Portage County Legal News

Landing Amazon HQ2 could suck tech talent from existing central Ohio companies

BRANDON KLEIN
Special to the Legal News
Published: May 15, 2018

Since Amazon whittled its choice of cities to place its second headquarters to 20, which includes Columbus, there has been increased scrutiny over the e-commerce giant's potential impact on the selected community, from housing to cost of living to way of life.

There's also the city's talent market.

Amazon expects to invest more than $5 billion in construction and grow what's been called HQ2 to include as many as 50,000 well-paying jobs. The facility would be a full equal to its current Seattle HQ campus.

Columbus is the only Ohio city to make the cut. It was ranked in March as the fifth best city for entrepreneurs and startups by Business.org.

But the region faces a similar story compared with the rest of the nation in terms of a talent gap for technology-related jobs.

In 2017, there were more than 7,200 open computing jobs in the greater Columbus market, according to data from Burning Glass Technologies.

But in the same year the market had more than 425 computer science graduates combined from the region's largest universities with the skills to fill these roles entering the market, according to the National Center for Education Statistics.

"The talent gap is real and a growing priority for our region and the startups Rev1 supports," said Tom Walker, chief executive officer of Rev1 Ventures, in a February blog post. "The talent challenge is even more acute in Columbus, given our lower-than-average unemployment rate and our growing startup economy."

Central Ohio's unemployment rate was 4.1 percent in March, according to data provided by the Ohio Department of Job and Family Services.

Rev1 Ventures has added $70 million in capital under its management, funded 83 startups, including 28 spinouts, and attracted $732 million in capital for companies it supports over the last five years, according its Startup Impact 2017 report.

"It is taking companies in Columbus an average of 100 days to fill some of these positions," Walker said in his blog post.

He declined The Daily Reporter's request to further comment on central Ohio's talent gap or how a potential Amazon HQ2 would affect it.

"Currently Columbus 2020 (and Amazon) is in a quiet period and as a partner of 2020, Rev1 is not able to comment on this right now," said Aimee Eichelberger, a spokeswoman for Rev1 Ventures, in an email, and was referencing the agency that helped prepared Columbus' Amazon HQ2 bid.

Still, computing occupations are the No.1 source of new wages in America and are growing with half of all high paying jobs, which make at least $57,000, requiring some computer programming skills, said Anthony Hughes, the CEO and co-founder of Tech Elevator, a Cleveland-based company that launched a coding bootcamp in central Ohio in late 2016.

Hughes started the company to tackle the supply and demand discrepancy when it comes to technological talent, which has created a "bloodbath" between companies that compete for each others employees.

"Columbus as a really good expansion market," he said.

Tech Elevator started with 12 students in December 2016 and are now on track to graduate between 110 to 150 students each year, said Katie Detore, Tech Elevator's Columbus campus director. The company has 91 percent graduation rate and an 89 percent job placement rate.

But the prospect of an Amazon HQ2 is "something scary to the chief information officers of the large companies in the region," Hughes said. "We have to be creative in how we prepare the city for an Amazon (or an equivalent company)."

The lack of technology talent was a reason Cincinnati did not make the list, Hughes said, while Columbus is doing better in comparison.

"The reality is we've got to do better and we've got increase our output," he said.

Startup growth in Seattle has slowed down in recent years, according to Business.org, which ranked the city No. 7 in its top 10 cities for entrepreneurs and startup companies.

Although Hughes believes an Amazon HQ2 would have greater impact on larger companies in central Ohio, he said the potential headquarters could spin-off more entrepreneurs and therefore new startups in the future.

"It will be good for the ecosystem from a startup perspective," he said.

And some local entrepreneurs are excited about the prospect.

"Columbus being in the short list for Amazon's HQ2 is not only positive for the economic growth possibilities of the city if we were chosen, but a testament of the capabilities of this growing city. As a city, we came together to draw an economic plan for the future of the city and we are ready to be chosen," said April Zimmerman Katz, owner and president of The Zimmerman Companies, in a statement. "Even if we are not chosen we are demonstrating that Columbus can compete with cities like New York, Chicago or Los Angeles."

Regardless of the outcome, Hughes said the process will help prepare Columbus to attract similar companies.

"The 'what if' of Amazon coming into any town is a very healthy exercise," he said.

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