The Business Plan with Bill Reagan: What does HQ2 mean for small businesses?

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Bill Reagan (Photo courtesy Alexandria Small Business Development Center)
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For several weeks, Arlington and Alexandria have justifiably basked in the glow of the win of Amazon HQ2 over 238 contenders nationwide. Alexandria also cornered the huge bonus of Virginia Tech’s Innovation Campus. Those wins are difficult to exaggerate. Perhaps it’s timely to drill down to consider the impacts for our small businesses.

Amazon based its selection on this region being highly educated and a top producer of tech talent. It noted the area’s stable and business-friendly environment, as well as our diversity and inclusiveness. Small businesses should take note to highlight and leverage those attributes to their own advantage as they attract talent and business partners.

Alexandria’s selection as the site of the $1 billion Virginia Tech Innovation Campus, as well as being home to the Patent & Trademark Office and National Science Foundation, firmly establishes this city as a technology and innovation hub. The Innovation Campus will produce graduates in computer science and software engineering, so small tech firms will benefit from Greater Washington’s appeal as an ideal place to start and grow a career in tech and innovation.

As Amazon and Virginia Tech scale up operations here, the regional economy will become stronger and more diverse, and will be better insulated from federal government fluctuations and economic swings. With the strengthening economy, consumer optimism and spending should rise to benefit both large and small businesses.

Small businesses that derive most of their sales from within the community will benefit from increased spending from the 25,000-plus jobs Amazon itself will provide, as well as the more than 25,000 indirect jobs from businesses that will satellite around Amazon.

These will be super skilled and community-engaged employees with high disposable incomes (an average of $150,000 per year at Amazon). These employees at early stages of their lives will acquire homes, furnish and renovate those residences, start families and look for entertainment. It’s hard to overstate the effect of the spreading demand for products and services that each of those activities will generate.

Amazon is community-focused, so they placed great emphasis on our winning proposal’s meticulous planning for transportation, housing and school infrastructure to keep up with the influx that Amazon says will occur over 15 years. They conscientiously did not want to overwhelm their new neighbors.

That infrastructure calculus includes Commonwealth contributions for Metro and bus transitway expansion, so Alexandria will receive state support for the buildup. Likewise, Virginia Tech’s planning also will incorporate opportunities for collaboration with our local schools, to manage growth and give our students access to university resources. Locals certainly will benefit from the enhanced infrastructure.

Interestingly, Amazon doesn’t have corporate eateries but instead encourages employees to go into the community for lunch and breaks. All neighborhoods should benefit from increased activity, but Del Ray especially should find Amazon and the Innovation Campus to be ideal and lively neighbors.

Perhaps the greatest predictable benefit to all local businesses is the way this prize was won — through regional collaboration. That bodes well for future regional wins and this area becoming home to more top-notch corporations and attractions. Happy New Year indeed.

The writer is the executive director of Alexandria’s Small Business Development Center.

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