Why college students could lure Amazon to Philly

Philly campuses and Amazon need each other.

drexel skyline
Jordan Gunselman / Billy Penn
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National economists, city officials and business leaders think Philadelphia is well-positioned to make a serious case to bring Amazon and its coveted second headquarters to the region. And it’s college students that could play a role in making that case.

Much has been said (sooooo much has been said) about potential locations, Philadelphia’s proximity to other urban centers on the East Coast and its relative affordability that might make it a top contender for Amazon Part Deux. But Philadelphia has for years been perceived as unfriendly to business, thanks to its corporate tax structure, mediocre job growth and low percentage of college graduates compared to similarly sized metro areas.

The people tasked with attracting Jeff Bezos and his buddies to Greater Philadelphia beg to differ, and they’re citing Philadelphia’s growing talent pool of young people as one of the main reasons Philly can make a real case. Philadelphia isn’t perfect, they admit. But it’s undoubtedly on the upswing, in no small part due to the region’s robust higher education presence.

“It’s an impressive place for education that translates into an exceptionally skilled workforce,” Matt Cabrey, executive director of the Select Greater Philadelphia Council, said. “The good news now? Folks are staying.”

Amazon, which put out a Request for Proposals as it searches for the location that will play host to its second headquarters, says in its next city, the company plans to hire 50,000 people over the next 10 to 15 years with an average annual salary exceeding $100,000.

And that could happen either in the city, or its suburbs. Business leaders have floated locations like the Navy Yard, the Schuylkill Yards and University City in Philadelphia as areas that could play host to Amazon by 2019. Others have mentioned Camden, Wilmington and other locations in Northern Delaware, though Cabrey admitted “there are spots that are under consideration but don’t actually fit the criteria of the project.”

Now the question for the Greater Philadelphia area is: Do we have the talent pool to sustain a company like Amazon? And, on the flip side, what would that job creation mean for a city that’s struggled to retain its college graduates?

University of Pennsylvania

University of Pennsylvania

Jordan Gunselman / Billy Penn

The city’s Commerce Department, which is leading efforts to attract Amazon to the city in conjunction with state partners, has been quick to point out Philadelphia’s growing number of young people. According to the Pew Charitable Trusts, the population of millennials in Philadelphia increased by about 100,000 between 2006 and 2012, and that population is about twice as likely to have a college degree as the older generation.

That makes Philadelphia one of the fastest-growing cities for young people in the country. That talent pool is strong, Cabrey argues, because of the sheer number of colleges and universities (more than 100) in Philadelphia and the 10 counties surrounding it.

Deborah Diamond, the executive director of Campus Philly, said there are “very few metros” across the country that have this density of institutions of higher education, a point of attraction for massive companies looking to locate.

“Schools are anchor institutions in a way that companies are not,” Diamond said. “These are natural resources, almost, of our region. They’re not going to go anywhere. I would imagine that’s a powerful draw.”

In 2015, schools in the Philadelphia area awarded more than 90,000 degrees, representing a slight increase in degrees conferred over as recently as 2013, according to Campus Philly’s 2016 annual report. Of those degrees, 12,600 were in STEM — an 8 percent increase over 2013 — and 7,200 were in technology and engineering, representing a 13 percent increase over 2013.

University of the Sciences campus

University of the Sciences campus

Angela Gervasi / Billy Penn

Diamond said schools in the area are reporting increased graduation rates while simultaneously increasing enrollment, meaning the number of degrees is going up so the city is retaining students from a larger pool.

In 2015, nearly two-thirds of college students educated in Greater Philadelphia colleges and universities stayed in the region after graduation, which Campus Philly reports is more than other cities that measure this trend, “including Boston (about 50 percent of college graduates stay) and Baltimore (37 percent of college graduates are likely to stay).”

But it’s not all rosy. The number of non-native students who stuck around in 2015 actually decreased compared to 2010, when the recession was still lingering. In 2010, Campus Philly’s recent graduate survey reported that 55 percent of non-native Philadelphians who attended college here were still living in Philly at the time they took the survey. A 2014 report showed that number had dropped to 42 percent.

campusphilly
Graphic via Campus Philly

Meanwhile, only 10 percent of graduates from Penn, the city’s only Ivy League university, currently stay in Philadelphia  after graduation.

This is where the “on the upswing” argument comes in. Campus Philly points out that compared to 10-year trends, the number of non-natives who are sticking around in Philadelphia after graduation has actually increased. Campus Philly, in conjunction with the Economy League of Greater Philadelphia, conducted a similar survey in 2004, which showed that only 29 percent of non-natives were staying in Philadelphia post-graduation.

Diamond said the city could likely see higher retention rates if job growth was stronger (Hi, Amazon).

“Students can get a post-grad job here, but some are concerned about where that second job comes from,” Diamond said. “When you introduce such a large employer, you’re going to get that dynamism that students are really hungry for.”

Relative to other metro areas, Philadelphia’s job growth has been lackluster. While the Bureau of Labor Statistics reports the Philadelphia area has not had an over-the-year employment decline in nearly seven years and our job growth has recently exceeded New York’s, it’s still been among the worst cities for job growth in the country over the last several years following the recession.

And while the number of millennials has increased and retention rates of college students are higher than they were 10 years ago, Philadelphia still has a low percentage of college graduates compared to its counterparts and its poverty rate remains stagnant.

Can a company like Amazon change that?

“It’s true we have too many people who are out of work and eager to work,” Diamond said, saying efforts to rebuild the city’s community infrastructure could be a first step to turning that around. “Adding to that equation a large job generator is just very powerful and very exciting, and we can do it in a way that people are not priced out of their homes, but see the resources they have getting better.”