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Cascadia’s AI paradox: A world-leading opportunity threatened by rising costs and a talent crunch
A new report exploring the potential for the Pacific Northwest to stake its claim as the global leader in responsible AI offers a paradoxical view. The Cascadia region, which includes Seattle, Portland and Vancouver, B.C., is described as a proven, promising player in the sphere — but with significant risks that threaten its success.
“We created companies that transformed global commerce,” writes former Gov. Chris Gregoire in a forward to the document. “Now we have the chance to add another chapter — one where Cascadia becomes the world’s standard-bearer for innovation that uplifts both people and planet.”
The Cascadia Innovation Corridor, which Gregoire chairs, released the report this morning as it kicks off its two-day conference. The economic advocacy group’s eighth annual event is being held in Seattle.
The study is built on an analysis by the Boston Consulting Group that ranks Cascadia’s three metro areas against 15 comparable regions in the U.S. and Canada for their economic competitiveness, including livability, workforce, and business and innovation climate. Seattle came in fourth behind Boston, Austin and Raleigh, while Portland ranked 13th and Vancouver 14th.
Over the past decade, the region’s gross domestic product and populations have both grown significantly, and when combined, their economies approach the 18th largest in the world.
Cascadia’s strengths, the report explains, include tech engines such as cloud giants Microsoft and Amazon in Washington, silicon chip manufacturing in Oregon, and quantum innovation in Vancouver, as well as academic excellence from the University of Washington, University of British Columbia and Oregon State University.
But as time goes on and as business and civic leaders aim for the prize of AI dominance, cracks in the system are increasingly troubling.
- Business costs are rising and there are mounting regulatory concerns — but it’s a tricky picture. Seattle, for example, often turns to B&O and headcount taxes to cover costs, while the state struggles to balance budgets in the absence of an income tax.
- Housing affordability is continuing to decline for many residents in these metro areas.
- Skilled tech workers are leaving Portland, in particular, and Seattle relies heavily on foreign workers receiving H1-B visas, which are less certain under the Trump administration.
- The clean, affordable energy that was once abundant in the Pacific Northwest is decreasingly available as droughts reduce river flows that drive hydropower dams and electricity demand increases with rapid data center growth.
The report notes that multiple regions around the U.S. and Canada have created AI-focused hubs with hundreds of millions of dollars in public and private funding to bolster their hold on the sector.
New Jersey has a half-billion dollar “AI Moonshot” program including tax incentives and public-worker AI training programs; New York’s “Empire AI Consortium” has an AI computing training center at the University of Buffalo and startup supports; and California has a public-private task force to increase AI adoption within government services and connecting tech leaders with state agencies.
For its part, Seattle Mayor Bruce Harrell announced a “responsible AI plan” this fall that provides guidelines for the municipality’s use of artificial intelligence and its support of the AI tech sector as an economic driver, which includes the earlier launches of the startup-focused AI House and Foundations.
But what the region really needs to succeed is a collaborative effort tapping all of the metro areas’ assets.
“For Cascadia, the lesson is clear: without a coordinated strategy that links our strengths in cloud computing, semiconductors, and research, we risk falling behind,” states the Cascadia Innovation Corridor report. “Acting together, we can position Cascadia not just to keep pace, but to lead.”
