When Amazon (AMZN) announced an expansion that included building a new headquarters in Nashville, the move marked the single largest job security by a company in Tennessee’s history.
The data shows that the rise of tech giants has also changed the economy.
“Like all economists, I was skeptical before seeing the results,” said Vikram Pathania, one of Amazon’s chief economists. “We see employment growth, income growth, and a positive trend in these indicators.”
Amazon’s investments contributed $4 billion to Tennessee’s gross domestic product in 2023 and supported 15,000 indirect jobs, according to data provided by the company. Additional findings show that when a company relocates to a county, it can expect to increase the county’s employment-to-population ratio by an average of 1.7 percent.
The company touted that for every 10 jobs it directly created, nine more jobs were created indirectly.
“The very act of building a new warehouse means hiring a local construction company, so you start to notice the effects in some cases by the first year, definitely by the second year, and then by the third year. By then, the numbers will be clear,” Pathania said. “But there’s also an indirect route because we’re hiring people and putting wages in their pockets. And those people are going to local businesses and spending that money.”
Amazon’s expanding network
At its Delivering the Future event in Nashville this week, Amazon showcased innovations ranging from artificial intelligence to robotics and emphasized its presence in the community.
“We’re not just creating jobs; we’re creating opportunities and pathways for us to be part of the community, not just a corporate citizen in the community.” Holly Sullivan, vice president of global economic development, told Yahoo Finance. By phone.
When Amazon first announced plans to open a second North American headquarters (HQ2) in 2017, cities across the country looked to attract investment into their communities.
The e-commerce giant initially announced it would split its second headquarters between New York City and Arlington, Virginia, and provided Amazon with $750 million in state taxpayer subsidies. But the company canceled its opening in New York after backlash from local grassroots organizers, residents and politicians who objected to billions of dollars in government incentives provided to the company.
A year later, Amazon announced plans to invest in Nashville instead, with the goal of creating nearly 5,000 jobs in the music capital. Nashville Mayor David Briley at the time hailed this as great news for the city, and the governor called it a “game changer” for Tennessee.
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“We want to be in places that support us and support us in growing jobs,” Amazon’s Sullivan said. “Nashville is a great example. We started with a fulfillment operation and now have a large corporate office with over 3,000 employees.”
Amazon completed construction on the office last year, providing 1 million square feet of space for employees whose roles range from technical roles such as software development engineers to providing financial and business services.
Amazon has rapidly expanded its global footprint in recent years. The e-commerce giant added 300 new warehouses in 2020 alone, according to data collected by Consumer Reports. MWPVL International, a supply chain and logistics consulting firm, found that Amazon operates more than 1,300 locations in the United States, covering 435 million square feet.
Amazon’s warehouse construction rush hasn’t been well-received by everyone, with some local governments imposing restrictions on the creation of Amazon’s logistics network, citing concerns about pollution, construction and congestion.
But when it comes to where Amazon will expand next, the company is focused on innovation. Business priorities (think artificial intelligence) drive the thought process of where to invest. According to the Wall Street Journal, the company currently plans to spend more than $100 billion on data centers over the next 10 years.
“Cloud computing is a big investment for us, especially when it comes to artificial intelligence,” Sullivan said.
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