Business: Schumpeter: Leaving for the city
Lots of prominent American companies are moving downtown.
Fifty years ago American companies started to move their Headquarters away from city centres to the suburbs.Some critics blamed the exodus on “white flight”, as businesses followed their employees out of increasingly crime-ridden cities.The firms themselves ascribed it to corporate responsibility.They provided offices in safe neighbourhoods and near good schools—one academic, Louise Mozingo, of the University of California, Berkeley, calls it “pastoral capitalism”.Whatever the reason, it created a new type of HQ: not an office tower in the pumping heart of a metropolis but a leafy campus in the middle of nowhere.
Now a growing number of companies are moving back again.The most prominent example is General Electric, which abandoned New York City for a 68-acre campus in Fairfield, Connecticut, in 1974, but is now swapping its bucolic site for a collection of warehouses on the Boston waterfront.There are legions more.Chicago’s downtown has attracted an impressive collection of HQs, from both the surrounding suburbs and from farther afield, including McDonald’s, Kraft Heinz, Motorola Solutions, ,and Archer Daniels Midland, a food-commodities giant.Zappos, an online retailer, has moved from an office park outside Las Vegas into the city’s old downtown.Biogen moved from Cambridge, Massachusetts, to the Boston suburbs in 2011 only to re-turn a year later.Many tech companies were born urban and couldn’t be any other way.Twitter and Sales force are in downtown San Francisco, and Jeff Bezos is building a huge campus for Amazon in downtown Seattle.
City boosters are delighted.“This is better than hosting the Olympics,” says Shirley Leung, a columnist with the Boston Globe, of GE’s move.Corporate executives sound like graduate students after their first reading of “The Rise of the Creative Class” By Richard Florida, an urbanophile intellectual.Jeff Immelt, GE’s Chief executive, says that “we want to be at the centre of an ecosystem that shares our aspiration”, and notes that Boston attracts “a diverse, technologically fluent workforce”.Ann Klee, who is helping to oversee GE’s move to Boston, says that the new headquarters will do without a car park, in order to encourage workers to use public transport.It will dispense with security gates and wants the public to come in.Greg Brown, the CEO of Motorola Solutions, commends downtown Chicago for its “energy, vibrancy and diversity”.
Is the new urbanism all it is cracked up to be?It is easy to find counter-trends, given America’s size and variety: many CEOs continue to see a future in the suburbs of the sunbelt.ExxonMobil is building a headquarters for 10,000 people in the outskirts of Houston.Toyota is moving its North American headquarters from Torrance, California, to suburban Dallas.There is also tax-and-benefits arbitrage going on: over the past decades, the suburbs have become complacent and downtowns have got hungrier.