Amazon HQ2 in Long Island City leaves experts split on fate of startups

Amazon's new headquarters in Long Island City, Queens, could mean trouble for startups, one expert said.
Amazon’s new headquarters in Long Island City, Queens, could mean trouble for startups, one expert said. Photo Credit: NYPD

Hello Amazon, goodbye small businesses?

With Amazon’s recent announcement of a Long Island City headquarters and 25,000 job opportunities, experts appear to be split on what the online retailer’s expanded presence in the city could mean for smaller companies. 

When hiring begins next year, Amazon will be looking to fill high-skilled tech positions such as software-development engineers, software-development managers and solutions architects.

Jonathan Bowles, executive director of the Center of an Urban Future, believes the influx of 25,000 new jobs will improve the city’s economy as well as its tech industry, but it could also end up hurting already fragile startups.

“New York’s tech sector has gotten so far on its own with a lot of startup companies, a lot of small and midsize companies,” said Bowles. “Amazon’s entrance into New York is going to make it harder for the startups to attract the talent they need. I think that the top engineers, programmers will naturally migrate to companies that can pay top dollar.”

When looking at South Lake Union in Seattle, where Amazon’s headquarters is located, University of Washington marketing professor Jeffrey D. Shulman said the area changed drastically – but to the benefit of startups and small businesses.

“With Amazon growing so fast here, other companies have grown fast here as well,” he said. “The place I lived for six years was unrecognizable. It’s not just Amazon buildings, it’s buildings of other offices of companies that want to be near Amazon and apartments for people who want to live by Amazon.”

While people may initially move to Seattle just to work for Amazon, they often fall in love with the city and want to grow their careers without moving again, Shulman added. It’s also not uncommon for people in the tech industry to get their start at larger companies like Amazon, Google or Facebook and then look to shift to smaller startups when they’re ready for a different lifestyle.

“You might find someone drawn to New York who otherwise wouldn’t be there, who says, ‘OK, I got my experience at Amazon and now I love New York and I’m willing to work at these smaller upstarts,’ ” Shulman said.

But with Google reportedly looking to also expand in New York City, it is possible that startups could see fierce hiring competition in the coming years.

With Sarina Trangle and Ivan Pereira