US economic development spends billions but ignores the builders

Economic development policy in the US has focused on landing finished projects rather than cultivating the builders, skilled workers and entrepreneurs who create them.

US economic development policy prioritizes incentives for data centers and corporate headquarters over cultivating the builders, skilled trades and entrepreneurs needed to create them, a Wall Street Journal op-ed argues.

"Perhaps we are starting at the wrong end of the production line," Tim Carew, a Chicago-based contributor to the Journal, wrote in a letter published July 16 responding to former Starbucks Chief Executive Howard Schultz's column on Washington state's growth trajectory.

Carew's critique extends beyond Washington. Governments nationwide debate zoning, density mandates and subsidy packages for major developments while the pipeline of home builders, construction lenders and skilled labor capable of executing projects remains thin. "Public policy should cultivate more participants rather than enlarging the opportunities available to the biggest players already at the table," he wrote.

The argument arrives as US housing starts have run below the estimated 1.5 million annual pace needed to meet demographic demand, according to National Association of Home Builders estimates, and as states compete for a shrinking pool of large corporate relocations. "The answer to stagnation may be surprisingly basic: Build the builders," Carew wrote.

The letter targets a structural flaw in how US governments approach growth. Economic development agencies typically measure success by the headline project landed — a manufacturer's plant, a tech company's campus — rather than by the health of the ecosystem that produces new businesses. Incentive packages for individual projects can run into hundreds of millions of dollars, yet the underlying capacity to build receives comparatively little systematic support.

The same dynamic applies to housing. Local governments spend years rewriting zoning codes and debating affordable-unit mandates, but the number of residential construction firms has not kept pace with demand. Without builders capable of turning approved projects into completed homes, regulatory reform alone produces limited results.

The Housing Pipeline Gap

US homebuilders have faced persistent shortages of skilled labor since the 2008 financial crisis drove hundreds of thousands of workers out of the industry. Trade school enrollment has not recovered enough to replace the lost workforce, and the number of small and midsize home builders has declined as regulatory complexity and land costs favor large national firms. The result is a construction sector that cannot scale output even when demand and financing are available.

Beyond the Incentive Model

Carew's broader point applies beyond housing. Economic development that focuses on landing the next data center or corporate headquarters neglects the earlier stages of the production line: the entrepreneur who needs seed capital, the technician who needs certification, the small contractor who needs a surety bond to bid on public projects. Cultivating those participants, he argues, would produce more durable growth than enlarging opportunities for the largest players already at the table.

For Washington state, the immediate stakes are measurable. Schultz's column warned that the state's regulatory environment and tax structure risk driving growth to competing states. Carew's response reframes the problem: even if the policy environment improves, growth will not materialize unless the people and firms capable of building are in place.

This article is for informational purposes only and does not constitute investment advice.