Federal Tech Hub Program Presents Opportunity

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The concentration of the US innovation sector in a small number of regions—what Brookings called the “entrenched geography of America’s innovation industries”—has been a focus of discussion regarding the nation’s future competitiveness. In addition to creating vulnerabilities for US competitiveness, the accelerated pace of wage and job growth among a few tech-focused regions has deepened the divide between metro and rural communities. To address these challenges, Congress set aside $500 million of CHIPS and Science Act funding to drive the growth of technology and innovation.

Funds will be distributed by the US Economic Development Administration (EDA) as part of the newly established Regional Technology and Innovation Hub (Tech Hubs) program. As the sole federal agency tasked exclusively with economic development, the EDA is responsible for operationalizing the legislation and awarding the appropriated funds via a competitive application process. While the EDA is accustomed to deploying large funding pools, the Tech Hubs program stands to be the largest such initiative with an innovation focus.

One explicit goal of the Tech Hubs program is increasing the geographic and demographic diversity of innovation-driven communities. Considerations outlined in its enabling legislation suggest Congress intended the initiative to identify regions with the potential to leverage research and development assets to spur the growth of high-quality jobs. To be competitive, applicants will need to demonstrate that they are capable of coordinating efforts and resources to achieve significant growth in critical technology sectors. The emphasis on geographic distribution is reflected in the EDA application and awards process which seeks to fund areas outside established tech centers like the Silicon Valley, Austin, or Boston.

According to EDA’s April 2023 fact sheet, the Tech Hub program will proceed in two phases. Phase 1 is the designation period, during which applications for Hub status can be submitted. The Phase 1 application window is scheduled to open in May 2023 and last for two months. To lay the necessary groundwork, prospective applicants can begin by defining their geographies, identifying partners, and developing project ideas. Eligible consortia must include higher education institutions, state or local governments, tech-centric private industry, economic development organizations, and labor or workforce boards or organizations. While regions are self-designated and can include rural and urban areas, proposed Hubs must be anchored by a single metropolitan statistical area (MSA).

The EDA expects to recognize at least 20 regional Hubs and deploy $15 million for strategy development during Phase 1. These hubs will then be invited to apply for Phase 2, which will be the bulk of the $500 million allocated. Phase 2 will open in late summer 2023, after which the EDA will make at least five implementation awards to some of the designated regions.

The EDA fact sheet outlines the program’s purpose, timeline, application requirements, and awards process in greater detail. It also suggests that awards made through the program will not be the conclusion of dedicated funding, but rather the EDA will consider opportunities for “follow-on investments in successful Hubs.” Interested parties can stay up to date on the process by subscribing to EDA updates on the program.

The future growth and sustainability of the US economy will depend on the strength of domestic innovation industries (especially when compared to global competitors like China) and their dependence on increasingly unstable foreign supply chains. The Tech Hubs initiative is an opportunity for communities across the country to contribute to the nation’s economic competitiveness while also spurring local job growth and prosperity.

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