As I write this, cities are scrambling to get their bid books together to submit to the largest call for proposals in North America, the Amazon HQ2 RFP. On October 19, 2017 literally hundreds of communities, individually, or in collaboration, will have submitted their proposals to Amazon’s review team to potentially win the motherload of investment attraction opportunities. This is a project that calls for 100 acres of urban development land where up to 50,000 highly trained and highly-paid employees could be located, many of which would come to work by walking or by bike from a nearby residence. Others would take a transportation link such as light rapid transit or subway to the site. It would include opportunities for work, restaurants and passive areas for outdoor leisure and play. It would basically seek to emulate their urban and urbane campus in Seattle, that has helped to transform part of Seattle in a new form of corporate urban design. 

In Seattle, Amazon’s corporate urban design initiative was awarded the “City Maker” of the Year in 2017 by the Downtown Seattle Association having been a key catalyst for redevelopment of Seattle’s downtown through attracting restaurants, coffee shops, professional services, and critical mobility infrastructure to service the new campus and nearby neighborhoods. Amazon’s leadership, having become recognized city-makers, are now ready to invest again to make another city in their image with over $5 billion in capital expenditures in several phases over the course of 10-15 years.  

But Amazon’s HQ2 RFP includes many other criteria including a request for incentives, a requirement of a minimum of one million people in their metropolitan area; access to major communications capabilities and to local and international transportation, including flights to Seattle; a stable and business-friendly environment; the potential to attract and retain strong technical talent; and communities that think big and creatively when considering locations and real estate options. They would also prefer to have a “development-prepped site”, encouraging all levels of government involved in the bid “to think creatively for viable real estate options, while not negatively affecting our preferred timeline”. This is site selection jargon to simply say, give us your best shovel-ready real estate option in your community that meets our criteria.  

Accordingly, is your community investment-ready to be able to bid on a major project like this headquarters RFP? For some communities, this is seen as a potential boon for their community’s future. “Winning the FDI lottery” is how one economic development official in Canada explained it. It certainly was an investment win for Seattle. And there is no doubt that a $5 Billion-dollar investment, employing 50,000 people in your community would be a huge infusion of taxable income for the city coffers. Imagine what that could do for the community. Everyone wins. But there is also the argument that should a community win this prize of corporate urban design in their community, there may be an impact and possibly even citizen push-back that investment ready communities avoid. It’s the people factor. On one hand, as much as senior level officials want to win it, there may be the reality that providing a labor supply of 50,000 talented employees, even phased over 10-15 years may be difficult to achieve in many markets, even in large cities that may otherwise meet all the other criteria. The community may have a diversity in industry clusters that a large investment such as Amazon’s HQ2 may negatively impact. I recall the many talented people in India’s services industry such as hotel staff, bank tellers and other service industry employment that were scooped up by the call industry phenomenon, significantly impacting many services and tourism companies in key Indian cities during this period. Dominant companies in specific markets also have a track record of limiting community-wide company diversity and stunting growth of new businesses in their communities, whether through home grown or external investment attraction. For example, RIM (Blackberry) in Waterloo, Ontario attracted much of the talent in the community and any new talent that came to the city looking for employment for many years during their heyday. Similarly, this was the case with Nokia in Oulu, Finland and in Eindhoven, in the Netherlands, with Philips. It wasn’t until Nokia and RIM experienced downsizing in these communities that many talented tech entrepreneurs, who wanted to stay in these communities, emerged to build and thrive with their own companies. And new graduates, inspired by this new wave of entrepreneurialism, flourished as new startups. This added to the momentum and the diversity of companies and growth in a variety of industry sectors in these communities, enabled by technology and new talent that it generated and attracted. In Eindhoven the crisis focused on Philips, the dominant employer in the city at the time. Philips began to relocate key operations to Amsterdam to have better access to talent, which they were having difficulty attracting and retaining. It was a real shock to the civic leadership in Eindhoven at the time, but in the long run, this crisis made their community refocus on their strengths, train and attract talent and create a better overall ecosystem to attract and support investment, jobs and people in their community. These were not planned transformations, but through the experience of managing this crisis they became more investment ready in their communities. As best practices, ICF has been sharing these experiences through ICF’s Accelerator Program with communities around the world so that they too can be more aware of how to become more investment ready. 

A huge employer dangling a golden trophy over communities that may not be investment-ready could have a backlash from other technology firms already in their communities. For instance, in Boston, CEOs from technology firms and venture capitalists are warning that their city already has a massive labor shortage, especially in trying to hire or retain engineers. In Boston, there is the real fear that Amazon’s HQ2 project could effectively “steal” tech talent, claiming that for every computer science grad, there are more than 17 job openings. In Waterloo, for nearly a decade, there were openings for 2000 jobs that went unfulfilled in the tech marketplace. The skills gap was seen as the culprit. Accordingly, the community college and universities are working hard to bridge these gaps, yet the skills gap continues, as in most communities. Workforce remains one of the top issues for companies and local government CIOs. In addition, a recent CDG survey found that up to 10% of the workforce may be lost due to retirements in the next year, heightening the potential for a workforce crisis in the years ahead.

So being “investment-ready” must mean being more than just being “shovel-ready”. Ensuring that a community could accept large investments like Amazon’s HQ2 must include scenarios that avoid “brain drain” to mammoth investors. On the other hand, attracting a new corporate urban design solution to your community could be beneficial, if done right. It could stimulate a community’s start-up ecosystem, inspiring a culture of entrepreneurs to offer services to the giant, but also retain their independence. It could help to encourage more educational institutions to flourish in their community to support higher paying job positions in a variety of fields, including management and administration, legal, social services and other positions often not immediately associated with the tech community, but which heavily depend on being tech enabled to do their jobs. It would also engage local governments to rethink their planning, engineering and economic development strategies to be able to be more investment-ready.

Clearly, only one community will win the Amazon HQ2 bid. But communities that will not have won the main prize should recognize that they have undertaken a massive effort to become investment-ready for other future opportunities. In this, they have already benefitted. It has forced them to consider, first of all, if they even really wanted to make a bid for it. It forced discussion among all levels of government to consider it and in some cases, even if their community was deficient in some of the criteria, they agreed to submit. In some cases, they would dust off their awards, aggregate their community boundaries to become a regional bid and see where it would land them on the list, perhaps using this as a massive benchmarking exercise. Will the proposals be available for all the world to see? That would be an excellent opportunity to witness one of the largest expressions of displaying best practices among all those that submitted their bids. Each community would showcase its top industry clusters, top companies with compatibility to Amazon’s requirements, top educational institutions and the best availability of land-uses and creative landownerships to create a unique 100-acre urban solution. There are not many communities that could cobble together 100 acres in their urban centers to meet these criteria. It would be an excellent North American exercise to be able to share all of the bids! 

Many of the communities that have raised their hands for Amazon’s HQ2 are among the smart cities and ICF qualified Intelligent Communities in North America. These are communities that in most cases have met all, or nearly all, of Amazon’s RFP criteria. They will likely all have, or commit to develop, smart infrastructure: boasting high speed broadband connectivity; public and commercial Wi-Fi hotspot connections; perhaps even pilot projects demonstrating unique applications using fixed and wireless broadband coverage including autonomous vehicle demonstrations, use of drone technology and sensors embedded, and cameras deployed, to monitor traffic, water and air quality. They will likely have transit infrastructure or identify plans for its deployment in and around the 100-acre site; and it may show ubiquitous cycle paths, pedestrian routes and opportunities to connect to urban infrastructure such as waterfronts, parks and other unique geographical or historic artifacts as part of their response. But as our Intelligent Communities know, smart infrastructure is only a start. Putting fiber in the ground and wireless services in the air, complemented by data sensors and its analytics to make their communities “work better” is just the beginning. That is why ICF calls these SMART21 communities. Understanding how a community can become a “better place” for all its citizens, enabled by this smart infrastructure, differentiates them and clearly establishes them as unique “Intelligent Communities”. But having been recognized as a SMART21 community or even a TOP7 Intelligent Community, may not make them truly investment-ready. Let’s take a look at what this might include. 

Beyond all of the infrastructure questions that a site selector may have on his or her list, the question of human capital is probably their greatest challenge. Does the community exhibit the educational institutions from K-12, colleges and universities and other training opportunities to be able to attract investors, be they large like the Amazon HQ2 opportunity or any sized potential investor? Are these educational institutions training the right skillsets to meet future requirements by these investors? Are the skills aiming at homegrown opportunities within the strength of their local industries? Are opportunities and strategies to attract foreign investors being considered? Are children being exposed to science, technology, engineering and mathematics (STEM) and entrepreneurial educational skills? Creating a workforce capable of meeting and adapting to the skills required by future businesses, ranging from health to security to tech enabled industry clusters of all kinds, will be critical in the long-term success of communities everywhere. Are these communities also actively creating the environments to attract, and more importantly, retain the talented human capital? What immediate and long-term strategies are communities implementing to ensure that the talent, vital to their continued success, thrives in their communities? Called “stickiness”, much research has been undertaken to study what retention strategies are necessary to attract and retain human capital beyond the offer of a job. Stickiness includes affordable housing, availability of transit and attractiveness of other forms of mobility, access to high quality educational opportunities for their children and themselves, access to Internet services, and another, often forgotten key factor – “things to do”. Communities with cultural attractions, festivals, markets, parks, sporting facilities, museums, bike trails, heritage areas and gathering places associated with coffee shops, restaurants and entertainment facilities attempt to meet this stickiness test, some more successfully than others. Assisted with good residential density, active student populations and day and night time pedestrian traffic, these opportunities for stickiness often are the difference between communities with a buzz that attracts and retains the talent or those that repel them, especially young talented individuals. Size of the community and affordability may also factor into this. Rural, remote and smaller communities will need to be creative to develop opportunities for their youth. But there are examples of successful rural and small Intelligent Communities in North America that have been able to develop and implement strategies to attract and retain talent are available to benchmark against. Mitchell, South Dakota and Stratford, Ontario are just two of ICF’s Intelligent Communities that have success stories to share. There are many more Intelligent Communities that have positive stories to be inspired by and metrics to benchmark against.

With smart infrastructure and smart people, communities can begin to foster creativity and innovation. But do these communities have the ingredients that create a vital ecosystem for them to establish innovative, thriving businesses? Building a vibrant and successful ecosystem must include everyone in the community, especially requiring a unique mix of government, educational institutions and private sector involvement. Securing venture capital, funding for facilities, operations and mentorship, making structures available and developing activities for social and professional engagement are only a start. Helping to nurture local startups and supporting soft landing opportunities for foreign investors is also only the tip of the iceberg. Helping to secure longer term funding, grants and building pathways to commercialization and export are also crucial. Promoting startup districts and marketing extensively cannot be underestimated. Building channels for internships, developing skillsets needed for the entrepreneurial challenges of early and later stage companies, creating and enabling a sharing culture along with opportunities for collaboration and open innovation are all helpful elements in an intelligent community. Through success, these homegrown or FDI inspired companies will no doubt help to build the community’s reputation and prosperity. 

With prosperity comes responsibility and the need to share opportunities for wealth creation with the rest of society. This should include opportunities to educate the less fortunate members of our society, the homeless, single parents, the aged and the disenfranchised; provide opportunities for digital engagement in all forms across the community and make it culturally appropriate. It should also be possible to make it a fun and exciting opportunity, rewarding in many ways, from applauding improvement, to recognizing true achievement, and to celebrate success, such as attaining a scholarship or degree or securing a new job. Digital literacy and making a larger proportion of the community excel in overall literacy is the hallmark of an excellent Intelligent Community, and one in which investors will take note.

Achieving high marks in sustainability and resiliency in a community will not only be beneficial for the community and its children, it will also attract and retain investors who recognize the benefits of clean air, clean water and a culture dedicated to recycling and other environmental traits. It also speaks to the society, recognizing its stability and sense of community. It’s also good for business to be in a community that plans ahead to consider potential known risks as well as potential unimagined crisis and calamity.

Investors also want to understand the community’s leadership, their ability to cooperate and collaborate among different sectors and stakeholders in a community, and their ability to be creative and engage with new opportunities. They will also want to know how well a community and its leaders communicate and listen to their citizens. Citizen engagement, strong public policies advocating for the very best possible for their citizens and community at large, and exceptional advocacy, promoting their community and opportunities for their citizens, will be key investor questions that many Intelligent Communities usually do very well to answer

These Intelligent Community criteria are an excellent platform to attract venture capitalists as well as foreign investors. Many of ICF’s Intelligent Communities will likely be utilizing these as a base from which they might position their Amazon HQ2 bids. For instance, Columbus’ bid to the Department of Transportation (DOT) for their Smart City Challenge win in 2016 in part was due to their experience winning the Intelligent Community of the Year the year before. According to the Deputy CIO involved with the bid at that time: “The Columbus DOT win gained momentum through being recognized by ICF as the Intelligent Community of the Year in 2015 because of its foundational work on broadband infrastructure, focus on neighborhoods, and a strong public-private partnership eco system.” However, as much as these communities might use these to respond to an RFP by investors, are they utilizing them to their benefit by leveraging their brand? Becoming a recognized SMART21 or other level of Intelligent Community allows bragging rights to these communities that they have achieved this unique recognition. Gaining a SMART21 or TOP7 designation is not easy. It can take a whole year and many hoops to achieve these designations, especially as Intelligent Community of the Year. Communities that have aggressively utilized their Intelligent Community status, at any level, have gained substantially in investment attraction and global recognition. For instance, Eindhoven in the Netherlands (Intelligent Community of the Year in 2011), has promoted their ICF recognition extensively in concert with repositioning their image to attract trade and investment as well as attract and retain talent. Similarly, Stratford, Ontario promoted itself as an Intelligent Community to attract new investment and pilot projects to their community. There are 160 such Intelligent Communities globally, potentially able to benefit from the brand. But are they fully utilizing it to their benefit? ICF’s Accelerator Program can help communities to learn how they can better position the ICF brand to attract investors, including Foreign Direct Investment (FDI).

Given that only one winner will come out of the Amazon HQ2 RFP, communities should not be disheartened and pack up their bid-books. Instead they should utilize them as an opportunity to renew their long-term planning strategies, ensuring that their smart infrastructure is shovel -ready and their Intelligent Community is investor-ready. Take for example the recent approach taken by Waterfront Toronto. After more than a decade planning an “Intelligent Waterfront”, they developed a plan to attract a partner technology investor to work with them to create a part of the Toronto Waterfront as a testbed for unique solutions to critical challenges in the community and for solving challenges around the world. Their long-term plans led to Waterfront Toronto putting out a unique RFP in March 2017 for a portion of their development lands, called Quayside. After meeting with many potential suitors, Waterfront Toronto, which won the Intelligent Community of the Year for Toronto in 2014, selected Sidewalk Labs, an Alphabet company, to be their partner to transform 12 acres of waterfront lands into a testbed of unique opportunities. This will be only the initial step of a master plan to revitalize and redevelop another 750 acres of Toronto’s Portlands. Paced, methodical, and strategic planning that engages all levels of government, institutions, private sector and citizens is called a quadruple helix. It works. This is what Waterfront Toronto, a well-positioned Intelligent Community, announced on October 17, 2017. “Sidewalk Toronto”, as it will be called, will develop Quayside as a testbed, engaging Google as its first tenant and working closely with the City of Toronto and George Brown College, an early resident along the East Bayfront properties. More will be heard from this amazing initiative over the next several months and years.

Clearly Waterfront Toronto’s approach to attract a major investor utilizing all its assets and knowledge through a well thought through plan differs from the approach that communities are undertaking in response to the Amazon HQ2 RFP. Not every community will see the Amazon approach as beneficial for their communities. For instance, San Antonio’s Mayor wrote in a letter to Amazon CEO Jeff Bezos that “blindly giving away the farm isn’t our style.” The San Antonio Chamber also remarked that the race for incentives will make it challenging for a city that has limited resources to compete. San Antonio’s senior representatives indicated that they recognize that their problems are not because Amazon told them that they needed to work on them. Their issues around transportation, airport, educational attainment levels go back 40 years.  “Economic development is not about dollars and free land anymore. It’s also about how well a company feels that your community is able to carry forward the momentum of their company’s ethos.” So, do you think your community is shovel-ready? And how well do you think your community is truly investment-ready?

Want to be investment-ready?

Check out ICF’s Community Accelerator

If your community is interested to learn how to become truly investment-ready as an Intelligent Community, ICF’s Accelerator Program is an excellent place to start. Learn about key best practices, benchmark your community against the metrics of your domestic and global competition, be inspired by the presentations and hands-on workshops and learn all year long through personal mentorship of an ICF Co-Founder or ICF Fellow as you develop your own strategic plan to become an Intelligent Community that is investment-ready.

For more information on the ICF Community Accelerator Program and to see if it is the right fit for your community’s current efforts, please contact Michael at michael@intelligentcommunity.org

Want to have a voice in iCommunity.ca, the official newsletter of ICF Canada? Please send your blogs, announcements and other interesting content to John G. Jung at  jjung@icf-canada.com

 

ICF Canada   1310-20 Bay Street Toronto, Ontario M5J 2N8  www.icf-canada.com
Contact: John G. Jung at jjung@icf-canada.com 1-647-801-4238 cell

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