Amazon announces new split headquarters

14 Wednesday Nov 2018

Posted by tjungbau in Economic Growth, Education

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After a lengthy selection process Amazon has picked Long Island City in Queens, New York City as well as Arlington, Virginia, a Washington suburb, as its second headquarter locations.

The move makes sense from several perspectives. Locating on the East Coast, Amazon will be able to attract the highly educated not interested in moving to the Northwest. Both NYC and Washington are natural targets due to both their existing workforce as well as general preferences of top university graduates to move into the area. However, both locations are sufficiently far away from busy locations to provide the company with opportunities to grow at these locations.

Besides the locations, splitting their co-headquarters could likely entirely be explained by local governments’ incentives. Undoubtedly, tax breaks and general goodwill towards the company from two different entities for half a headquarter each exceeds what Amazon could have attracted from a single location. Moreover, the split likely dampens the negative effect on housing affordability in the chosen locations.

The reportedly 50.000 new employees, many with graduate degrees, would promise a boost to each local economy. What is more, there is hope and speculation that Amazon would attract other business to settle in the area. This led more than 200 US communities to pitch to Amazon.

In the end, the company’s leaders chose to locate close to the main circles of power in the nation. A move that potentially also signals that Amazon is seeking physical proximity to political decision makers.

Lastly, the enormous recent growth of Amazon and similar companies, who bet on consumer data to optimize targeted advertising as well as pricing, creates an enormous demand for highly skilled graduates from quantitative sciences with data analytics capabilities. The reported average salary of $150,000 makes Amazon (among others) a more and more serious competitor to academia as well. The Chronicle of Higher Education quotes me briefly on this last point.

The effect of Google re-entering Chinese cyberspace

18 Saturday Aug 2018

Posted by tjungbau in Corporate Social Responsibility, Democracy, Economic Growth

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BBC, China, Google, Search engine

My fellow interviewee and former Google employee Brendan Downey made some very good points when speaking on BBC Newsnight yesterday. Btw shout out to the BBC for promoting me to Associate Professor. While it is challenging to make a deeper coherent argument in less than 90 seconds, I felt it was a good conversation.

A Western tech powerhouse such as Google legitimizing China’s “Great Firewall” by introducing a censored search engine is most certainly reason for concern. Predicting the long-term effects of a potential re-entry of Google in the Chinese market, however, appears challenging.

Since Google exited in 2010, Chinese authorities have critically upped their level of censorship all by themselves, without the support of any Western company. Thus, it is unclear why the presence of a Google search engine would make matters worse than the status quo.

Contrary, disclaimers as constant reminders of censorship and supervision could potentially contribute to a desire for change of a critical mass. Moreover, the observation which topics provoke disclaimers could foster the gain of additional information within the country. From a more general perspective, market presence of strong global brands in a country in which most companies are state-run seems desirable.

It seems naive to believe that when Google exited China in 2010 under co-founder Sergey Brin, they did so mainly due the forced censorship of content. Many believe that Chinese-led cyber-attacks on its customers, specifically human-rights activists, and Google itself were the primary reason for Google’s backtracking.

In a letter Google’s employees demand to participate in ethical reviews of the company’s practices. This seems to be a brilliant idea going forward. But let’s recall that we are talking about a censored search engine as well as a news aggregation app. Neither of these likely would increase censorship when compared to the status quo but potentially offer upside. If Google though were to offer products such as email accounts or cloud services and allow Chinese authorities to access private customer information, this would turn the tides dramatically for the worse.