Seattle Mayor Katie Wilson signed an executive order Tuesday directing the city’s Office of Economic Development to propose a new Seattle Strategic Initiatives Fund, an attempt to stop mid-sized firms from leaving town once they outgrow local startup incubators. The order lands alongside a newly published business climate study that describes Seattle’s economy in blunt terms: sluggish, increasingly dependent on a handful of large companies, and losing ground to rival cities.
The report, titled “Seawall: Building a Resilient Seattle Economy,” was commissioned by Seattle’s Office of Economic Development in 2025 and written by the economic strategy firm Formation under principal Ryan Donahue, according to the city’s own account. It was actually instigated under former Mayor Bruce Harrell’s administration, as reported by KUOW, though Harrell conceded the November 2025 election to Wilson, who took office in January, a transition Hoodline detailed in May. Wilson’s Tuesday order, Executive Order 2026-06, directly addresses concerns raised in that report, per KUOW’s reporting, and asks the economic development office to design a fund that could invest directly in startups so they stick around after reaching mid-sized status.
A City Betting on a Few Big Names
The Seawall report found Seattle is becoming fiscally and economically dependent on a small number of large firms, per the report cited by KUOW. Four large companies alone account for roughly a quarter of all of Seattle’s software engineering jobs, the study found, leaving the city vulnerable to any shift in those employers’ hiring patterns. That concentration stands in contrast to San Francisco, where large firms make up software engineering jobs across 39 companies, and San Jose, where 18 companies share that role, according to the same report.
Layered on top of that concentration risk is a broader technology disruption story. The report found the United States has seen a 20% decline in jobs for young software developers, with workers aged 22 to 25 experiencing an 18% decline in AI-exposed positions. Seattle, per the report, is exposed to 42% more AI disruption than the national average, a statistic that helps explain why City Hall is treating the mid-sized firm exodus as urgent rather than cyclical.
Why Companies Keep Leaving After They Grow Up
Seattle has a healthy startup culture, according to the report, but mid-sized firms tend to leave the city once they outgrow it, with San Francisco, Austin, and Denver cited as likely destinations. Jon Scholes, CEO of the Downtown Seattle Association, said Seattle’s current economic performance can best be described as sluggish, and argued the city should become more competitive in attracting jobs and investment rather than adding new taxes. Scholes said Seattle does not need more business taxes, per KUOW’s reporting, a position that echoes his organization’s own June report finding downtown Seattle lost roughly 30,000 jobs, saw office vacancy climb to 32%, and suffered more than $10 billion in lost commercial property value since the JumpStart payroll tax took effect in 2021 — a period during which neighboring Bellevue saw concurrent job growth…