Forget Austin or Toronto, Indianapolis Has What It Takes to Win HQ2

Twenty North American cities have made the final cut in Amazon’s search for the location of its second headquarters, or HQ2, and the Seattle tech giant has the world on pins and needles as it finishes deliberations. With a project so large in scope—HQ2 is expected to create thousands of jobs and generate billions in economic development benefits—it would likely be a gamechanger for whichever city it lands in.

All of the finalists have the tech talent, available space, and government incentives called for in the original request for proposals, and so far, Austin, TX, and Toronto are presumed to be the favorites based on those requirements. But there’s another city on the list that has those qualities and more, and it’s mostly being overlooked by those playing HQ2 guessing games in the media and tech industry.

Indianapolis, the capital of Indiana, has a lot going for it these days, which we’ll get into more detail below. With a metro area that is home to roughly 2 million people, it’s the third-largest city in the Midwest. Covering 368 square miles, Indy is also the United States’ 16th largest city by land mass.

Indianapolis is a blue city in a red state, but everyone we interviewed agreed that the state’s politicians are good at striking bipartisan collaborations when it comes to advancing economic development projects. Indy has a swiftly growing tech scene and is home to a huge Salesforce operation, the company’s largest hub outside of its San Francisco headquarters. The state has a robust healthcare industry, with major players such as Eli Lily, Cook Medical, and Roche Diagnostics calling Indiana home, and an extensive logistics infrastructure. Indy has the space, the well-regarded universities, the right mix of talent, and a central location. We’re just not sure it has the attention of Amazon CEO Jeff Bezos, but it should—especially if he has designs on reshaping the winning city’s footprint.

Location, Location, Location

Nicknamed the “crossroads of America,” Indiana is within a day’s drive of 70 percent of the country’s population. Seems like that would be a pretty important statistic to a company preparing to launch a delivery service that it hopes will rival FedEx. (For its part, FedEx just announced a $1.5 billion expansion of its Indianapolis shipping hub, the second-largest FedEx location in the U.S.)

Frank Dale, CEO of Costello, an Indianapolis software startup, says there is also a “wonderful” vacant airport that is minutes away from the proposed HQ2 site, which he suspects is part of the city’s bid. (The exact contents of the city’s bid have not been disclosed publicly, and entities that were part of creating the pitch, such as TechPoint, are prevented from discussing HQ2 specifics.)

Talent and Expertise

According to a Brookings Institution report, Indianapolis has one of the fastest-growing tech communities in the country. The city added 5,000 tech jobs between 2013 and 2015, a 13.9 percent increase, and is ranked 15th for tech job growth out of America’s 100 largest metropolitan areas. Thanks in part to the huge presence of ExactTarget and Salesforce in the city, there are lots of cloud and marketing software startups that Amazon could mine for talent.

Dale says that the area within a 60-mile radius of Indianapolis contains one of the densest populations of college students in the country, with Indiana University, Purdue, Notre Dame, and Rose-Hulman Institute of Technology contributing to the talent pipeline. The state also has plenty of lower-skilled labor to fill Amazon’s manufacturing, logistics, and warehouse jobs.

Perhaps the defining moment for Indy’s tech scene came in 2013, when Salesforce acquired homegrown marketing software company ExactTarget for $2.5 billion. The acquisition created millionaires overnight and freed up some of the city’s best tech executives to go forth and multiply, creating their own investment firms and startups that begat more new companies. Salesforce recently opened a $40 million tower in Indy, the state’s tallest building, and has continued to add hundreds of jobs.

Dale makes an excellent point about Indiana’s talent: Because of the state’s very robust healthcare, logistics, and tech industries, Amazon would have qualified job candidates and could “poach expertise to scale on day one.”

Stable Government and Business-Friendly Climate

Tim Cook is the CEO of KSM Location Advisors, a firm that helps shepherd companies through the site selection process. He says that while the details of Indy’s … Next Page »

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Sarah Schmid Stevenson is the editor of Xconomy Detroit/Ann Arbor. You can reach her at 313-570-9823 or sschmid@xconomy.com. Follow @XconomyDET_AA

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