US allocates $504 million for 'Tech Hubs' in neglected regions

The Biden administration on Tuesday pledged $504 million for a dozen projects across the country in an effort to transform previously overlooked communities into tech powerhouses.

The grants will fund “technology hubs” that aim to boost production of critical technologies in regions including western Montana, central Indiana, southern Florida and upstate New York. The hubs are designed to accelerate the growth of advanced industries in the U.S., such as biomanufacturing, clean energy, artificial intelligence and personalized medicine.

The program reflects a federal effort to expand U.S. funding for science and technology beyond Silicon Valley and some coastal regions, an initiative that Biden administration officials say will help revitalize areas that have traditionally received less government investment. Supporters say the projects will help create “good-paying” jobs and tap into underutilized pools of workers and resources across the country.

The $10 billion program was authorized by the CHIPS and Science Act, which Congress passed in 2022 to boost domestic semiconductor manufacturing and increase funding for scientific research. The idea of ​​spreading technology funding beyond Silicon Valley helped the legislation win broader support from lawmakers representing parts of the country eager to benefit.

The Commerce Department initially considered about 400 applications, narrowing them down to a pool of 31 projects that received “tech hub” designations in October. As of Tuesday, 12 regions had received grants ranging from $19 million to $51 million.

It’s unclear, however, how much additional funding will be available. Although Congress authorized $10 billion for the five-year program when the CHIPS Act was passed, only about $541 million, or about 5 percent, has been allocated so far, which some say could hinder the program’s success.

John Lettieri, managing director of the Economic Innovation Group, a Washington think tank, said a lack of funding had been a major obstacle for the program and that he was skeptical that the awards would lead to substantial transformation in those regions. He said that while the Biden administration was not responsible for the limited funding, he would have preferred to see officials make “large bets on fewer promising emerging technologies and locations” rather than smaller grants spread across a dozen regions.

“It’s not likely that we’re going to get any major technological advances as a result of this half-billion dollars,” Lettieri said, adding that the funds “would help give an incremental boost to these regions but would not lead to transformative results.”

Mark Muro, a senior fellow at the Brookings Institution, said the funding was a “significant down payment” but that additional funding was needed to see more significant economic transformation in those regions. Mr. Muro said he was “not entirely pessimistic” about the prospect of additional money, given the bipartisan interest in the program. However, he said it would be challenging because of political tensions that have made government spending a contentious issue on Capitol Hill.

“There is hope for further investment, but nothing is easy at the moment,” Mr Muro said.

Commerce Department officials have said they would be eager to offer additional rounds of funding if lawmakers allocate more money for the program.

“Simply put: We can do more with more,” Commerce Secretary Gina M. Raimondo said in a statement. “With more funding, we will make more rewards, leading to more technological advances, more regional growth, and many more good-paying jobs.”

One of Tuesday’s beneficiaries was a project in Tulsa, Okla., that aims to develop drones and other autonomous systems for clients including the U.S. military. Tulsa is home to a drone port with labs that can replicate various weather conditions to test drones.

Jennifer Hankins, CEO of Tulsa Innovation Labs, which is leading the $51 million Tulsa project, said the initiative would help reduce the country’s dependence on foreign manufacturing of autonomous technologies and their components.

He also said the project will focus on addressing cultural bias in AI systems, working with Native American tribal nations and black business organizations, among others. “Tulsa has been intentional about who we partner with to address this challenge,” he said.

Another winning project was an Indiana consortium called Heartland BioWorks, which was pledged $51 million to invest in biotechnology and biomanufacturing, including human, animal, and plant biosciences.

Andrew Kossack, executive vice president for partnerships at the Applied Research Institute, which is leading the Indiana project, said the tech hub will take advantage of local advantages, such as the presence of pharmaceutical company Eli Lilly, a network of contract drug manufacturers and other companies specializing in plant and animal sciences.

“The Tech Hubs program is designed to leverage industry clusters like the ones we have here in Indiana in the biotech sector,” he said. The money would put those industry clusters on the map for venture capital and other funding that they might not otherwise invest in “what some might consider ‘flyover country,’” he said.

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