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U.S. Awards $504 Million for ‘Tech Hubs’ in Overlooked Regions

U.S. Awards $504 Million for ‘Tech Hubs’ in Overlooked Regions

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The Biden administration awarded $504 million on Tuesday to a dozen projects across the country in a bid to transform communities that had been overlooked in the past into technological powerhouses.

The grants will fund “tech hubs” that aim to bolster the production of critical technologies in regions including western Montana, central Indiana, South Florida and upstate New York. The hubs are meant 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 America’s science and technology funding beyond Silicon Valley and a few coastal regions, an initiative that Biden administration officials say will help revitalize areas that have traditionally received less government investment. Proponents 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 ramp up the domestic manufacturing of semiconductors 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 that were eager to benefit.

The Commerce Department initially considered nearly 400 applications, narrowing them to a pool of 31 projects that received “tech hub” designations in October. On Tuesday 12 regions won grants that were anywhere from $19 million to $51 million.

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

John Lettieri, the chief executive of the Economic Innovation Group, a think tank in Washington, said that the lack of funding had been a major hurdle for the program and that he was skeptical that the awards would result in substantial transformation in those regions. He said that although the Biden administration was not at fault for the limited funding, he would rather have seen officials make “large bets in a smaller number of promising emerging technologies and places,” instead of smaller grants spread across a dozen regions.

“We’re not likely to get major technological breakthroughs as a result of this half-billion dollars,” Mr. Lettieri said, adding that the funds would “help incrementally boost these regions but not lead to transformational outcomes.”

Mark Muro, a senior fellow at the Brookings Institution, said that the funding was an “important down payment,” but that additional funding was needed to see a 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 there for further investment, but nothing is easy at present,” Mr. Muro said.

Commerce Department officials said they would be eager to offer additional rounds of funding if lawmakers appropriated 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 awards, leading to more tech advancements, more regional growth and many more good-paying jobs.”

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

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

She also said the project would focus on addressing the issue of cultural bias in A.I. systems, by 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,” she said.

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

Andrew Kossack, the executive vice president for partnerships at the Applied Research Institute, which is leading the Indiana project, said the tech hub would draw on local advantages, like the presence of the pharmaceutical company Eli Lilly, a network of drug contract manufacturers and other companies that focus on plant and animal science.

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

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