WASHINGTON — The bipartisan industrial policy legislation that President Biden signed into law this summer called for a $10 billion effort to revive economically booming regions across the country: a series of “innovation hubs” in 20 zones. metropolitan.
Supporters of targeted federal efforts to revitalize troubled areas are eagerly waiting for the Commerce Department to begin choosing sites for these centers. Researchers from a Washington think tank, the Economic Innovation Group, are set to release a comprehensive report on Monday that draws on a wide range of economic data to calculate where hubs could best achieve their dual goals. These include helping regions in need of an economic jolt and accelerating technological advancements that are boosting the US economy as it competes on the global stage, and the list of potential sites is heavy. for cities in Mountain West, the Carolinas and Ohio.
“The stakes here are really high,” said Kenan Fikri, director of research at the Economic Innovation Group. “They are high in the competition between the United States and China, and they are high for the future of territorial policies.”
But before the Commerce Department can begin the process of deciding where to place the hubs, Congress must actually fund their creation. The need for Congress to give the green light to real money extends to many key provisions of the new law, the CHIPS and Science Act, which authorized lawmakers to fund a variety of new programs without actually shelling out the money. money for them.
As Mr. Biden prepares to fly to Arizona on Tuesday to celebrate investments in semiconductor manufacturing catalyzed by the CHIPS Act, the immediate fate of innovation hubs is in flux. Lawmakers are wondering if they’ll be able to pass a full spending bill before the end of the year, or just a stopgap, which would be less likely to include money for hubs.
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Failure to get the money before the end of the year would slow down the site selection process and potentially threaten the hubs entirely, even if they had bipartisan support when the law was passed. It’s because Republicans are set to take control of the House in January, and they’ve signaled their desire to cut federal spending and fight to roll back some of the economic legislation that Mr. Biden has helped to push through a Democratic-controlled Congress over the past two years. years.
A bipartisan group of CHIPS supporters, led by Senator Maria Cantwell, a Democrat from Washington and chair of the Senate Commerce Committee, urged congressional officials in a letter last month to fully fund more than $5 billion in programs CHIPS in a year-end spending bill. . This includes the first batch of money for innovation hubs, as well as funds for manufacturing worker training and increased innovation efforts through the National Science Foundation.
“During a period of heightened global competition, including with technologically capable nations like China and Russia, the United States must increase its investment in the science and technology innovation that has long underpinned our economic and security leadership.” , wrote the senators.
The legislation Mr. Biden signed this summer covers $52 billion in subsidies for semiconductor manufacturing in the United States. It has already spurred a wave of new private investment in chip factories across the country, something Mr. Biden eagerly touted. He traveled to Syracuse, NY, in October to welcome a $100 billion investment from chip giant Micron in downtown New York. On Tuesday, he will fly to Phoenix to visit chipmaker TSMC
The act goes beyond semiconductors and also attempts to sow research, development and job growth in several emerging advanced manufacturing industries. Many of them, like electric cars and advanced batteries, are linked to the fight against climate change. Mr. Biden is trying to position the United States as the production and employment leader in this global race and wants American factories to dominate the technologies needed to reduce fossil fuel emissions and avoid catastrophic warming.
Hubs are part of this larger program. They are intended to help transform scientific research, from universities and other centers of innovation, into new and marketable industrial applications. And by virtue of where they will be located, they seek to catalyze economic growth in parts of the country that could use a spark.
“We will plant the seeds to develop the tech hubs of tomorrow, in places with great potential but that have been eclipsed by cities like San Francisco or Boston or Austin or New York,” said Senator Chuck Schumer of New York, majority leader. said shortly before the law passed the Senate. “The bill will help transform cities like Buffalo and Indianapolis into new centers of innovation, and the result will be countless new, well-paying jobs and a bright future for these areas for years to come.”
Mr. Schumer lobbied for Albany to have one of the hubs. Other senators are pushing for slots in their own states. The law sets out certain placement criteria — requiring a critical mass of hubs in each of the country’s regions — but leaves much of the discretion to the Commerce Department.
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The report by the Economic Innovation Group is the most detailed effort yet to guide this selection, trying to balance the needs of areas being left behind with their potential for economic revival. It measures this potential using data on the industrial composition and economic complexity of regions, as well as two key human ingredients for innovation: the number of working-age science and technology graduates and the number of patent authors. in a region.
To measure need, the report looks at the proportion of prime-age adults in a region who are not employed or looking for work, two measures of the so-called “brain drain” – the drain college graduates from a region – and distance from a “superstar” city like New York or Chicago.
The top 10 cities on the list are a mix between higher potential (like Phoenix and Salt Lake City) and higher need (like a city pair in Ohio, Toledo and Akron). Many are university towns, Mr. Fikri noted, which are not large enough to have yet supported a thriving industrial sector stemming from scientific research.
Greenville, SC tops the list with a score balanced almost equally between potential and need, followed by Provo, Utah, and Tucson, Arizona.
The report’s researchers say their data suggests that policymakers could — and should — allocate hubs in various fields with different bases of technology expertise and different levels of need, in hopes of maximizing both progress and the regional economic gains they produce.
The hubs should “move towards different kinds of outcomes, whether it’s AI, chip manufacturing or autonomous vehicles or whatever local initiatives are in question,” said John Lettieri, president. and CEO of the Economic Innovation Group. “You want a lot of different bets on a lot of different kinds of places that do a lot of different kinds of things.”
Emily Cochrane contributed report.
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