Amazon's HQ2 (A)

Karen  Mills; Jan W. Rivkin

Case | HBS Case Collection | February 2018 (Revised August 2019)

Amazon's HQ2 (A)

Abstract

In September 2017, the Internet giant Amazon announced that it aimed to open a second headquarters in some city other than Seattle, its current home base. By 2032, the company projected, this “HQ2” would be home to as many as 50,000 high-paying tech jobs and up to $5 billion of investment. The company invited North American cities to submit proposals to be the site of HQ2. The announcement set off a flurry of activity across the continent as civic leaders scrambled to prepare proposals by Amazon’s deadline. The case allows students to debate what companies should ask of cities and what cities should ask of companies.

Keywords: economic development; headquarters; local government; incentives; Business Headquarters; Business and Government Relations; Development Economics;

Language: English

Format: Print

14 pages

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Citation:

Mills, Karen, and Jan W. Rivkin. "Amazon's HQ2 (A)." Harvard Business School Case 718-494, February 2018. (Revised August 2019.)

Article | Research Policy | October 2020

The Supply Chain Economy: A New Industry Categorization for Understanding Innovation in Services

Mercedes Delgado and Karen G. Mills

An active debate has centered on the importance of manufacturing for driving innovation in the U.S. economy. This paper offers an alternative framework that focuses on the role of suppliers of goods and services (the “supply chain economy”) in national performance. We identify three conceptual attributes of suppliers that make them important for innovation: they produce specialized inputs; have more downstream linkages with other industries; and benefit especially from co-locating with their customers, creating externalities. Using the 2002 Benchmark Input-Output Accounts, we estimate a new industry categorization that separates supply chain (SC) industries (i.e., those that sell primarily to businesses or government) from business-to-consumer (B2C) industries (i.e., those that sell primarily to consumers). We find that the supply chain economy is a distinct and large segment of the economy that includes primarily service providers. The SC industries, especially traded services, have higher average wages than B2C industries. The supply chain economy also has higher innovative activity as captured by the concentration of the vast majority of STEM jobs (primarily in traded services) and patents (in manufacturing). Finally, we find that employment in the economy has evolved from manufacturing into two distinct types of services (1998–2015): SC Traded Services (with the highest STEM intensity and wages) versus B2C Main Street (with the lowest STEM intensity and wages).

Keywords: supply chain industries; business-to-consumer industries; services; innovation; Economy; Framework; Supply Chain; Service Operations; Innovation and Invention; Economic Growth; United States;