Amazon to Detroit: You didn't have enough talent to get HQ2

It came down to talent.

Amazon reached out to Detroit leaders Thursday to say that an insufficient talent pool in the region was the main reason why Detroit didn't make Amazon's short list of finalists for its second headquarters.

Sandy Baruah, president and CEO of the Detroit Regional Chamber, was among those on the phone call with Amazon and reported that Amazon said Detroit almost but not quite made the list of 20 finalists.

"The creativity, the regional collaboration, the quality of the bid document, the international partnership with Windsor, all of that got incredibly high marks," Baruah said in recounting Amazon's feedback.

"But this is the NFL. Economic development at this level, it ain’t beanbag," Baruah said. "We were good but we weren’t good enough on the talent front."

Detroit's lack of a robust regional transit network also hurt, but wasn't pivotal.

"My takeaway, yeah, regional transit played a role. Was it the defining role? No, I think talent was the defining role in us not making the list," Baruah said.

By "talent" Amazon meant a host of issues, from the quality of K-12 education in the region to the brain drain Michigan suffers by losing highly educated, tech-savvy graduates who move elsewhere once they graduate from schools here. And the Detroit region still struggles to attract talent from elsewhere and keep it once it's here.

Nancy Kaffer: Detroit's Amazon HQ bid failed. So what?

"We’re doing good on those fronts but we’re not necessarily world-class yet," Baruah said. "And since our renaissance is relatively new here, I think it’s difficult for Amazon to make the size of the bet they’re about to make on HQ2 in a place with a track record on talent that is good but not necessarily long enough."

With that feedback in mind, the Detroit region and Michigan as a whole has a lot of work to do. The feedback speaks to how the school curriculum is developed here, why the state cannot hang onto those tech-savvy graduates, and how to turn around a reputation for losing rather than attracting talent.

Related:

"We’re still working on developing that kind of (better) reputation," Baruah said. "I think we’re doing all the right things, but we’re still working on that."

Indeed, Jeff Mason, president and CEO of the Michigan Economic Development Corp., told the Detroit Economic Club recently that Detroit would have to attract talent from Windsor as well as surrounding states, including Ohio and Indiana, to meet all of Amazon's needs. That may not have been enough for Amazon.

"I was very gratified that Amazon reached out to us so quickly," Baruah added. "We were in it until the very end."

Amazon's feedback helps clarify, at least to some extent, Amazon's decision to leave Detroit off its short list of 20 finalist cities for its second headquarters.

If talent was the big issue for Amazon with Detroit's bid, let's not forget the transit issue. Amazon made clear in its initial request for proposals that it wanted a city with a robust public transportation network for its employees to use. Detroit's lack of the sort of light rail systems available in so many of the finalist cities — Chicago, New York, Boston, Washington, D.C., Toronto — remains telling.

And remember, too, that Amazon made clear from the beginning that it wanted a city with a stable business climate and a large and growing tech sector. Detroit may have come up short on both counts.

Detroit and Michigan as a whole still suffer a traditional boom-and-bust cycle — higher highs during boom times and then dismal lows during recessions. That may have counted against us in Amazon's deliberations.

And our technology sector, while growing rapidly, still lags that in many other cities.

There were some surprises on the list. Only one of the 20 finalist cities, — Newark, N.J. — shares Detroit's reputation for severe urban distress. But Newark, situated just a short lob across from New York City, may have made the list due to lying within the Big Apple's orbit. Detroit didn't have have that going for it.

And Detroit wasn't the only city left off that proved surprising. Minneapolis, San Diego, and Phoenix, didn't make the list, either.

Related:

But there were things to be grateful for. I've always said Detroit did check many of the boxes Amazon cared about. We have a great international airport, great universities, a large population. Our proximity to Canada was a plus for us. And the regional cooperation that went into the bid could pay off down the road.

So while disappointed, Detroit leaders looked ahead to the next challenge, or as businessman Dan Gilbert said in his reaction statement, "Next."

Because, although Amazon may have been the biggest prize, there are lots of others out there. And Detroit needs to compete for them, day after day, year after year.

Contact John Gallagher: 313-222-5173 or gallagher@freepress.com. Follow him on Twitter @jgallagherfreep.