This is a really good point. However, I think we really should be making a distinction between skilled and unskilled labor. The reason wealthy nexuses of compar

This is a really good point. However, I think we really should be making a distinction between skilled and unskilled labor. The reason wealthy nexuses of comparative advantage emerge is generally due to skilled labor. You get a network effect from having that labor after which you may no longer need to offer incentives. The Bay Area is a great place to start a tech company because of all the tech workers/investors/incubators, NYC for hedge funds and IB, Chicago for trading, DC for nonprofits, etc. And generally other areas can experience a similar phenomenon owing to natural resources. However, I think an area makes a mistake in investing (via subsidies/tax breaks/whatever) in unskilled labor when it’s not tied to their natural resources. The difference is simple: you don’t gain the network effect from unskilled labor because, well, it’s unskilled. A distribution center doesn’t really make it better for a call center to pop up in the same area. That said, all large business will cause at least somewhat of an incentive to build other large businesses by it due to infrastructure.