America

A Push for Tech Hubs in Overlooked Places Picks 31 to Vie for Money

The Biden administration said on Monday that it had chosen 31 regions as potential recipients of federal money that would seek to fund innovation in parts of the country that government investment overlooked in the past.

The announcement was the first phase of a program that aims to establish so-called tech hubs around the country across a variety of cutting-edge industries, like quantum computing, precision medicine and clean energy. In the coming months, the regions will compete for a share of $500 million, with roughly five to 10 of the projects receiving up to about $75 million each, the administration said.

The program will test a central idea of a bipartisan bill that lawmakers passed last year: that science and technology funding should not just be concentrated in Silicon Valley and a few thriving coastal regions but flow to parts of the country that are less populated or have historically received less government funding.

Proponents of the program say these investments can tap into pools of workers and economic resources that are not reaching their full potential, and improve the American economy as well as its technological abilities.

But it remains to be seen if dispatching money to more remote places, which struggle with issues like an outflow of young workers, will ultimately be the most efficient way to use government funding to promote technological gains.

The 31 finalists were chosen from nearly 400 applicants, the Commerce Department said. They include proposals to manufacture semiconductors in New York and Oregon, design autonomous systems for transportation and agriculture in Oklahoma, research biotechnology in Indiana and process critical minerals in Missouri.

In Washington on Monday, President Biden said these tech hubs would bring together private industry, educational institutions, state and local governments, tribes, and organized labor to produce “transformational” research.

“We’re doing this from coast to coast, and in the heartland and red states and blue states, small towns, cities of all sizes,” Mr. Biden added. “All this is part of my strategy to invest in America and invest in Americans.”

Senator Chuck Schumer of New York, the majority leader, said in an interview on Monday that the tech hub program, which he had devised with Senator Todd Young, an Indiana Republican, had helped to secure bipartisan support for the CHIPS and Science Act last year.

The legislation included $200 billion for basic scientific research, and more than $75 billion in grants and tax credits for semiconductor companies. It aimed to lower the country’s dependence on foreign manufacturers of computer chips and other critical technology.

Mr. Schumer said “it was a very big selling point” for the overall bill that the funding was not just going to “three or four cities in blue states.”

“There was such divisiveness in the country, the coasts and non-coasts, and a lot of it was because all these new tech and high-end industries were locating on the coasts,” he said. “And so we crafted the tech hub program to be spread throughout the middle of America.”

Mr. Schumer was touring Buffalo, Rochester and Syracuse on Monday to celebrate the inclusion of two New York proposals, one focused on semiconductor manufacturing and the other on battery technology.

“There’s a lot of talent here that’s not used,” he added.

Mark Muro, a senior fellow at the Brookings Institution’s Metropolitan Policy Program, described the tech hub program as “a grand experiment” in industrial policy.

Mr. Muro said the United States had seen the incredible strength of concentrating technology investments in a few key places like Silicon Valley, where companies in related businesses can benefit by clustering together. But those investment patterns have also resulted in tremendous imbalances in the country’s economy, where “only a few places are truly prospering and much talent and much innovation is left on the table,” he said.

“This is a whole different map,” Mr. Muro said, adding, “I think we need to make some experiments and some of them will probably be great investments.”

The announcements tried to balance several competing goals of the tech hubs, including whether to invest in as many regions as possible — or whether to concentrate spending in a few areas in hopes of engineering radical economic improvement in those areas. They also reflected the high interest in the program from regional officials and their representatives in Congress.

The administration is also trying to do as much as possible with initial funding for the program that remains well below the maximum levels lawmakers set in the CHIPS bill. While that bill authorized Congress to fund a variety of programs, lawmakers still need to greenlight actual money for many of the tech hub investments, as well as other programs.

Given those financial constraints, some supporters of the program said on Monday that they hoped administration officials would ultimately focus most of the money on a small set of the announced hubs. Ideally, “you’d be extremely narrow about who gets funding,” said John Lettieri, president and chief executive of the Economic Innovation Group, a Washington think tank. “The more narrow the better.”

The later round of funding announcements, he added, “is where we have to be pretty ruthless about shielding the process from politics as much as possible.”

Madeleine Ngo contributed reporting.

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