NEW YORK – Amazon has pared down to 20 contenders for their proposed $5 billion HQ2, in a new North American city outside of headquarters in Seattle. It’s definitely raised more excitement than when Los Angeles bid for the 2024 summer Olympics, losing out eventually to Paris. Construction of the 8 million square feet campus is expected to commence in 2019. The company says it will hire 50,000 workers for high-paying jobs, at the new campus; the same number of employees they have in Washington state.
Now, your guess is as good as anybody else’s, if any of the 19 cities in the US would be able to prevail over the lone contender from Canada, Toronto, help get over the disappointment of losing out on the 2024 Games.
Here’s a far weightier question too for Amazon to ponder in coming to a decision, apart from real estate issues and tax freebies thrown at them: where are the tens of thousands of STEM workers they will look to hire, come from?
There’s no doubt that Amazon, which industry experts reckon is on track for $1 trillion evaluation, is one of the best American companies to work for. Amazon ranks #1 on Fast Company’s Most Innovative Companies, #2 on Fortune’s World’s Most Admired Companies, #1 on The Harris Poll’s Corporate Reputation survey, and #2 on LinkedIn’s U.S. most desirable companies list.
Its investments in Seattle from 2010 through 2016 resulted in an additional $38 billion to the city’s economy – every dollar invested by Amazon in Seattle generated an additional $1.40 for the city’s economy overall, according to the company.
There was also tremendous increase in Fortune 500 companies with engineering/R&D centers in Seattle, burgeoning from 7 in 2010 to 31 in 2017. Apart from the 50,000 employees on campus, Amazon helped create an additional 53,000 jobs in the Seattle area because of direct investments. It has 540,000 employees worldwide.
The critical question of hiring new workers, though, is significant.
During the Obama administration, when Amazon begun to blossom, skilled immigrant workers were encouraged; Silicon Valley thrived. The scenario has changed under the Trump Administration. Now, visa for skilled workers, or ease of getting it, has eroded drastically; there’s danger of it coming to an abrupt halt altogether.
Add the fact that there is sustained lack of interest among American teenagers to take up STEM careers, the problem of getting skilled STEM talent will likely increase in the years to come.
Take a look at this new survey by the Pew Research Center, released this week, which indicates paucity of STEM workers in the US. Most Americans when asked why more students don’t pursue a degree in science, technology, engineering or math (STEM), they are most likely to point to the difficulty of these subjects, according to the survey. About half of adults (52%) say the main reason young people don’t pursue STEM degrees is they think these subjects are too hard.
Only 13% of the U.S. workforce was employed in STEM occupations as of 2016, while the vast majority (87%) was employed in other occupations, said the survey.
“Policymakers and educators have long puzzled over why more students do not pursue STEM majors in college, even though those who have an undergraduate degree in a STEM field of study earn more than those with other college majors – regardless of whether they work in a STEM job or a different occupation. Yet only a third of workers (33%) ages 25 and older with at least a bachelor’s degree have an undergraduate degree in a STEM field,” the survey report said.
It’s evident that the problem has not been tackled by US educators and policy makers over the years: a 2013 Pew Research Center survey, using similar question wording, found that Americans were also most likely to point to the difficulty of science and math as the main reason more young people don’t pursue degrees in these fields.
In the new survey, smaller shares say the main reason more young people don’t pursue degrees in STEM is that they think STEM subjects are not useful for their careers (23%) or they think these subjects are too boring (12%).
The most commonly cited reason for not pursuing a STEM career was cost and time barriers (27%), such as high expenses required for education or a lack of access to resources and opportunities. One-in-five (20%) say the reason they did not pursue a STEM career is they found another interest, while 14% say they found STEM classes were too hard or they lost interest.
This widening chasm of STEM haves and STEM have-nots, just like the wealth gap, can only be addressed by opening the doors for more skilled workers from overseas.
Tech companies and their lobbyists have pointed to the acute shortage of STEM workers in the US. With the protectionist and prohibitive approach by the Trump Administration, the question facing a lot of the tech companies in the US will be where to investment for future growth, and importantly, how to get the right talent to make those new centers profitable.
If the Trump Administration continues with its vilification of skilled workers, especially those on H-1B visa, continue to clamp down hard on family members of these workers – forcing spouses on H-4 visas to remain unemployed for decades till permanent residency, as well as act tough with foreign students on F-1 visas – make it hard for them to get permanent jobs after they graduate, they may well find out that it comes with repercussions: Amazon may well decide to spurn all the 19 cities in the US; create their fantastic new campus in Toronto, where liberal immigration policies for skilled workers are in place.
(Sujeet Rajan is Executive Editor, Parikh Worldwide Media. Email him: email@example.com Follow him on twitter @SujeetRajan1)