Opinion

Combine water, grain, hops, yeast and get – jobs

Attracting and adding jobs is a top priority in cities across the country, with most locales actively recruiting relocating firms. Rather than marketing themselves based on cost of labor, land, or even taxation, cities increasingly are highlighting an unlikely asset in their attraction efforts: beer.

City bids for Amazon’s HQ2 sweepstakes, which promised a second headquarters with 50,000 high- paying jobs, provided a rare opportunity to observe systematically how cities from San Diego, California to Brunswick, Maine, market and promote themselves. Craft breweries played a surprisingly central role, appearing in over 60% of proposals that have been made public.

In oversized type, Cleveland claimed to be the #1 Beer City while Buffalo included a letter of support from a brewery CEO. The Triangle’s own submission touted a high quality of life by listing the area’s median house prices, temperate weather, music venues, and thriving brewery scene. Perhaps no city went further than Richmond, Virginia, which pledged that the HQ2 office buildings would be within a mile of “seven breweries, two cideries, a meadery, and a whiskey distillery.”

As was typical, bids from the Research Triangle, Greensboro, and Charlotte offered lavish incentive packages hoping to lure HQ2. However, when given the chance to explain what makes them special, cities emphasized qualities ranging from to lifestyle to culture, diversity, livability, and good governance.

This trend flies in the face of mainstream economic theory, which predicts that relocating companies prioritize available, affordable labor, low tax burdens, and sites that minimize transportation costs to suppliers and markets. Amazon’s ultimate selection of northern Virginia and New York City—two high tax, high cost urban areas with tight labor markets and modest incentive offers—turn such conventional wisdom on its head.

Breweries evoke a unique blend of craftsmanship and creativity, small-business entrepreneurship, unique local identity, and an atmosphere of fun authenticity. They are public spaces, providing venues for people to meet and experiment with new brews. However, perhaps their greatest value comes their appeal to highly-mobile recent graduates and young-professionals, who increasingly congregate, undeterred by sky-high rents, in trendy urban areas.

In their proposals, cities across the country tried to demonstrate not only a healthy supply of college graduates, computer scientists and engineers, but also their capacity for attracting more. Cities hail bustling brewpubs as millennial-magnets, to borrow a phrase from Orlando’s submission, and proof that their city has the right stuff to attract talented, mobile job-seekers. Boston aims to attract young urban professionals with “micro-units, co-working spaces, dog parks and local breweries.” In its pitch video, Charlotte claimed to be the “#1 location that millennials want to move to,” crediting cultural assets such as sporting events, festivals, outdoor spaces, and yes, craft beers alongside cost of living and economic opportunities.

So, should enterprising city planners start floating public support for breweries as the key to economic growth? Cities can take steps to celebrate and support local cultural assets, but those that try to manufacture such character out of whole cloth frequently find that it is hard to fake authenticity. Atlanta argues its breweries are unique “largely because of the community aspect and deep roots in the neighborhoods they call home.” Moreover, supporting a brewery as a quick fix for an ailing economy is

unlikely to be effective. The appeal to much of what makes a city attractive is organic, whether it be vibrant arts, green spaces, a civically engaged community, local customs and events, or a freshly tapped keg brewed with local ingredients.

The larger lesson from the Amazon HQ2 contest is that cities compete for jobs by advertising talent, talent attraction, and quality of life, not just cost. Unique character and amenities that attract creative people provide a competitive edge in the current economy. Instead of increasing the dollar amount of incentives offered to firms, we should invest in cities that talented people want to live in and trust that jobs will follow.

The article draws from and is based on:

Nager AB, Lowe Reed AS, Langford WS. Catching the whale: A comparison of place promotion strategies through the lens of Amazon HQ2. Geography Compass. 2019;e12462. https://doi.org/10.1111/gec3.12462

Professor Maryann Feldman is the Heninger Distinguished Professor in the Department of Public Policy at the University of North Carolina, an Adjunct Professor of Finance at Kenan-Flagler Business School and a Research Director at UNC Kenan Institute of Private Enterprise. Adams Nager, Scott Langford, and Allison Lowe Reed are doctoral students in the Department of Public Policy at the University of North Carolina at Chapel Hill.

  Comments