs in the U.S. and Canada.” But if all the jobs end up outside Washington, D.C., that’s a further boon for the Darden School of Business, which in 2017 opened up a base in Rosslyn, in the metro area, that is walking distance from the Crystal City location of the future HQ2. It’s a move that seems incredibly prescient for Darden. “I didn’t have inside information in any way, but I think it’s a great decision by Amazon and we’re delighted,” Scott Beardsley, dean of the Darden School, told P&Q last year.

Over the last three years, Amazon has taken on 43 interns and 35 full-time employees from Darden; overall in that span, 22% of the school’s internship class and 16% of its MBA grads have gone into tech-related roles. But, Beardsley says, the thing to remember about Amazon is that it’s so massive, it’s not just a tech company. “Amazon in 2017 and 2018 was number one and number two in recruiting at Darden,” Beardsley told P&Q in November 2018. “We have roughly 100 alumni who are working at Amazon, as far as I know. They are a very strong recruiter, along with some other technology companies, across different parts of their business. We have a great relationship with them in the MBA, and the executive MBA that we teach out of our D.C. area.

“Amazon said they are hiring 25,000 people — well, those are usually very talented people. I think this will be good for prospective students, for current students, and for alumni of Darden, but also other top universities. But we need to remember that Amazon is quite the diversified company. We can call them ‘tech,’ but they’re also a retail company, they’re also a tremendous transportation and logistics company. They offer jobs in a wide variety of roles — we call it a ‘tech’ company but it goes way beyond that.”

WAS NYC THE MAIN LOCATION, OR WAS NORTHERN VIRGINIA? 

Greg Fairchild was named Virginia Darden’s first director of Northern Virginia operations in May 2018. Six months later came news that Amazon would move half its HQ2 into the region. The Isidore Horween research associate professor of business administration at the Darden School noted last fall that a strong percentage of Darden’s graduating class takes jobs in the mid-Atlantic region — basically, Maryland, Virginia, or Washington, D.C. — every year. He said he expects that number will rise in time, and Amazon will be the reason.

Contacted in the wake of Amazon’s withdrawal from New York, Fairchild was optimistic about the impact on Northern Virginia — even though many questions remain. Among them: Was New York to be the main location between ostensible equals, or was Northern Virginia? The answer, obviously, has implications going forward.

“One of the advantages of holding a competitive bid process is that a number of attractive options were generated,” he says. “These of course included the announced Northern Virginia and New York locations, but also included Nashville. Whether there is an implied ranking in their choices isn’t clear — in fact, it’s very likely there were categories of preferences and various cities/locations fell into those.”

OPTIONS FOR AMAZON GOING FORWARD

Amazon, Fairchild says, now has a few options:

• Revisit prior discussions with other states/locations that could meet their needs;

• Reconsider the scope and magnitude of the existing relationships with Virginia and Tennessee, in which case existing subsidies/co-investments with these locations would need to rediscussed — “for example, our Northern Virginia location may be able to absorb more new employees and infrastructure investments. More relevant to our work, associated academic degree production may need to be increased”; and

• Enhance and increase development in Northern Virginia or Tennessee without regard to additional subsidy.

“Any of these,” Fairchild says, “will take time and may slow their development/expansion plans.”

He adds that regardless, with Virginia moving into a preferred singular position as the only HQ2, “we remain well-positioned to respond to their educational and research needs — certainly in our existing programs at Darden, but also in programs across the University of Virginia which are expanding in the region.

“These will of course involve collaborations, including with our newly announced $120M School of Data Science. The opportunity for hybrids abound.”

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