Why Minnesota Couldn’t Land Amazon’s HQ2: Not Enough Tech Talent

Why Minnesota Couldn’t Land Amazon’s HQ2: Not Enough Tech Talent

Labor shortage knocked the state out of consideration.

Minnesota lost out on its bid to be considered a contender for a second North American headquarters for Seattle-based Amazon.com Inc., dubbed “HQ2.” The Twin Cities area was hardly alone: Amazon gave the thumbs-down to more than 90 percent of the 238 submissions it received to draw up a short list of 20 cities.
 
But since the January snub, economic development staffers at the Minnesota Department of Employment and Economic Development and St. Paul-based Greater MSP have been quiet about why Amazon dropped the state from consideration. The Wall Street Journal reported last week that Amazon officials provided feedback through approximately 200 phone calls to communities that didn’t make the cut. In the wake of the Wall Street Journal story Shane Delaney, spokesman for DEED, confirmed that Amazon extended the same courtesy to local pitch planners.
 
“We did have a call with the company… They did say that tech talent was probably one of their biggest concerns,” Delaney told Twin Cities Business. “The company said they were concerned that we wouldn’t be able to scale up to their need…If there was any piece of critical feedback, that was it.”
 
The bottom line? Amazon didn’t think that Minnesota has a strong enough pipeline of information technology workers. Amazon envisions HQ2 as having up to 50,000 employees.
 
“It’s no secret that we have a workforce shortage issue in this state,” said Delaney.
 
Last week Amazon announced plans to add 200 additional tech workers to its technology development office in downtown Minneapolis. But that’s less than one percent of the 50,000 employees that the e-commerce giant would look to add at a second headquarters location.
It’s also significantly less than the 3,000 jobs Amazon plans to add in Vancouver, British Columbia, or 2,000 new positions planned in Boston. (Job increases in those cities were also announced last week.)
 
The challenge of finding enough workers goes far beyond Amazon’s HQ2 search.
 
DEED reported the unemployment rate for Minnesota in March at 3.2 percent. That’s notably lower than the 3.9 percent national unemployment rate for April, which is now at its lowest point since 2000. In late March, DEED reported that there are now more job openings than job seekers in the state. DEED statistics showed 0.8 unemployed people for every job opening in the fourth quarter of 2017.
 
State officials, policy leaders, companies and educators are all trying to find ways to address the challenge. On Monday the Minnesota Chamber of Commerce announced the creation of the Center for Workforce Solutions, a new business-led effort to address labor shortage issues.