On Amazon, NY’s loss should be the heartland’s gain

Amazon’s in-your-face withdrawal of its plan for a New York City headquarters continues to prompt debates in New York, but for the rest of the country — and especially up-and-coming cities in the heartland — the tech giant’s U-turn raises the hope of high-tech vitality in more of America.

Amazon’s change of plans, in this respect, is more than just a chance for some heartland cities to grab some newly available jobs, given the company’s statement last week that it would abandon New York and reallocate its planned growth into its 17 North American corporate and tech hubs.  

More importantly, the collapse of the New York headquarters bid is a welcome interruption of the decade’s “rich-get-richer” regional imbalances and an opportunity for a better distribution of the nation’s high-tech growth around the country, for the betterment of all. 

It never did sit right that the result of Amazon’s year-long search for a second headquarters was going to be to cram 50,000 more tech jobs into two of the nation’s biggest, most-crowded “superstar” cities, Washington, D.C. and New York. 

To be sure, powerful “agglomeration” economies will continue to drive tech firms to concentrate their workforces in talent-rich big cities. Yet even so, it has become increasingly clear that such concentrations, which have continued to intensify with no end in sight, are beginning to throw off serious negative side effects.

Some of these side effects of over-concentration are local and well-known and epitomized by the tumultuous livability crises that have engulfed neighborhoods in Seattle, San Francisco and other tech hot spots. 

Other problems with the tech hubs, meanwhile, involve the business dangers of “groupthink” and the possibility of missing out on talented people or great ideas.

Then there is the fact that America’s sharpening patterns of too-much growth in the superstar cities and too little everywhere else have begun to spawn disturbing externalities: stagnation in whole swaths of the country, small-town resentment of coastal elites and backlash politics.

Against that backdrop, the collapse of Amazon’s New York site revives the attractive prospect of more high-tech business activity taking place in a broader set of cities, including in the nation’s heartland.

Such a reorientation would link the tech sector to new ideas, talented new people and different university innovation ecosystems — for its benefit. Likewise, better-distributed “Big Tech” sites would expose more up-and-coming cities to the dynamism of high-growth firms, state-of-the-art standards and new opportunities.

In fact, so welcome would this more-distributed style of tech growth be that Rob Atkinson of the Information Technology and Innovation Foundation and I are currently developing a proposal for a sizable federal challenge grant program aimed at actively bringing about such a distributed future.   

Specifically, Atkinson and I believe the federal government should hold its own competition to identify 10 or 12 up-and-coming non-superstar cities — especially in the heartland — that would be designated rising “growth poles” and gain significant federal support to catalyze faster innovation, commercialization and growth in exchange for demonstrated readiness and promise. 

In this way, the nation could at last intervene in the now-unhealthy dynamics that have ensured that the lion’s share of the nation’s new tech growth has fallen into a short list of “superstar” cities on the East and West coasts.

In any event, the time has come for “Big Tech,” the federal government and America’s cities to begin building a new geography of high-tech vitality. The dissolution of Amazon’s attempt to locate in New York says so.

Mark Muro is a senior fellow at the Metropolitan Policy Program at Brookings and a co-author, with Clara Hendrickson and William Galston, of “Countering the Geography of Discontent: Strategies for Left-Behind Places.”