US awards $504 million for ‘tech hubs’ in overlooked regions

The Biden administration on Tuesday awarded $504 million to a dozen projects across the country to transform historically overlooked communities into tech powerhouses.

The grants will fund “tech hubs” that aim to boost production of critical technologies in regions such as western Montana, central Indiana, South Florida and upstate New York. The hubs are intended to accelerate the growth of advanced industries in the United States, such as biomanufacturing, clean energy, artificial intelligence and personalized medicine.

The program reflects a federal effort to expand U.S. science and technology funding beyond Silicon Valley and some coastal areas, 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, a sweeping bill lawmakers passed in 2022 to boost domestic semiconductor production and increase funding for scientific research. The idea of ​​spreading tech funding beyond Silicon Valley helped the legislation gain broader support from lawmakers representing parts of the country eager to benefit.

The Commerce Department initially considered nearly 400 applications, narrowing them down to a group of 31 projects that were given the tech hub designation in October. On Tuesday, 12 regions subsidies won which amounted to between $19 million and $51 million.

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

John Lettieri, CEO of the Economic Innovation Group, a Washington think tank, said the lack of funding is a major obstacle to the program and he was skeptical that the awards would result in a substantial transformation in those regions. He said that while the Biden administration was not to blame for the limited funding, he would have preferred to see officials “make big bets in a smaller number of promising emerging technologies and places,” rather than smaller grants spread across a dozen regions.

“It is not likely that we will get major technological breakthroughs as a result of this half a billion dollars,” Mr Lettieri said, adding that the funds “would help give these regions a step-by-step boost, but would not lead to transformative results.”

Mark Muro, a senior fellow at the Brookings Institution, said the funding was an “important 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. Still, he said it would be a challenge because of the 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 said they would be happy to provide additional funding if lawmakers appropriated more money for the program.

“Simply put, we can do more with more,” Commerce Secretary Gina Raimondo said in a statement. “With more funding, we will award more prizes, leading to more technological advancement, more regional growth, and many more good-paying jobs.”

One of the beneficiaries Tuesday was a project in Tulsa, Okla., that aims to develop drones and other autonomous systems for customers such as the U.S. military. Tulsa is home to a drone port with labs that can simulate different weather conditions to test drones.

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

She also said the project would focus on addressing the problem of cultural bias in AI systems, working with Native American tribes and Black business organizations, among others. “Tulsa has been intentional about who we partner with to address this challenge,” she said.

Another winning project came from an Indiana consortium called Heartland BioWorks. The consortium was promised $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 technology center would leverage local advantages, such as the presence of pharmaceutical company Eli Lilly, a network of contract drug manufacturers and other companies focused on plant and animal sciences.

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