In Response to Larry Fink
Where Can Big Companies Do the Most Good? Small Towns
On January 16, 2018, Larry Fink, the chief executive of BlackRock, told major corporations they should do more to help society. He asked big corporations to stop paying so much attention to their bottom line and start thinking about their fellow citizens and their country. In his statement, he said, “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate. Without a sense of purpose, no company, either public or private, can achieve its full potential.” Fink’s BlackRock manages $6.3 trillion in assets, so his message has heft, but exactly what does Fink mean when he says that companies need to “find their purpose”?
I was considering Fink’s message when, the very next day, Apple’s CEO Tim Cook said, “We believe deeply in the power of American ingenuity, and we are focusing our investments in areas where we can have a direct impact on job creation and job preparedness. We have a deep sense of responsibility to give back to our country and the people who help make our success possible.” All this goodwill — where is it coming from? And, more importantly, where will it go?
I live in a small rural town in Eastern North Carolina, with its boarded-up stores, a high school that graduates only 68 percent of its students, an unemployment rate of 8.2 percent and 43.99% of its population living below the federal poverty line. I don’t remember the last time a big company actually considered moving into a rural town like the town I live in. Instead big companies — with their laundry list of demands — head to metropolitan areas where they can be wooed by local politicians with a full range of perks and tax cuts. Usually it’s an area where the companies make virtually no impact on the community other than providing more jobs.
Case in point: Amazon is planning a second headquarters. Nearly every city in America is vying for its business. New Jersey offered Amazon $7 billion in potential tax credits if they move the headquarters to Newark — and other cities are dangling carrots just as large. City governments are salivating for the business and Amazon has already told these government guys exactly what it wants: transportation (subways, trains, airports), diverse workers, 500,000 square feet in 2018 and 7.5 million square feet over time so it can build a campus the size of its Seattle campus the following year. Oh yeah, Amazon also wants bike lanes.
Apparently, as of January 18, Amazon has narrowed down the playing field to the following 20 cities: Atlanta, GA; Austin, TX; Boston, MA; Chicago, IL; Columbus, OH; Dallas, TX; Denver, CO; Indianapolis, IN; Los Angeles, CA; Miami, FL; Montgomery County, MD; Nashville, TN; Newark, NJ; New York City, NY; Northern Virginia, VA; Philadelphia, PA; Pittsburgh, PA; Raleigh, NC; Toronto ON; and Washington D.C.
I don’t see any small rural towns on the list, even though a lot of great companies started in small towns — Wal-Mart in Bentonville, Progressive in Mayfield Village, ADP in Roseland. A few years ago, after a marketing controversy, Starbucks promised to open 15 stores in distressed locations — Ferguson, Missouri being one of them. I thought the town I lived might have a shot, so I took a photograph of a funky location (where 5,000 cars pass by each day — see the photo above) on the local highway and mailed the photo and pitch to CEO, Howard Shultz, to bring a Starbucks here. I never heard a word from Schultz nor Starbucks. Talk about losing touch with the customer!
Anyhow, according to a 2016 American Community Survey, “Rural areas cover 97 percent of the nation’s land area but contain 19.3 percent of the population (about 60 million people),” Census Bureau Director John H. Thompson said. So maybe big companies think they are serving the greater good by gravitating to big cities instead of suburbs or rural areas? There seems to be a trend that way.
Mayor Rahm Emanuel said the number-one reason big companies locate to cities is “workforce.” These companies want to be near their young, tech-savvy professionals — the millennials, which are now the largest component of the American workforce. Millennials like public transport, bike lanes and juice bars — something most rural towns don’t offer — so corporations chase after them by moving to the big towns. But millennials, bless their hearts, can also be fickle. At one point they are going to grow tired of the high cost of housing, the traffic, the crime, the noise.
But let’s get back to Larry Fink’s statement about companies needing to make “a positive contribution to society.” Small rural towns need to be part of this “contribution to society.” Companies like Amazon and Apple don’t need big cities to pick up the tab for their demands. These companies can put down stakes just about anywhere in the country and the workforce will follow. To use a Steve Jobs phrase, companies need to “think different” about how to make a positive contribution to society and anticipate where the next big migration of workers is headed. It may not be the cities.
