Maryland Is Begging for Tech Investment and Nobody in DC Is Listening

March 10, 2026

I got to the office at 7:30 this morning and my dad was already here. I don't know how he does it. I made coffee and pulled up the Maryland jobs data on my laptop and just sat with it for a while before anyone else came in. The numbers are bad. Not "needs improvement" bad. Actually bad.

Here's the situation: Maryland lost nearly 25,000 federal jobs in 2025. Not over a decade. Not as part of some slow demographic shift. In one calendar year. According to data from the Bureau of Labor Statistics, Maryland lost nearly 25,000 federal jobs in 2025, including 10,300 during October and November alone. And that's just the direct headcount - it doesn't account for what happens downstream to contractors, local vendors, restaurants near federal buildings, or the tax base that funds everything else in the state.

Maryland has seen the largest number of federal job losses - not including federal contractors - out of any state in the country since the start of the second Trump administration. The largest. In the nation. A state that borders the capital city is getting hit harder than any other state by cuts made in that capital city. There's something almost darkly poetic about that if you're into that sort of thing. I'm not. I think it's a disaster that the region is actively choosing to ignore.

How Deep the Dependence Actually Goes

Before you can understand why this matters for businesses, you have to understand how structurally dependent Maryland's economy has been on Washington. An estimated 269,000 Maryland residents were employed by the federal government in 2023, and there were 158,475 federal jobs physically located in the state that year. That's not a side business. That is the business.

Washington contributed over $150 billion to Maryland's economy during the 2024 federal fiscal year, according to the state's comptroller. And the distribution of that money goes deeper than paychecks. Agencies have awarded billions of dollars of contracts in Maryland - a number that accounts for 40% of federal spending in the state. Federal jobs located in the state reflect 6% of Maryland's overall employment and 10% of overall wages. When your single largest economic driver gets cut with a chainsaw, the vibrations go everywhere.

And the comparisons people are reaching for to contextualize the damage are grim. Maryland Comptroller Brooke Lierman said the six months of DOGE cuts across the federal government have had almost the same effect as two years of cuts under sequestration a decade ago. Sequestration was considered catastrophic at the time. This is worse, faster.

Maryland already faced a $3 billion budget shortfall, but weakening wage growth and shrinking taxable income are making matters worse - with 28,730 federal job losses projected in the state, reducing taxable wages.

The Tech Pivot Everyone's Talking About

Governor Wes Moore has been very loud about wanting to fix this. Give him credit for that - he's not pretending everything is fine. Moore has said it's imperative that Maryland "diversify our economy off of Washington, D.C. - off of the tradition of the 'eds, the feds and the meds,'" and look to "industries of the future" like life sciences, information technology, aerospace, and the defense industry.

The signature move in his tech pivot is the "Capital of Quantum" initiative. On January 14, 2025, Governor Moore joined University of Maryland President Darryll J. Pines and IonQ President and CEO Peter Chapman to announce a landmark public-private partnership to catalyze $1 billion in investments and position the state as a global leader in quantum information science and technology.

By the fall, Microsoft had joined. During the Quantum World Congress, Governor Moore announced that Microsoft will open a new Quantum Research Center at the University of Maryland's Discovery District. And the state landed a DARPA deal with real money attached - the hub, physically located at the University of Maryland's Discovery District, will receive up to $100 million in federal funding over four years, matching the state's investments in quantum computing.

Moore keeps doubling down. He is furthering his efforts to make Maryland a leader in quantum, with his proposed budget aiming to make the University of Maryland the state's quantum hub - including $22 million to expand UMD's Quantum Startup Foundry, which supports early-stage quantum companies.

This is not nothing. This is real capital, real institutional commitment, real corporate partnerships. I want to be clear about that because my opinion here is complicated and I don't want it to read as dismissive of what Moore's administration has actually done.

Here's My Problem With All of It

The problem isn't the quantum initiative. Quantum is real, IonQ is a real company, the University of Maryland has real research infrastructure that took decades to build. I spent about an hour this week going through their ecosystem and it's genuinely impressive. None of that is the issue.

The issue is the scale mismatch. Maryland just lost 25,000 federal jobs in a single year. The federal government was pumping $150 billion into the state annually. You don't replace that with a $1 billion quantum initiative spread over five years, even a good one. The math doesn't work. As one economist put it: "It's a good thing, it's not enough. He's focused on these very narrow segments of the economy, quantum computing is a narrow segment of the economy. It's an emerging part of the economy, but still very small."

And here's where the DC angle really bites. Maryland's pitch to private tech investment is fundamentally tangled up in its proximity to the federal government. That proximity was supposed to be a feature - access to federal agencies, research labs, defense contracts, cleared talent pipelines. Those are the selling points. State officials have been showcasing Maryland as an attractive home for businesses in the life sciences, information technology, and aerospace and defense fields - what Governor Moore has dubbed the "lighthouse" industries for driving growth and decreasing reliance on the federal government.

But those "lighthouse" industries are also deeply federal-dependent. Cybersecurity companies in Maryland largely sell to government. Defense tech companies sell to DoD. Life sciences companies rely on NIH grants. Contracting cutbacks will hit the biotech, cybersecurity, and life sciences industries that fuel Maryland's economy. You can't simultaneously use proximity to Washington as a tech investment pitch while Washington is actively dismantling the ecosystem that made that proximity valuable.

Tory was talking about something completely unrelated the other day - his whole thing about pivoting your identity when the old identity stops working - and I genuinely thought about Maryland. When the thing you built your whole existence around disappears, optimism is not a strategy. You need a structural change. Maryland is still in the optimism phase.

Technical blueprint cross-section illustration showing a massive structural column fractured at its base with dozens of severed connection lines, next to a much smaller replacement column under construction, depicting catastrophic scale mismatch in structural support systems — Ran probably eight or nine iterations trying to get the scale difference between the two columns to read correctly at a glance - the first few kept making the replacement look closer in size than it actually needed to be to make the point. Tory looked at the final one and immediately said 'oh that's grim' without me explaining anything, which told me the composition was finally working.

The Contractor Collapse Nobody Is Talking About Enough

The federal job loss numbers get the headlines, but the contractor story is where small and mid-size businesses should be paying attention. Federal contractors are also a key part of Maryland's economy. Agencies have awarded billions of dollars of contracts in Maryland - accounting for 40% of federal spending in the state. But DOGE is now reviewing every contract and zeroing out many for professional services.

The layoffs and firings happening across government agencies have spread into the contractor workforce that supports them, with multiple companies filing notifications in Virginia and Maryland of workforce reductions. A total of 13 GovCon companies have issued WARN notices in Virginia and Maryland, adding up to 2,425 people losing their jobs.

And those are just the companies large enough to have to file. Small businesses are not required to issue WARN notices, but they continue to bear the brunt of contract cancellations and the economic impact of unpaid invoices - some of which date back to work delivered in October and November.

Here's what that actually looks like on the ground: Quentin Adams had years of experience developing websites and apps as a federal contractor, living his dream developing websites and apps as a contractor for the federal government. After losing his contract, he couldn't find work. DOGE had flooded the market. "I have software development skills; I have some business skills; I have some project management skills, but I can't seem to get a job," he said. Experts say the surge in federal layoffs has intensified competition for tech and contracting roles, especially in the D.C. region.

This is where the DC-isn't-listening headline starts to feel real to me. Not at the policy level, but at this level. A software developer with a decade of experience in the region can't find work because the entire labor pool is oversaturated with people who built their careers around government proximity - and the government just moved the goalposts.

The Irony in the Room

Here's a thing nobody is saying clearly enough: Washington is simultaneously the reason Maryland has a tech problem and the only entity large enough to actually fix it quickly. The federal government singlehandedly created the crisis through DOGE cuts. And the quantum initiative - Moore's best response - itself relies on matching federal funds from DARPA, competing for federal grant programs, and selling to federal agencies. The escape hatch from federal dependency requires federal cooperation to open.

That's not a knock on Moore. There's no governor in the country who could fully replace $150 billion in annual federal economic activity with a state-level tech initiative on a five-year timeline. But it does mean that the headline - Maryland begging for investment - undersells the actual problem. Maryland isn't just being ignored. Maryland is trapped in a relationship with an institution that is actively shrinking and somehow still the only realistic rescuer.

According to the Regional Economic Studies Institute at Towson University, if federal employment were to decline by 30,000 with 10% less in federal spending, the state's total employment would decrease by close to 100,000. That's a depression-level number for a single state. The quantum initiative - as real and valuable as it is - creates hundreds of high-skill jobs. The gap is enormous.

What This Actually Means If You're Running a Business in the Region

Derek pulled up some article about regional economic recovery this week while we were both waiting on a report to run, and he started explaining why he thinks it'll all be fine because "the fundamentals are solid." I said the fundamentals got restructured in February and haven't recovered. He went back to whatever he was reading. I don't know if I was right to push back on that. But I still think I was.

If you're running a B2B company in Maryland or the broader DC metro, here's the honest take: the talent pool is flooded right now with displaced federal workers and contractors who have very real skills and very urgent financial situations. The average federal wage in Maryland is $126,468, higher than the private sector average wage of just over $73,000. These people are not going to accept that kind of pay cut quietly, but a lot of them eventually will. That's a hiring opportunity, not a charity case.

At the same time, if your business depends on Maryland-based government contracting work - directly or several degrees removed - you should assume the volatility continues. Counties, which rely heavily on local income tax revenue, will particularly feel the squeeze with federal job losses. Contracting slowdowns could undercut 10% of Maryland's private-sector GDP.

The quantum and cybersecurity bets Moore is making are real, but they're long bets. Since the launch of Moore's quantum initiative, nearly a dozen startups have joined the university's growing quantum ecosystem. That's a start. It is emphatically not a replacement economy.

The business intelligence side of me - and I have spent a lot of late nights with business intelligence tools trying to map out economic signal data for exactly this kind of regional story - keeps coming back to the same conclusion: Maryland's private tech ecosystem is going to look very different in three years, and the companies that survive will be the ones that figured out early that the federal government is no longer a stable anchor. That means selling outside the region. That means building products rather than services. That means treating the talent glut as an asset before someone else does.

The Part That Genuinely Frustrates Me

Maryland has real assets. The University of Maryland has more than 200 quantum faculty. Johns Hopkins is one of the greatest research institutions in the world. The state has a concentration of cleared technical talent that most states would spend billions to create. None of that disappeared overnight.

But the story about Maryland's tech future keeps getting told in the language of press releases. "Lighthouse industries." "Capital of Quantum." "Innovation ecosystem." Those words are fine. They're not a plan. They're an aspiration dressed in business casual.

What I haven't seen enough of is the harder conversation: what happens to the existing tech businesses in the state during the transition period? What happens to the mid-size cybersecurity firm with 80% of its revenue tied to government contracts? What happens to the IT staffing company that placed 200 contractors who just got RIF'd? The quantum hub is great for 2030. We need something for 2026.

Linda told me yesterday that the piece I wrote last week was good. I've been thinking about whether she meant it. That's probably not relevant here. But the feeling of doing real work and not being sure anyone's actually reading it - that feels like the right emotional register for Maryland's tech investment pitch right now. Governor Moore is doing real work. The announcements are substantive. The question is whether anyone in a position to actually move capital at scale is actually paying attention.

Right now, the answer looks like no.

The federal government defunded its own presence in Maryland and then wandered off. Private capital hasn't rushed in to fill the gap - and why would it? Federal employment plays a major role in Maryland's economy, with more than 158,000 federal jobs based in the state as of 2023. Even larger job declines are expected as deferred resignations take effect, and concerns are mounting about workforce stability and local economic impacts. Investors price uncertainty. Maryland right now is a state with enormous assets, a credible governor trying to pivot, and a $150 billion structural hole in its economy. That is not a pitch that sells itself.

Maryland needs DC to at minimum stop making it worse. Instead, DC keeps finding new ways to make it worse. And the tech investment Maryland is begging for - the quantum labs, the cybersecurity hubs, the life sciences campuses - requires exactly the kind of long-term stability that the current federal posture is systematically destroying.

That's the trap. And I don't think anyone in Washington is in any hurry to spring it.