Today, after an exhaustive, multi-year development and awarding process, the U.S. Economic Development Administration (EDA) announced the implementation awards of the Regional Technology Innovation Hubs Program (Tech Hubs). Going forward, these hubs will be the latest focus of the nation’s recent effort to foster high-potential technology clusters in new locations.
The new grants, conceived by Brookings Metro and others in 2019 and funded through the CHIPS and Science Act of 2022, are a down payment on an authorized (but underfunded) $10 billion program to spread the benefits of tech-enabled growth to more places across the United States.
In October 2023, EDA selected 31 Tech Hub-designated companies from 379 applications to receive multi-year implementation grants. Currently, EDA is awarding implementation grants ranging from $19 million to $51 million to 12 consortia to execute locally-developed plans to achieve global economic prominence in key industries within 10 years. These funds will support focused cluster strategies, accelerate commercial scale-up, and develop the workforce of the future while achieving key national goals such as ensuring America’s national security, strengthening supply chain resiliency, and improving economic inclusion.
As such, this new award stands out as a particularly prominent element in the nation’s ongoing multifaceted efforts in recent years to leverage so-called “place-based industrial policy” to foster national economic development, based on the idea that deliberate efforts to unlock growth in new locations are a compelling strategy for enhancing the nation’s technological advantage, international competitiveness, and national security.
Given all this, it’s worth taking a moment to reflect on this week’s announcements and take a quick look at the nature of the awards (and the consortium hosts that won them) and what the future holds for the program. Here are my first three takeaways:
The Tech Hub Awards support a diverse range of regions, technologies and institutions.
By law, the EDA had to select tech hubs from across the country, with certain minimum requirements for local participation. The result was a very diverse geographic map. The Tech Hub Implementation Awards clearly seek to broaden the geography of innovation in the country, with a mix of established regional business hubs (e.g., Indianapolis, Milwaukee), university towns (e.g., Urbana-Champaign, Illinois, Madison, Wisconsin), and emerging hubs of advanced industries (e.g., Missoula, Montana; Bozeman, Greenville, South Carolina; and Tulsa, Oklahoma). According to the EDA, 10 of the 12 hubs that received Implementation Awards support small, rural communities. Conversely, only two awardees are from the 20 largest U.S. metropolitan areas (Denver and Miami).
Map 1
The program identified high-potential clusters in 10 key technology focus areas, including artificial intelligence, biotechnology, and other advanced technologies that are critical to generating economic value and advancing U.S. interests in geopolitical competition, climate change, and economic security. With Congressional funding allocations falling significantly short of the original requested benchmark, EDA seeks to fund precise interventions that can have a larger ripple effect on both advancing key national technologies and missions and fostering economic growth and opportunity in funding regions.
For example, Montana’s diverse geographic landscape and emerging cluster of photonics companies make it an ideal location for developing and deploying smart sensing systems that have many applications in defense, resource management, and disaster response. Greater Akron, Ohio, nicknamed the Rubber Capital of the World, received an Implementation grant to develop and manufacture more sustainable polymers — a breakthrough needed to meet broader climate goals. As domestic semiconductor manufacturing is a top priority for the Biden-Harris Administration, a coalition in New York received an Implementation grant to support the competitiveness of small and medium-sized semiconductor manufacturing suppliers.
The Tech Hub Awards are a reminder of the diversity of institutions needed to enact inclusive economic development. Lead institutions in the 12 winning consortia include research universities, innovation and cluster intermediaries, state economic agencies, local governments, and regional business organizations. The competition prioritizes equity and inclusion, with 75% of the winning coalitions including labor unions, 25% including Historically Black Colleges and Universities, 25% including Hispanic Serving Institutions, and 25% partnering with tribal governments.
Nearly all tech hubs have received support from governance projects to improve consortium coordination
Recognizing how important it is for hubs to have the resources they need to coordinate activities, strategy, investments and progress, EDA assessed each region’s “Governance, Leadership and Evaluation” approach and funded specific projects focused on managing, operating and coordinating the hubs.
Building on our initial assessment of BBBRC implementation, we developed the “POWER” framework to help regional leaders organize and govern these complex place-based economy strategies and coalitions. Regions have taken this to heart, articulating hub models that emphasize partnerships, oversight, workflow management, evaluation, and resource strategies that match their unique geographies and consortium dynamics. Of the 52 funded projects from the 12 Tech Hub awardees, 10 are focused on strengthening consortium coordination.
For example, Tulsa’s Hub for Equitable and Trusted Autonomy (THETA) designed leadership and advisory structures to facilitate stakeholder alignment and leverage local expertise. These structures include a Steering Committee that oversees THETA’s vision and alignment of activities, Project Working Groups that drive the implementation of each Hub project, and a Technical Advisory Board that advises the consortium on future innovations.
South Florida’s ClimateReady Tech Hub prioritizes equity and inclusion in consortium representation, community engagement, and impact measurement. To address the disproportionate impacts of climate change on disadvantaged communities, the Hub has developed an Equity Action Plan that actively engages disadvantaged communities to inform strategic priorities, resource allocation, policy, and performance management, and ensures that the majority (56%) of members and Hub partners are leaders of color.
In sparsely populated areas like Montana and Nevada, where lead applicants had to establish and maintain partnerships over long distances, awardees placed a premium on consistent and intentional communications strategies.
With implementation funding just around the corner, these tech hubs need to execute their plans, bringing together consortia and community members, codifying governance structures, and adjusting their initial strategies to fit available funding. The strength of each tech hub lies in their diverse coalitions that share big bets. Now they need to move from transformative potential to realization through thoughtful implementation.
Secondly, strong measures need to be taken to maximise the impact of the hub.
Looking at the bigger picture for the next few years, the way forward will require strengthening the implementation and impact of new grants.
First, it is crucial that the program be strengthened in the coming years, because the current Tech Hub Initiative, while approved as a $10 billion program in the 2023 budget, is significantly smaller than originally envisioned as a program aimed at completely transforming local economies. It is therefore good to see that President Biden has included $4 billion for the program in his current budget request. It is also essential that the U.S. Congress use all its tools in the coming years to fully fund the Tech Hub Initiative at the approved level.
But the program should not be expanded simply to reach an arbitrary scale. Rather, it must be leveraged and strengthened to provide a powerful demonstration of joint federal-local efforts to expand critical technology delivery while accelerating inclusive regional economic growth. In this way, the Tech Hubs program is an opportunity to embark on additional initiatives to build partnerships across and beyond government and realize the additional benefits of hub designation for these communities. These supports, along with brokering hubs’ ongoing relationships with policymakers, industry players, and additional capital, will help greatly increase the hubs’ impact.
All of these future adjustments are incredibly important. Strong implementation of this ‘whole of government’ approach to transforming our economy and our region will ensure that the Hub initiative will also be transformative for Federal government administration and the country’s broader economic development for years to come. That, after all, is the true importance of this week’s Tech Hub announcement.
