U.S. Allocates $504 Million to Create ‘Tech Hubs’ in Underserved Areas

The Biden administration has allocated $504 million to twelve projects nationwide, aiming to turn historically overlooked areas into technological hubs. These “tech hubs” will focus on critical technology sectors such as biomanufacturing, clean energy, artificial intelligence, and personalized medicine, benefiting regions like western Montana, central Indiana, South Florida, and upstate New York.

This initiative is part of a broader federal effort to distribute science and technology funding beyond Silicon Valley and coastal regions. Biden administration officials believe this will revitalize areas that have traditionally received less government investment, creating well-paying jobs and utilizing underrepresented pools of workers and resources.

The funding is part of a $10 billion program authorized by the CHIPS and Science Act, passed by Congress in 2022. This legislation aims to boost domestic semiconductor manufacturing and increase scientific research funding. The idea of spreading technology funding nationwide helped garner support from lawmakers representing regions eager for such investments.

The Commerce Department evaluated nearly 400 applications, ultimately designating 31 projects as “tech hubs” in October. On Tuesday, twelve of these regions received grants ranging from $19 million to $51 million. However, future funding remains uncertain. Although the CHIPS Act authorized $10 billion over five years, only $541 million, or about 5%, has been appropriated so far. This limited funding could hinder the program’s success.

John Lettieri, CEO of the Economic Innovation Group, expressed skepticism about the program’s impact, noting that the limited funding might not lead to significant technological breakthroughs. He suggested that focusing on fewer, larger grants in promising areas might have been more effective.

Mark Muro, a senior fellow at the Brookings Institution, described the funding as an “important down payment” but emphasized the need for additional investment to achieve significant economic transformation. He noted bipartisan interest in the program but acknowledged the challenges posed by political tensions over government spending.

Commerce Department officials expressed a desire for more funding to expand the program. Commerce Secretary Gina M. Raimondo stated that additional funds would lead to more technological advancements, regional growth, and well-paying jobs.

One beneficiary is a Tulsa, Oklahoma project focused on developing drones and autonomous systems for the U.S. military. The initiative, led by Tulsa Innovation Labs, received $51 million and aims to reduce dependence on foreign production for these technologies. It will also address cultural bias in AI systems by collaborating with Native American tribal nations and Black business organizations.

Another recipient, Heartland BioWorks in Indiana, received $51 million to invest in biotechnology and biomanufacturing, leveraging local resources such as pharmaceutical company Eli Lilly and a network of drug contract manufacturers. Andrew Kossack, executive vice president for partnerships at the Applied Research Institute, noted that the funding would attract venture capital and other investments to the region, often overlooked as “flyover country.”