AI is reshaping local economies faster than our frameworks can keep up. The regions that thrive won’t be the ones that resist the change. They’ll be the ones that build new systems to absorb it.
This is the second piece in a series on what happens when traditional economic development metrics stop telling the truth. Last month, I introduced the concept of Gross Domestic Prosperity. This month: the regions proving why we need it.
The Data Center Question Is Really an Ecosystem Question
At the 2026 Detroit Policy Conference, Walbridge Chairman John Rakolta Jr. said that“A data center is the most fantastic economic development opportunity in the last 150 years.”
He’s probably right. But the more important point is that focus, consistency, and long-term investment pay dividends. The data center itself isn’t the strategy. The ecosystem around it is.
Take Virginia. 70% of all global internet traffic flows through Northern Virginia. The state ranks third nationally for tech job postings, trailing only California and Texas. That didn’t happen by accident. It happened after decades of strategic, compounding bets: the $1.1 billion Tech Talent Investment Program (designed to produce 30,000 additional CS graduates over 20 years), Virginia Invests ($250M in private investment for innovation-driven startups, launched in 2024 by the Virginia Innovation Partnership Corporation), and programs like GO Virginia’s $1.2M award to VCU’s Small Business Opportunity Center.
Virginia built the infrastructure that made it the obvious choice for data centers.
At the same time, Rakolta said that Michigan has “zero of the economic development tools” to sustain the momentum. Power centers aren’t cooperating, labor and management are at odds, politicians are gridlocked, and geographic misalignment compounds all of it. Companies, he said, look for stability and forward thinking. I’m not sure if that’s a critique of any one institution. It seems like a critique of a missing system.
(Full disclosure: I have friends in Michigan, and I’d like to keep them.)
To be clear, I vehemently disagree with Rakolta’s assessment. Michigan has one of the most active entrepreneurial ecosystems in the Midwest. The $60 million Michigan Innovation Fund, signed into law with bipartisan support and awarded in 2025, is the largest state investment in Michigan’s startup infrastructure in two decades. Ann Arbor was ranked #1 in startup density and #2 in startup momentum in the 2025 Best of the Midwest rankings. TechTown Detroit, BBCetc, and the statewide PitchMI competition (which distributed $1.7 million to founders in 2025 alone) are all evidence of a system being built deliberately and from the ground up. The MEDC helped over 2,000 new businesses start up in 2025. Michigan’s challenge isn’t a lack of resources. It’s a coordination problem, which is exactly what Rakolta is actually describing, even if his framing misses the work already underway.
That tension runs through every region in this piece. The assets exist. Whether the system connecting them is strong enough to turn activity into prosperity is the harder question.
North Carolina Won State of the Year. What does it mean?
North Carolina was named 2025 State of the Year by Business Facilities Magazine. The third time in six years. The numbers are impressive: 35,000 announced job commitments, $24 billion in capital investment from new and expanding companies. Christopher Chung, CEO of the Economic Development Partnership of North Carolina, described a state that is “consistent, competitive, and committed to long-term success.”
And yet.
Jesse Williams, an assistant professor at Campbell University’s law school, said something that applies across every region in this series. He asked his students to study the economic indicators the Secretary of Commerce is required to report, and to think about what they do and don’t capture. One student questioned the lack of a direct connection between those indicators and what people actually experience in the economy.
North Carolina’s household income is 12% below the national average. And this is the State of the Year.
The state is also doing some of the most targeted ecosystem work I’ve seen. North Carolina Secretary of State Elaine Marshall found that helping just 5% of aspirational businesses become self-sufficient would create 24,550 new jobs annually and $980M in new wages. That finding helped launch the Thrive Lab at UNCW, a targeted effort to advance businesses and support long-term entrepreneurial growth in coastal North Carolina. This is ecosystem building as economic development.
This is the kind of work that a Gross Domestic Prosperity framework would capture. Not just how many jobs were announced, but whether the system is producing pathways that people can use.
What Happens When the Prosperity Bomb Fizzles
Seattle columnist Danny Westneat described what happened to the Puget Sound region during peak Amazon as “a great prosperity bomb that exploded over the region, raining jobs and wealth while fueling prices that blasted working people right out of town.”
The region lost almost 13,000 jobs in 2025, the first annual decline since 2009 (excluding the pandemic). Over the past three years, the four-county area has averaged just 4,100 net new jobs per year. During the peak Amazon era, it was eleven times that: 46,750 annually. Amazon and Expedia both announced layoffs in February.
That’s the tension. Growth and affordability are treated as separate conversations. The best regions will harmonize them, not toggle between them depending on the cycle.
Seattle is the case study for why we need an updated way to measure local economies. When traditional GDP was booming, people were getting pushed out. Now that it’s cooling, people can afford rent again. Neither state is prosperity. Prosperity is when both things work at the same time.
The Bottom Rung Goes First
Here’s where this gets darker, and more urgent.
A laid-off Amazon software engineer described to The Seattle Times “a creeping feeling that she and her colleagues are training a technology that will eventually replace them.” That’s not paranoia. That’s pattern recognition.
Microsoft’s 2025 New Future of Work Report found that payroll data for workers aged 22 to 25 in highly AI-exposed jobs fell by approximately 13% compared to less-exposed roles. The report noted that AI is hitting the bottom rung of the white-collar ladder first, which may exacerbate income inequality. When automation substitutes for human labor, the labor share of output shrinks and inequality widens.
Anthropic CEO Dario Amodei has warned that AI could eliminate half of all entry-level white-collar jobs. Salesforce cut its support team from 9,000 to 5,000. Klarna downsized by 40%. (Psst do you still want to recruit large companies to your region?) Roofers, piledrivers, housecleaners, and dredge operators top the list of AI-resistant jobs, workers who rarely factor into how we talk about economic transitions. Meanwhile, the fastest-growing AI companies are producing more economic value per headcount than anything in history. This is the first time the most productive asset in the economy has created fewer, not more, jobs. Nobody’s framework fits, because none were designed for a world where the scarce input became abundant.
When intelligence is abundant, what are humans for?
Maybe creativity. Maybe judgment. Some people are calling it “taste.” But whatever we call it, we need to build systems that help people find it, and get paid for it. That means new frameworks.
Gross Domestic Prosperity: Measuring What Actually Matters
Gross Domestic Prosperity is a way to challenge whether traditional measures are actually translating into lived wellbeing. Every region in this piece reinforces why we need it. Virginia’s system-level investment is producing compounding returns. North Carolina’s headline metrics are masking a 12% income gap. Seattle’s boom produced displacement. And AI is about to accelerate all of these dynamics.
We know that for every 1% increase in entrepreneurship, there’s roughly a 2% drop in the poverty rate. We know that sector-specific growth, when paired with coordinated ecosystem support, produces more durable outcomes. And we know that thinking about entrepreneurship as workforce development (not as a separate bucket) is one of the most promising shifts happening in economic development right now. The Global Entrepreneurship Monitor’s Total Entrepreneurial Activity (TEA) index has shown sensitivity to macroeconomic disruptions. After the global financial crisis, and COVID, TEA moved. It’ll move again when AI displaces the next wave of workers. The question is whether our systems are ready for the people who show up.
The regions that will weather this transition aren’t the ones with the best headlines. They’re the ones with the most resilient systems: coordinated entrepreneurial infrastructure, connected workforce pipelines, accessible capital networks, and policy frameworks that adapt. The goal is that no one hits the wrong front door. Every person who needs to adapt has a clear path to do so.
This Is the Ecosystem Builder’s Moment
I’ve been writing about this because I’m interested. And I run an AI company that sells to the economic developers and ecosystem builders who are drafting the blueprints for their regions’ futures. I see what they’re grappling with every day.
The knowledge workers are watching SaaS stocks tank and reading about agents that can do their jobs. The service workers are watching automation creep into every entry point they used to rely on. And the investor class is chasing anything that smells like AI.
We need to start making choices. I think those choices will be made at the local level. Extending unemployment benefits to give people time. Building apprenticeship and retraining programs that treat AI fluency like a trade skill. Creating social insurance mechanisms that cushion the transition. Using the economic growth that AI generates to fund programs that create new types of work. And certainly, creating systems that support small business owners and entrepreneurs.
Time is both a weapon and a tool. The speed at which an individual can retool, the speed at which AI systems evolve, and the speed of policy are running at very different rates. The gap between them is where people fall through.
The economy can find a new equilibrium. Getting there is one of the few tasks left that only humans can do.
Whether we build these systems in time is the only question that matters. This feels like the ecosystem builder’s moment. The architects of the systems that enable local economies to thrive, the connectors, and the coordinators who make sure there’s no wrong front door.
I’d like to hear from you. Send me a DM on LinkedIn or email, and let’s find time to talk about how we build more pathways to prosperity for more people.