The US government plans to invest $500 million to transform metropolitan areas in middle America into new centers for tech innovation.
On Friday, the Department of Commerce announced the first notice of funding opportunity (NOFO) for the Regional Technology and Innovation Hub program, also known as Tech Hubs. This initiates the process for eligible groups across the country to apply for Tech Hub designation, which allows them to access the funds to enhance their regions as appealing places for technologists and entrepreneurs to reside and operate.
During a briefing call on Thursday, Commerce Secretary Gina Raimondo acknowledged that although the United States is a leader in technological innovation, the concentration of the country’s tech ecosystem is a cause for concern. She stated that 80% of venture capital investments in the U.S. are concentrated in the San Francisco Bay Area, the Northeast, and Southern California, leaving tremendous potential for tech innovation in other parts of the country. Raimondo added that many of the best research institutions in the world are located in America’s heartland, far from the coasts.
The Regional Technology and Innovation Hub program, or Tech Hubs, has been authorized by Congress to receive $10 billion between fiscal years 2023 and 2027. For this year, $500 million is available for distribution. Eligible groups can apply for Tech Hub designation through the first notice of funding opportunity (NOFO), which offers $15 million in planning grants. Later this year, the Department of Commerce plans to award grants ranging from $50 million to $75 million each to five to 10 designated Tech Hubs to help develop their capacity.
The next year’s budget requested by President Joe Biden includes $4 billion for Tech Hubs. To be eligible for the program, applicants must comprise of at least one entity from each of the following categories: a higher education institution, a subdivision of local or state government, an industry or firm in a relevant tech or manufacturing field, an economic development group, and a labor organization or workforce training group.
Tech Hubs, as mandated by the statute, must prioritize a specific set of key technology areas, including artificial intelligence, robotics, natural disaster prevention, biotechnology, cybersecurity, energy efficiency, and others. The Department is required by law to designate a minimum of 20 Tech Hubs. The goal is to use the investment to assist regions throughout the country in becoming crucial centers of innovation and generating more higher-paying jobs across a broader area of the nation.
Raimondo said that President Biden strongly believes that all Americans should have equal access to economic opportunities regardless of their location. She added that people should not be forced to leave their families, support systems, or networks and move to major tech hubs like New York or San Francisco in order to secure good jobs.
According to Raimondo, the program is also a crucial investment in national security for the United States. She highlighted the Chips and Science Act’s ongoing efforts to invest in domestic semiconductor manufacturing, which became a bipartisan priority during the pandemic due to the fragile nature of the computer chip supply chain. Since most advanced chips are not manufactured domestically, the industry’s reliance on chips produced in Taiwan makes the supply chain vulnerable, especially given current tensions with China.
According to Raimondo, the U.S. has lost its lead in manufacturing and innovation for critical technologies, including semiconductors, and now needs to catch up. She added that the Tech Hubs program aims to prevent a similar situation from happening again by keeping the U.S. ahead of the curve in other crucial technologies such as quantum computing, artificial intelligence, and biotech.
