Cities battle to be home to Amazon's second headquarters

But prominent Canadian entrepreneur warns about becoming a "branch-plant" economy
FILE - In this April 27, 2017 file photo, construction continues on three large, glass-covered domes as part of an expansion of the campus in downtown Seattle. Amazon said it will spend more than $5 billion to build another headquarters in North America to house as many as 50,000 employees. (Elaine Thompson/Associated Press)

Right now, all across North America, dozens of cities are in the midst of a stiff competition. Only one will emerge triumphant and only then will its citizens be able to shout from their rooftops: "We're number two, we're number two!"

The silver medal at stake here is not the honour of hosting a World's Fair or the next Olympic Games. No, these cities are all vying to become the home of Amazon's second headquarters.

Amazon has invited interested cities to submit proposals outlining why they should be the homebase of "Amazon HQ2." The tech giant says its new digs will be on par with their current campus in Seattle. It could include as many as 50,000 high-paying jobs and they expect to invest over $5 billion in construction.

And that seems to have created a gold-rush mentality, with city officials in the United States and Canada trying to convince the company that their city would be the prime location.

So what lengths are cities going to in order to attract Amazon? Well, Tuscon, Arizona sent a six-metre-high cactus to Amazon CEO Jeff Bezos. The company tweeted that they can't accept gifts, "even really cool ones," and donated the cactus to a desert museum.

In the New York Times the mayor of Ottawa, Jim Watson, likened the whole competition to "The Amazing Race" and he raced down to Amazon's Seattle headquarters to get a better sense of the company's needs.

But not everyone is amazed by this race. One Canadian entrepreneur and venture capitalist thinks Canada should not be rolling out the red carpet.
Anthony Lacavera (Kathryn Hollinrake)

Anthony Lacavera founded Wind Mobile. Now, he's the chairman of Globalive Capital and an advisor to the University of Toronto's Creative Destruction Lab and Ryerson's DMZ, two of the country's top tech-startup incubators.

Anthony believes that being too welcoming to American tech giants could turn Canada into a branch-plant economy. And he thinks that may not have a happy ending for Canada's tech sector. His new book is called How We Can Win -- And What Happens to Us and Our Country If We Don't.

"In hockey," Anthony says, we are expected to win the gold medal. "So why are we competing for bronze in business?"

He says Canada needs to get out of a "branch-plant" mentality and assert its confidence in technology and other sectors. The examples of this have been few and far between; there has never been a Canadian car, for example.

However, both RIM and Nortel, despite ultimately losing their preminence, proved that Canadian companies could scale to dominate their markets worldwide, and he argues we should be pursuing their models, rather than ceding to American companies.

In the Amazon HQ2 case, it will require some 50,000 highly-skilled tech workers, and could dampen the Canadian tech industry simply because it would lure talented workers away from existing Canadian companies, Anthony adds.

Craig Patterson (University of Alberta)
Craig Patterson
, the director of Applied Research at the University of Alberta's School of Retailing, adds there are few places in Canada that could absorb the dramatic increase in population Amazon HQ2 would impose. He says the impact on housing prices could be dramatic.

Vancouver and the Toronto area are the most likely candidates, he says, but Vancouver's proximity to Seattle, where Amazon is based, limits its viability as a second base.

He says Toronto would be the most likely Canadian city to be chosen.


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