Why Economic Development's Biggest Gap Is Not Recruitment
TL;DR
Most communities celebrate the announcement and move on. The real work starts after the ribbon-cutting -- 12 to 24 months of operational buildout that determines whether a project survives or quietly disappears. We call this the fulfillment gap. Founder-led manufacturers arriving without corporate infrastructure need jurisdictional intelligence, not just incentive packages. Communities that invest in post-announcement execution -- from Tier 1 gravitational fields to Tier 4 micropolitans with defense depot adjacency -- win projects that actually stick. Announcements are easy. Execution compounds.
It usually happens right after the ribbon-cutting.
The governor shakes hands. The economic development team takes a well-earned victory lap. The press release hits the wire. And then, quietly, the site selector flies home.
I saw this play out recently in a mid-sized Midwest metro. The foreign founder had just committed $75M to build his first U.S. manufacturing facility. The local incentive package was masterful. The announcement was triumphant. But at the celebratory dinner, the founder pulled me aside. He looked entirely overwhelmed.
"The recruiters did their job," he told me. "But who is actually going to help us build this when they leave tomorrow?"
That question is the gap. And it is not a small one.
THE FULFILLMENT GAP
The recruitment machinery works. The International Economic Development Council trains thousands of professionals annually. The Site Selectors Guild facilitated $141 billion in announced capital investment in 2024 alone. SelectUSA drew over 5,500 attendees from more than 100 countries last year. The profession is real, the people are skilled, and the pipeline is full.
Once a company selects a location, however, the recruitment infrastructure largely steps back. The site selector's engagement concludes. The economic development organization (EDO) celebrates the announcement and turns to the next prospect.
What the arriving company actually needs is operational architecture. They need entity formation, regulatory navigation, supply chain integration, workforce pipeline development, and incentive compliance management. This is the operational buildout phase - 12 to 24 months of intensive project management that determines whether an announced project becomes a sustained operation or a quietly abandoned facility.
Some states understand this. Virginia's Talent Accelerator Program provides fully customized recruitment and training solutions at no cost to qualifying companies, with in-house instructional designers and video producers who begin delivering services before a project is even announced. Every manufacturing project is structured as a direct partnership with the nearest community college. Virginia invested in making the post-announcement phase work. That is why they consistently rank at the top.
Most state and county EDOs do not have this capacity. They have recruitment marketing, incentive packages, and a polite handoff to the company's own resources after the press release.
THE COST OF UNDERPERFORMANCE
The data reveals the quiet cost of this gap. Bent Flyvbjerg and Dan Gardner, in How Big Things Get Done (Oxford University Press, 2023), analyzed over 16,000 projects across industries and found that fewer than 1% delivered on budget, on time, and with expected benefits.1 McKinsey Global Institute research documents the same structural pattern in capital projects, finding that schedule and cost overruns are the norm rather than the exception.2
Foreign direct investment data confirms the downstream toll. According to OECD and UNCTAD reporting, roughly 60 to 80 percent of announced projects ultimately proceed - meaning one in five never materializes. (3,4) Many of those that do still underdeliver on scale or scope. High-profile cases like Foxconn Wisconsin - a state potentially on the hook for $1.34 billion from a project that never delivered at promised scale - illustrate the headline risk. But the more common pattern is quieter: a project lands, underperforms its commitments, and slowly shrinks while the EDO has already moved on to the next announcement.
Generating announcements is easy. Making them stick is the challenge. Most communities fail silently.
DENSITY, TIERS, AND FUNCTIONAL PROXIMITY
The fulfillment challenge varies dramatically by community type - and the solution depends on understanding what each location can actually deliver. A four-tier framework helps clarify the distinction.
A Tier 1 designation does not describe a single city. It describes a gravitational field. The Chicago MSA encompasses more than nine million people across northeastern Illinois and northwestern Indiana - and within that field, smaller communities like Michigan City, Indiana, North Chicago, Illinois, and Bradley, Illinois participate in Tier 1 economics without bearing Tier 1 cost structures. The Phoenix MSA similarly includes 24 municipalities - among them Maricopa and Peoria, Arizona - each distinct in character but all drawing from the same deep labor markets, multi-cluster industrial base, and international air connectivity. In a Tier 1 environment, the arriving manufacturer plugs into an existing ecosystem. The fulfillment challenge is integration: connecting the firm to the right nodes where cluster effects already operate, whether automotive suppliers in the Great Lakes corridor or semiconductor partners in the Valley of the Sun.
A Tier 2 metro offers at least one mature industrial cluster with genuine labor depth. Supply chain partners are reachable, institutional infrastructure exists, and fulfillment focuses on ecosystem alignment rather than ecosystem construction. Kansas City is a strong example - a mid-sized metro with established logistics, healthcare, and advanced manufacturing sectors, where talent and expertise are often globally distributed among its diaspora. The Back2KC initiative, led by Jessica Powell, addresses this precisely: it functions as annual network reintegration, reconnecting Kansas City natives and alumni now working in technology, venture capital, and corporate leadership back into the region's operating ecosystem. Returning professionals join startup leadership teams, become angel investors, mentor emerging founders, and open hiring pipelines. The effect is what Powell describes as rebuilding network density - the connective tissue that allows companies to build once they arrive.
A Tier 3 metro frequently carries a dual identity: state capital and university town. Columbus, Ohio, and Madison, Wisconsin exemplify this category. State government employment provides a stable economic base and institutional demand. A major research university generates a continuous talent pipeline and applied research capacity. The result is a metro with genuine cluster depth in one or two sectors - in Columbus, healthcare IT, logistics, and increasingly defense-adjacent advanced manufacturing - while remaining nimble enough that a new arrival can become a visible participant quickly. The OH.io fund, backed by two-time Columbus software founder Ratmir Timashev, is deploying $100 million to build a commercial layer on top of Ohio State's talent pipeline. The O.H.I.O. Fund separately has deployed $356 million in committed capital and closed 30 investments since 2024, including luring a California manufacturing company to relocate operations to Columbus entirely. Tier 3 metros are not waiting for recruiters. They are building the ecosystems that make projects stick.
A Tier 4 micropolitan area - TexAmericas Center in Texarkana, Texas, or Cedar City, Utah - faces a fundamentally different problem. There is no pre-existing cluster to join. Labor pools are thinner, specialized suppliers may be hundreds of miles away, and the company must help build its ecosystem from the ground up. But Tier 4 is not simply a disadvantaged version of Tier 1. The communities that succeed at this tier do so because of a specific asset mix that larger metros cannot replicate: base or depot adjacency, a workforce already shaped by defense culture, lower cost of operations, and brownfield infrastructure available at cost basis unavailable anywhere else. TexAmericas Center works not despite its location but because of it - sitting adjacent to Red River Army Depot, the Army's Center of Industrial and Technical Excellence for tactical wheeled vehicles and the Bradley Fighting Vehicle, and home to the Skyfoundry initiative positioning RRAD as the Army's organic industrial base for small unmanned aerial systems manufacturing.5
What makes TAC genuinely competitive is not the acreage or the incentive package alone. It is the combination: depot adjacency that provides an immediate defense-familiar demand signal, a ready-to-work and willing-to-train labor pool shaped by generations of industrial and military employment, and local higher education - Texarkana College and Texas A&M Texarkana - providing a continuous pipeline. The fulfillment challenge in Tier 4 is not integration. It is ecosystem design - building the operational architecture around a specific manufacturer - and the communities that invest seriously in that capability create a durable competitive advantage that no incentive package alone can replicate.
HOW WE UNDERSTAND CLUSTER GEOGRAPHY
The tier framework above describes structural conditions. But how a company actually experiences a cluster is as much a matter of perception and behavior as it is geography. Two foundational works in urban design illuminate this. Christopher Alexander's A Pattern Language (1977) argued that human communities are defined by the patterns of interaction people actually engage in - the paths they walk, the institutions they gather around, the distances that feel navigable - rather than by administrative boundaries or map coordinates. Kevin Lynch's The Image of the City (1960) went further, demonstrating through fieldwork that people's mental maps of urban space are constructed from landmarks, paths, and edges they personally experience - not from the coordinates on a planning document. Applied to economic clusters, both insights point in the same direction: a cluster is not defined by the county line or the MSA boundary. It is defined by where people actually go, who they see when they get there, and how often they make the trip.6,7
A researcher at Rosalind Franklin University in North Chicago can drive south on I-94, stop at a cluster conference in the Loop, and continue to the CSL Behring plasma therapeutics manufacturing campus in Bradley, Illinois - Kankakee County's largest employer with over 1,500 workers and a 1.8 million square foot expansion underway - and return home the same evening.8 By map, North Chicago and Bradley are 60 miles apart across two counties. By the pattern of professional life, they are neighbors. Both are active participants in the Chicago Life Sciences corridor.
This distinction matters practically. When evaluating whether a Tier 1 or Tier 2 community can support an arriving manufacturer, the relevant question is not whether suppliers or collaborators are within the MSA boundary. It is whether the people a company needs to interact with can do so at a frequency and ease that creates genuine working relationships. Functional proximity - the felt sense that the right people are reachable - is what generates the social collision that makes clusters productive. Communities that understand this can make honest claims about their cluster participation. Communities that do not end up overpromising on adjacency and underdelivering on support.
TWO POPULATIONS, TWO GAPS
Economic developers often point to existing Business Retention and Expansion programs. These programs are vital, but they serve a different function than founder-led FDI buildout. Project liaisons are not operational architecture.
There are two distinct populations arriving in our communities. The professional CEO arriving with a Fortune 500 expansion brings corporate infrastructure. Legal teams, real estate departments, and government relations staff travel with the project. The existing ecosystem - IEDC-trained EDOs, Guild-level site selection, state programs like Virginia's Talent Accelerator - serves this population well.
The founder CEO - typically running a $50M-$500M international company establishing their first U.S. operation - has none of this. No corporate real estate department. No in-house government relations team. No prior experience navigating U.S. entity formation, state incentive compliance, or municipal permitting. They met an EDO at a SelectUSA spinoff or through a trade commissioner introduction, and now they need to actually build.
This founder is too large for the SBDC. Too small for a Guild-level engagement. Too operational for the chamber luncheon. They need Jurisdictional Intelligence - the disciplined mapping of how policy mechanics, procurement authorities, institutional incentives, and geographic realities converge at a specific location. They need market validation before capital commitment. And they need a sustained operational partner through 12 to 24 months of buildout, not a rotating cast of transactional service providers who each exit after their narrow scope is complete.
For defense-adjacent manufacturers, federal innovation vehicles - SBIR and OTA contracts - now offer a structured path to validate U.S. demand before committing to a physical facility. This is the Virtual Path before the Physical Path: establishing a domestic presence through an innovation contract, proving the market, and then making the facility decision with real data rather than a prospectus. The sequencing is not just financially prudent. It is the difference between an announcement that sticks and one that quietly disappears.
THE OPPORTUNITY
For EDOs that have landed or are pursuing projects: the announcement is the beginning, not the end. A community's reputation compounds based on whether the project is thriving at year five, not on how many press releases it generated at year zero.
The density question is actually an opportunity. Tier 3 and Tier 4 communities that invest seriously in fulfillment infrastructure create a durable competitive advantage precisely because the gap is wider there. A Tier 4 community like TexAmericas Center, with its defense depot adjacency and brownfield infrastructure, is not competing with Chicago on labor depth or with Phoenix on semiconductor cluster density. It is competing on a different axis entirely: the ability to rapidly design and activate a functional operating environment around a specific manufacturer. That is a capability that cannot be replicated by a larger metro's overhead.
The economic development profession has built remarkable recruitment infrastructure over four decades. The machinery works. The communities that compete on outcomes - that build the connective tissue Back2KC is rebuilding in Kansas City, that develop the commercial layer OH.io is constructing in Columbus, that design the operational architecture for the founder CEO who has no corporate real estate department - those communities will not need to win on incentives alone.
They will win because projects actually survive there.
Michael T. Edgar
Michael T. Edgar is the CEO of SelectGlobal, LLC, a jurisdictional intelligence firm that connects allied-nation manufacturers with U.S. federal defense demand through structured pathways that validate opportunity before requiring capital commitment. He serves on the board of the International Trade Association of Greater Chicago and is a former member of the U.S. Investment Advisory Council.
SelectGlobal's Constellation(TM) network - 68+ trade commissioners and specialized alliance partners - provides operational buildout capacity alongside EDOs, not instead of them.
CITATIONS
1 Flyvbjerg, Bent, and Dan Gardner. How Big Things Get Done. Oxford University Press, 2023.
2 McKinsey Global Institute. "Don't Cancel or Coddle At-Risk Capital Projects - Challenge Them." McKinsey & Company, 2025.
3 OECD. FDI in Figures. Organisation for Economic Co-operation and Development, 2025.
4 UNCTAD. World Investment Report 2025. United Nations Conference on Trade and Development, 2025.
5 Red River Army Depot (RRAD). Center of Industrial and Technical Excellence, Tactical Wheeled Vehicles and Bradley Fighting Vehicle System, Texarkana, TX. Skyfoundry initiative: Boozman, Cotton et al., legislation introduced 2025 to establish drone production capacity at RRAD using Army organic industrial base. Supported by TexAmericas Center and Texarkana Chamber of Commerce. See redriver.army.mil and txktoday.com, July 2025.
6 Alexander, Christopher, Sara Ishikawa, and Murray Silverstein. A Pattern Language: Towns, Buildings, Construction. Oxford University Press, 1977.
7 Lynch, Kevin. The Image of the City. MIT Press, 1960.
8 CSL Behring. Kankakee, Illinois manufacturing campus. 1,500+ employees; 1.8 million sq ft expansion underway. See cslbehring.com and Illinois Manufacturers Association site documentation, 2024.
