A merica’s next economic renaissance may be driven not by tech giants on the coasts alone, but by investments in artificial intelligence (AI) infrastructure spread across the nation’s heartland. AI is increasingly seen as a general-purpose technology akin to electricity – a foundational innovation that can boost productivity across sectors. Just as railroads, highways, and broadband transformed the economic landscape in earlier eras, AI-related infrastructure, from data centers and fiber networks to AI research labs, now represents critical economic scaffolding. This 4-part series examines how treating AI as essential infrastructure can catalyze small-town revitalization, creating new opportunities in regions often left behind in the digital age.
Small towns possess unique advantages – cheaper land and power, tight-knit communities, and in many cases a proud industrial heritage – yet they have struggled to partake in the tech boom that fueled coastal cities. Currently, the AI economy is highly concentrated: the San Francisco Bay Area and 13 early-adopter metros account for over half of U.S. AI activity1. Rebalancing this geography is both a challenge and an opportunity. Recent policy initiatives, such as the federal Tech Hubs program, signal an urgent push to “unlock development in new places” and seed tech growth beyond the usual hubs. The convergence of supportive public policy and private capital will be pivotal—not only in empowering smaller communities to actively shape the AI revolution, but also in securing America’s strategic advantage in the global AI race.
Each part of this series addresses a core dimension of the challenge:
- Part 1: AI Infrastructure as an Economic Development Tool – Makes the case for conceptualizing AI capabilities as public infrastructure,drawing parallels to past infrastructure-driven booms and outlining the physical and digital foundations required.
- Part 2: Economic Geography 101 – Analyzes the current concentration of AI activity and explores how strategic investments and remote-work trends could distribute economic gains more evenly, including to micropolitan areas and rural regions.
- Part 3: The AI Working Class – Considers the workforce implications: how AI can create new middle-skill jobs in small towns, augment (rather than replace) blue-collar work, and how giving local residents equity stakes in AI ventures can ensure broad-based benefits.
- Part 4: Partnerships, Policies and Permits – Examines how smart policy, from tax incentives to streamlined permitting, can align with private and philanthropic capital to drive AI projects in small towns, using blended finance models to de-risk investments.
The deep-dive sections then tackle practical enablers of this vision. These include Civic Infrastructure (the local institutions and partnerships needed to support innovation), Permitting (fast-tracking the approvals for AI facilities and infrastructure projects), Power (meeting AI’s immense energy needs with resilient grids and clean energy in smaller markets), Education & Labor Pipeline (training and attracting the talent needed for AI-era jobs), and Cultural Brand Strategy (rebranding and marketing small towns as attractive destinations for tech investment and remote workers).
Throughout, we highlight real examples – from a 300 MW data center project in Dolton, Illinois that repurposes an old World War II site, to the Tulsa Remote program that has lured thousands of skilled workers to Oklahoma – illustrating how vision and initiative can translate into tangible outcomes on the ground.
The concluding Recommendations section offers a roadmap for policymakers, investors, and community leaders. Key recommendations include recognizing AI infrastructure as a national priority on par with transportation and energy infrastructure, fully funding and expanding place-based tech investment programs, streamlining regulatory processes, investing in workforce development pipelines, and ensuring community buy-in through local benefit-sharing. Ultimately, bridging the urban-rural tech gap is not just a matter of economic equity – it is about leveraging America’s full talent and resource landscape to drive innovation. By putting AI infrastructure to work as a tool for inclusive growth, the nation can revitalize small towns and bolster its overall competitiveness in the AI-driven economy.
Introduction
Over the past few decades, many American small towns have seen factories shuttered, jobs outsourced, and young talent drift toward big cities. This urbanization of opportunity has left behind a patchwork of communities striving for a new economic purpose. At the same time, we stand on the cusp of an AI revolution poised to redefine productivity much as steam power and electricity did in prior eras. The convergence of these two narratives – small-town decline and AI’s ascent – raises an intriguing question: Can AI be harnessed as infrastructure to spark a small-town revival? This series investigates that question with a mix of optimism and clear-eyed analysis, drawing on expertise in technology, economics, infrastructure, urban planning, and public policy.
America’s Economic Evolution by Infrastructure Era. The idea of “AI as infrastructure” builds on historical precedent. Each major economic era was enabled by distinctive infrastructure that determined where growth occurred. In the 19th century railroads and canals allowed rural farm towns to connect to national markets, lifting agrarian communities. The 20th century’s mid-century highways and electrical grid fueled the rise of factory towns and suburbs across the continent. In the late 20th century, the digital era centered on coastal cities, which benefited from early internet infrastructure and talent concentrations. Now the AI era could blur old geographic divides by leveraging distributed computing power, high-speed networks, and new training pipelines – if these are deployed widely and not only in existing tech enclaves.
| Era | Economic Engine | Spatial Anchor | Enabling Infrastructure |
|---|---|---|---|
| Agrarian | Land & Agriculture | Farmland | Canals, irrigation systems |
| Industrial | Mass Labor & Capital | Factory towns | Railroads, coal power, steel mills |
| Digital | Information | Coastal cities | Fiber-optic networks, data centers, cloud computing |
| AI | Data & “Edge” Compute | Distributed “edge nodes” | AI supercomputers, local data centers, abundant power supply, advanced labs |
The stakes for small-town America are high. The nation’s AI industry is still emergent – AI-related jobs today are <1% of all job postings – but it is growing fast, with AI startups now 5% of new tech companies (up from <1% a decade ago) . As AI scales, it could either reinforce the dominance of a few superstar cities or become a more distributed engine of growth. This series argues for the latter path: a deliberate strategy to spread AI’s benefits, viewing AI infrastructure as a tool for regional development. By building data centers in Iowa or Alabama, establishing AI labs in mid-sized cities, and training workers in Appalachia to participate in the AI supply chain, the U.S. can bolster economic resilience and social cohesion. Not every small town will become an “AI hub,” just as not every town got a railroad stop in the 1800s, but those with strategic vision and support can seize this moment.
Each part of the series digs into both the opportunities and the hurdles in realizing this vision. We review success stories where public-private partnership and local initiative have brought tech investment to smaller locales, as well as cautionary tales of projects that faltered due to lack of skills or community pushback. We also provide data-driven insights – for example, highlighting that AI activity remains highly concentrated (the Bay Area plus 13 metros hold over half of AI jobs, patents, and research output ) even as remote work has begun to redistribute some tech talent. We examine policy levers at all levels, from federal R&D funding and tax credits down to municipal zoning codes and regional workforce programs. The series emphasizes that no single policy is a panacea: success requires an ecosystem approach – aligning infrastructure, workforce, capital, and community readiness.
By the end of this series, readers will have a comprehensive understanding of what it will take to turn AI’s promise into small-town prosperity – and a roadmap for making it happen.
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Brookings Institute. The Geography of AI. 2021.
https://www.brookings.edu/articles/the-geography-of-ai/