The Biden administration on Tuesday awarded $504 million to 12 projects across the country in an effort to transform overlooked communities into tech powerhouses.
The grants will fund “tech hubs” aimed at bolstering production of critical technologies in regions such as western Montana, central Indiana, southern Florida and upstate New York. The hubs are intended to accelerate the growth of advanced U.S. industries such as biomanufacturing, clean energy, artificial intelligence and personalized medicine.
The program reflects a federal effort to expand funding for American science and technology beyond Silicon Valley and a few coastal regions, and Biden administration officials say the effort will help revitalize areas that have traditionally seen less government investment. Supporters say the project 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 broad bill lawmakers passed in 2022 to expand domestic manufacturing of semiconductors and increase funding for scientific research. The idea of spreading tech funding outside Silicon Valley helped the bill garner broad support from lawmakers representing parts of the country eager to benefit.
The Commerce Department initially reviewed nearly 400 applications before narrowing it down to 31 projects that were given “technology hub” designation in October. Twelve regions received grants ranging from $19 million to $51 million on Tuesday.
But it's unclear how much additional funding will be provided: When the CHIPS Act was passed, Congress authorized $10 billion for the five-year program, but only about $541 million, or about 5%, has been allocated so far, which some say could hinder the program's success.
John Lettieri, CEO of the Economic Innovation Group, a Washington think tank, said a lack of funding is a major hurdle for the program and he is skeptical that the grants will bring about real change in these regions. He said the Biden administration isn't to blame for the limited funding, but he would like to see officials make “big bets on a few promising emerging technologies and locations” rather than small grants spread across 12 regions.
“This $500 million funding is unlikely to result in any major technological breakthroughs,” Lettieri said, adding that the money will “help incrementally revitalize these regions, but it won't lead to transformative outcomes.”
Mark Muro, a senior fellow at the Brookings Institution, said the funding is an “important down payment,” but that more money is needed to enact more meaningful economic transformation in these regions. Muro said he's “not entirely pessimistic” about the prospects for more funding, given the bipartisan interest in the program. Still, he said it will be difficult 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,” Muro said.
Commerce Department officials said they would be willing to provide additional funding if lawmakers appropriate more money for the program.
“Simply put, with more money, we can do more,” Commerce Secretary Gina Raimondo said in a statement. “More funding means more grants, more technological advancements, more growth in our regions, and more good-paying jobs.”
One beneficiary Tuesday was a project in Tulsa, Oklahoma, that aims to develop drones and other autonomous systems for customers including the U.S. military. Tulsa is home to a drone port with a laboratory that can recreate different weather conditions for testing drones.
Jennifer Hankins, managing director of the Tulsa Innovation Lab, which is leading the $51 million-funded Tulsa project, said the effort will help reduce reliance on foreign production of self-driving technology and its components.
She also said the project will focus on partnering with Native American tribal nations, Black business organizations and others to address issues of cultural bias in AI systems. “Tulsa has been thoughtful about who we partner with to address this challenge,” she said.
The other winning project was from a consortium called Heartland Bioworks in Indiana, which has committed to investing $51 million in biotechnology and biomanufacturing, including human, animal and plant biosciences.
Andrew Kosak, executive vice president of partnerships at the Applied Research Organization, which is leading the Indiana project, said the technology hub would take advantage of local advantages such as the presence of pharmaceutical company Eli Lilly and Co., a network of drug contract manufacturers and other companies focused on plant and animal science.
“The Tech Hub program was designed to leverage biotech clusters like the ones here in Indiana,” he said. The funding puts those clusters in the spotlight for venture capitalists and other funders who might not otherwise invest in “what some might consider a 'jump zone.'”