Jim Brown
In the current competition to land a new Amazon second North American headquarters, Louisiana pulled out all stops. It would have been quite a coup for a Louisiana location to land this big prize with some 50,000 new jobs to the winner. But from the beginning, the Bayou State never had a chance.
The state continued its long tradition of trying to buy new companies, by offering “over the top” financial incentives. Amazon was offered $6.56 billion, a sum much higher than a number of other states that made the most recent cut. But Amazon had listed a host of requirements it would consider in picking its new $5 billion location.
A flagship research university consortium was deemed an important component for any serious bidder. In North Carolina for example, where two locations are still under consideration, a private-public partnership among Duke, North Carolina State and the University of North Carolina has developed a working syndicate offering private companies a world-class research triangle.
Louisiana has been plagued by long standing rivalries and turf battles between LSU, Tulane and other universities in the Greater New Orleans area. As the anointed flagship university in the state, LSU has failed to gain any serious recognition as a major research facility. As this column related just a few weeks ago, the latest hit to LSU was a report from Kiplinger’s financial magazine published recently citing how public universities rank when it comes to academic quality. LSU ranked at 270th, far behind every other SEC school with the exception of Mississippi State. Offering top-notch university research capabilities were a key component of Amazon’s requirements, and Louisiana colleges could not meet the Amazon standards.
Airport and airline availability was also a key component listed by Amazon. New Orleans has improved on its non-stop options to a number of major cities, but trips still often require stopovers in Atlanta, Memphis or Dallas. From Baton Rouge, nonstops outside of major hubs are non-existent. Amazon prides itself on quick deliveries, so numerous nonstop options are of paramount importance.
Public transportation infrastructure was also a top tier item on Amazon’s list. We all have horror stories about traveling on Louisiana roads, particularly through New Orleans and Baton Rouge. State legislators continue to refuse facing up to the necessity of toll roads, particularly individual toll lanes similar to those found all over Texas. The one lane I-10 bridge crossing into Baton Rouge continues to be a national disgrace. No serious discussion of a bypass or a monorail between Baton Rouge and New Orleans puts Louisiana at a disadvantage.
But the biggest handicap for the state is a lack of a large tech talent pool. We all would like to think of Louisiana as "Silicon Bayou," but the fact remains that the current talent pool of tech workers is far below other competing cities and states across the country. In fairness, New Orleans is seeing millennial tech growth, but it will take another 10 years to build a pool of workers that will make Louisiana competitive.
DXC Technology, a global IT firm is bringing 2,000 jobs to New Orleans, and that’s a good start. Amazon listed in a recent press release that it needed an average tech talent pool over over 100,000. The whole state of Louisiana has a good ways to go to reach anywhere close to such a number.
Then there is the question of how much is too much to give in order to buy new jobs. As I discussed in a recent column, local governments had lost $16.7 billion in revenue over the past decade in giving business tax breaks throughout the state. And the cost per new job? An astronomical $535,000.
Maybe Louisiana will acquire the reputation of being "Silicon Bayou" one day. But until research, infrastructure and lack of high tech jobs are addressed, the state won’t be taken seriously by Amazon or other expanding national companies.
Peace and Justice
Jim Brown
Jim Brown’s syndicated column appears each week in numerous newspapers throughout the nation and on websites worldwide. You can read all of his columns at jimbrownusa.com.